LALE – Lira’s sharp decline in value and ambitious military programs

Lira’s sharp decline in value and ambitious military programsA dramatic loss of around 45 percent in the value of the Turkish lira against the US dollar over the past two years has continued to affect Turkeyand#39s economy aersely.Yet Turkey accelerated its purchase of arms in both 2014 and in the first quarter of this year, despite the fact that it ends up paying 45 percent more in dollar terms for the arms it acquires.

Two separate reports released recently on international arms transfers have ranked Turkey among the top 10 countries in the world making the highest amount of arms imports. UK-based IHS Inc.

released its annual andldquolobal Defence Trade Reportandrdquo on March 6, ranking Turkey the ninth-highest importer of arms in 2014.According to the report, the value of Turkish imports rose considerably from $921 million in 2013 to $1.

541 billion in 2014, earning Turkey a place in the top 10 list of global importers. This difference between 2013 and 2014 can be attributed to numerous programs starting or escalating deliveries in 2014, some of which had seen delays in the past.

The report added that it saw potential in the Turkish market, with various programs developing in the short-to-medium term and some fairly big-ticket import items waiting in line, such as the Turkish purchase of the US-led F-35 fighter program, which includes some Turkish-produced parts. The cost of this project for Turkey is around $15 billion involving the purchase of 100 F-35s that will replace F-16 fighters in the 2030s.

The Stockholm International Peace Research Institute (SIPRI), which published its report regarding international trends in arms transfers on March 16, meanwhile, ranked Turkey the worldand#39s seventh biggest arms importer between 2010 and 2014.In a press release on March 16, Pieter Wezeman, senior researcher with the SIPRI Arms and Military Expenditure Programme, said, andldquoThe Gulf Cooperation Council states, along with Egypt, Iraq, Israel and Turkey in the wider Middle East, are scheduled to receive further large orders of major arms in the coming years.

andrdquoAccording to both IHS Inc. and SIPRI reports, not only will Middle Eastern countries continue to lead the worldand#39s arms import market in the future, but so will the Asian states.

NATO-member Turkey, which borders Middle Eastern countries to its east and southeast, has always used ongoing conflicts in this region as an excuse for its arms purchases, while neglecting to build up its own defense infrastructure and produce critical military technologies at home.Speaking at the opening ceremony of a local ASELSAN radar and electronic warfare center in Ankara on March 16, 2004, President Recep Tayyip ErdoIan stated that Turkeyand#39s reliance on foreign military technology exceeded 80 percent.

In an attempt to reverse this trend, Turkey has since taken steps to boost its local defense infrastructure, resulting in a reduction of reliance on foreign military technologies to about 50 percent. Still, the Turkish defense industry has clearly not yet reached the capacity necessary to produce critical military technologies.

Turkish efforts to boost its long-neglected defense infrastructure have, however, been highly problematic. Being 100 percent reliant on nationally made military technologies poses a danger in a world where such nationalistic approaches are not cost effective, among other things.

In this sense, ErdoIanand#39s remarks on March 16 that Turkey should be able to produce the entirety of its arms are alarming. Turkish defense industry policy is also paradoxical in the sense that it has, on the one hand, been displaying a nationalistic approach of self-reliant arms production while, on the other hand, it continues to buy arms from abroad.

For instance, on March 13 Turkeyand#39s Undersecretariat for the Defense Industry (SSM) issued a request for information in order to formally begin preliminary design work on its ambitious Turkish Fighter Aircraft (TF-X) program, to be completed by 2023. This is the year when Turkey will celebrate the 100th year of the establishment of the Turkish Republic.

The project, strongly backed by President ErdoIan, has, therefore, turned into a andldquoprestige project,andrdquo rather than being economically viable or business-oriented.However, Turkey recently ordered five more US Boeing-made CH-47F Chinook heavy lift helicopters in addition to the six it ordered for the Special Forces Command under a US Foreign Military Sales project.

In addition, it signed an agreement last year with US manufacturer Sikorsky for the procurement of 300 multi-purpose helicopters worth around $3.5 billion and a smaller version of an aircraft carrier Turkeyand#39s $4 billion T-Loramids surface-to-air missile (SAM) program is also included in its long shopping list.

The Turkish trend of continuously buying arms also runs contrary to the obvious highly negative impact on the economy of the ongoing dramatic decline in the value of the Turkish lira against the US dollarThe main reason, however, behind Turkeyand#39s continuous arms purchases, regardless of whether they are necessary and regardless of whether the liraand#39s value has been seeing a sharp decline, is the absence of an oversight mechanism on the military expenditures — offering free rein for arms purchases.

SOURCE: Today’s Zaman