Apr 01, 2014 - 0 Comments - Data -

Exports and Imports

By studying the key foreign trade lines of a country, we are able to see how that economy is articulated with and dependent on the global economy. Given that no individual country can produce all the commodities that it needs, different national economies are inevitably connected with and dependent on each other. This connection is forged through foreign trade.

For instance, petroleum, an important source of energy and a raw material used in industrial production, is not found everywhere. For this reason, those countries with oil fields export this commodity to oil-consuming countries who do not have access to oil fields within their national borders. Similarly, geographical conditions makes it impossible for certain countries to produce certain products, such as wine. Therefore, countries import the products they need (but can’t produce) from those countries that can produce it.  

Table 1

In 2013, the most important line of foreign trade for Turkey is processed materials incidental to industry (Table 1). According to foreign trade data, “Processed materials incidental to industry is the largest line item with 49.8 billion dollars of exports and 85.8 million dollars of imports. In Table 2, the “Intermediate Goods”, which encompasses processed materials along with other commodities, constitute 73% of Turkey’s imports.

Table 2

This shows us how dependent Turkey’s industrial production is to imported raw materials and intermediate products. Given the technologies that it uses and the areas of its concentration, unless it goes through a major structural transformation, Turkey will continue to have substantial trade deficit in the coming years. This is precisely why whenever Turkey increases the volume of its exports, it ends up also importing more processed materials incidental to industrial production.

In Table 3, the exports of intermediate goods constitutes 49% of overall exports. Following close behind is consumption goods with 40% of overall exports. All these information indicates that Turkey needs to import processed raw material and intermediate goods in order to produce both for domestic as well as foreign markets.

If imports grow whenever exports grow, the revenues generated from exports do not remain within the country and instead used for the import of raw materials used in the production of exports. This phenomena, since it is one of the most important factors determining the persistent current account deficit of Turkey, is an important shortcoming of the manner in which Turkey’s economy has been articulated with the global economy.

Table 3

Sources:

Exports and Imports dataset is downloaded from Turkish Statistical Institute, “Foreign Trade Statistics” link.

Statistical Table: “Exports by Classification of Broad Economic Categories (BEC)” and “Imports by Classification of Broad Economic Categories (BEC)”

Image: Nalan Yırtmaç

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