I wonder why we have so large trade deficit.
Any industrialized developing countries such as tayland or Vietnam or Malaysia didnt had trade deficit like it.
There are several reasons for that:
The first reason is all of those countries have oil and gas reserves Thailand produced 11.6 million metric tons of oil in 2022, Vietnam produced 10.84 million tonnes in 2022, and finally Malaysia produced two million tons of oil. Turkey only produced 3 million tons of oil and used 30 million tons last year, this means that Turkey going to continue to suffer from a trade deficit unless it changes its energy strategy.
Turkey needs to follow the example of states like France, South Korea, and Japan and start to invest heavily in nuclear power. The three countries mentioned do not have any oil reverse of their own but have been able to overcome that disadvantage by investing in nuclear power in order to keep money in the country. Turkey has not only failed to build its nuclear power plant, which was something that Turkey should have done back in the 1980s, but Turkey has screwed up its current nuclear program.
The objective of Nuclear power plants is to achieve energy independence, but Turkey has stupidly set up its nuclear power plant program in a manner that makes it trapped in a system that requires it to keep paying money to a foreign company.
Turkey's decision to be the only country in the world that uses the build–own–operate nuclear power plant model means that the nuclear power plant is owned by a Rosatom subsidiary. the fact that the plant is owned by a subsidiary of a Russian company means that money is transferred outside of Turkey back to Russia; thus continuing the trade deficit for many years to come.
The second reason behind the trade deficit is the Turkish people's habit of seeing gold as an investment winning out over better investment choices that would actually help the economy by putting worth into it.
The preference of Turks to invest in gold creates an environment that increases the trade deficit without adding any value to the Turkish economy. Gold is only valuable because people put a value on it without that sense of value you quickly realize it is a useless metal. Gold doesn't generate any worth to the economy unless you do it, yet many Turks prefer investing in gold over stocks of companies that generate profit and add value.
the Third reason is that Turkish companies proffer to be part of a supply chain for bigger brands rather than rock the boat by making their own brand. The problem with this system is that it creates two big problems the first is that the foreign brands will get most of the profit while the Turkish companies will get the scraps. The second problem is that as soon as wages go up or a new cheaper labour force opens up those brands will which their supply chains to those newer, cheaper labour markets. This happened to Turkey in the mid to late 90s with China slowly eating away at Turkey's share of the low-mid technology market.
The refusal of Turkish companies to establish brands and risk-averse behaviour in entering the high-tech market has led the government to keep adopting policies that favour these cheap labour low to mid-tech companies at the expense of everyone else that lives in Turkey.
www.ft.com
www.reuters.com
