CNBC: Türkiye’s rapidly-growing defence industry is boosting its global clout

REGION  28 March 2023 - 14:44

CNBC has published an article about the powerful Turkish-made Bayraktar TB-2 drone which has won fame for its role in helping Ukrainian forces devastate Russia’s initial offensive. Caliber.Az reprints the article.

In the early weeks of Russia’s invasion of Ukraine, a music video surfaced online. 

It featured clips of missile launchers and Russian tanks in a drone’s crosshairs, as deep-voiced men sang the words in Ukrainian: “The occupiers came to us in Ukraine, with brand new uniforms and military vehicles, but their inventory melted into steel … Bayraktar!”

The last word drops as an explosion is seen obliterating a Russian target. 

The video quickly went viral, the song written as an homage to the powerful Turkish-made Bayraktar TB-2 drone that helped Ukrainian forces devastate Russia’s initial offensive. The now-famous drone is produced by Istanbul-headquartered defense company Baykar Makina – whose chief technology officer happens to be Turkish President Recep Tayyip Erdogan’s son-in-law.

Drones aren’t the only thing elevating Türkiye’s status as a growing player in the global defense industry. The sheer number of international deals the country’s defense firms have made in the last few years reveals rapidly rising demand, major R&D investment and a growing source of leverage for Türkiye’s foreign relations. 

Record defense exports

In 2022, Türkiye hit a record $4.4 billion in arms exports – a figure larger than some European countries’ annual defense budgets. After exceeding its export target for the year, Türkiye’s government aims to bring that figure to $6 billion in 2023. Turnover for the country’s defense industry as a whole last year was $10 billion, according to Türkiye’s Presidency of Defense Industries. 

Revenue from overseas defense exports rose by 42% between 2020 and 2021, with foreign contracts making up as much as 90% of revenue for some Turkish companies — like Baykar, the Atlantic Council reported in December. Türkiye is home to some 2,000 companies in the sector.

The transformation has its roots in the early 2000s, when Ankara outlined a strategy to build a modern and self-sustained defense sector and encourage domestic investment. Erdogan’s two-decade long project, which continues to see strong state investment in local firms, is paying off as arms sales bolster Turkish influence abroad.

And while Türkiye’s military manufacturing footprint is still small compared to major players like the U.S., Russia, and China, it’s won outsized attention for the performance of its weapons like the Bayraktar drone, which has been used in Libya, Syria, and the Azerbaijan-Armenia conflict in addition to Ukraine.

Keeping up foreign relations

Sales of weapons and technologies, especially drones, “have helped [Türkiye] improve ties” internationally, the Atlantic Council wrote, in particular with “states such as Kazakhstan, Kyrgyzstan, Turkmenistan, and Azerbaijan, and even establish new ties with various other countries such as Poland, Saudi Arabia, and Tunisia.” 

The sales bolster Türkiye’s clout in the Gulf states and Europe, too. At IDEX, the Middle East’s largest arms fair held in February in Abu Dhabi, Türkiye’s presence was impossible to miss. Enormous Turkish-branded pavilions showcased everything from armored trucks and drones to assault rifles, tactical gear and laser-guided missiles.  

“There is significant international demand from the Middle East, from Asia, from Europe. Also with the war in Ukraine, Turkiye is trying to do our best in supporting with equipment, including with UAVs and land platforms,” Alper Öziblen, chairman of Turkish defense company Pavo Group, told CNBC at IDEX. 

“This shows us that Turkish products have been mature enough to use in the battlefields,” he said. “Our clients, our partners are very happy.”

Öziblen and other Turkish executives CNBC spoke to all confirmed they had ongoing or planned partnerships and deals with the United Arab Emirates, Qatar and other oil-rich Gulf states. Many of those countries are investing heavily in growing their own defense sectors — and some, like the UAE, Saudi Arabia and Qatar, have provided substantial financial support to Türkiye or pledged billions of dollars in trade and investment. 

Öziblen highlighted the expertise of his and other Turkish companies in areas like cryptography, essential for secure communications on the battlefield, as well as electronic subsystems for drones and land platforms.

“Information technology is a major part of the defense domain, and we are positioning ourselves in that domain,” he said. And the investment shows in the numbers: research and development in Türkiye’s defense sector “recently increased by 30 percent,” the Atlantic Council’s report wrote.

Supplying NATO, Ukraine and beyond

As NATO allies race to supply Ukraine with arms to combat Russia, many of those allies – particularly in Europe – are running severely low on their own weapons stocks. Turkish defense manufacturers say they are booked for the next several years with orders to help replenish NATO stockpiles. 

Those firms also have high demand from Türkiye’s military alone — it is, after all, the second-largest military in NATO after the United States.

“The Ukraine-Russian war has created a huge demand, even the countries that are not participating in the war are stockpiling. We are already doubling our manufacturing capacity just to meet demand [from NATO countries],” Emin Öner, chairman of the board of Turkish defense firm Assan Group, told CNBC. 

“All the manufacturers are booked for at least five more years,” Öner said. He said that his company was fully booked with orders for the next few years, with shifts running round the clock — despite that fact that Assan does not currently make products for Ukraine. It would do so if the Turkish government requested it, he said.

Not all of Türkiye’s defense firms supply arms to Ukraine. Among those that do, some, like Baykar, do not comment publicly about it. Türkiye’s government is playing a careful balancing act between Ukraine and Russia to act as a mediator between the two, and has maintained relations with Moscow, offering a new home for many Russians fleeing sanctions. 

For Pavo Group’s Öziblen, however, his company’s provision of defense equipment to Ukraine is a point of pride.

“If [Ukraine] needs some know-how, knowledge, for specific systems, we are transferring it to them free of charge,” he said.  

“It’s a kind of responsibility,” Öziblen added. “It’s more than business for us, actually. Ukraine matters more than business.”

Caliber.Az