Life is tough for Turkish businesses

KALE GROUP, an aerospace and construction conglomerate, had been making and assembling engine parts for America’s F-35 stealth fighter jet since 2005. But when Turkey’s president, Recep Tayyip Erdogan, purchased a missile-defence system from Russia last year, the American government booted its NATO ally from the F-35 programme. Turkey’s air force has ordered 100 of the planes but has taken delivery of none. Turkish firms lost contracts worth an estimated $9bn. Kale was among those most affected. And then came covid-19.

Doing business in Turkey takes guts. In the past five years, the country has endured several episodes that have dented business confidence: dozens of big terror attacks, a violent coup attempt followed by a crackdown against dissidents, a currency crisis, diplomatic rows with Europe and America, and seven tense, divisive elections. But nothing has blindsided companies as badly as the pandemic.

A serious recession is under way. Exports have plummeted despite a weakening lira and unemployment is poised to reach record highs. A tourism industry that brings in $35bn is bracing for its worst year in decades. Kale has stayed the course, completing existing work on the F-35, supplying Turkey’s budding defence sector and producing components for civilian planes, but continues to face turbulence.


via Business Feeds

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