Small Firms Can Battle Turkey's 'Vicious' Deficit

A prominent Turkish investment body has called for improving small and medium size enterprises to battle against the "vicious circle" of Turkey's long-standing current account deficit.



A new report from the Independent Industrialists and Businessmen Association, MUSIAD, released in Istanbul on Wednesday said small and medium enterprises' export amounts meet 90% of their imports and such firms should be promoted more than large-scale companies.



Turkey's current account deficit is a persistent problem for the country's economy, although a decline was seen in the first period of the year. The deficit decreased by almost 40 percent in May and stood at US$52 billion annually.



MUSIAD chief, Nail Olpak said the current account deficit was not simply a product of the widely held view of Turkey's energy dependence.



"Holding energy imports, which make up 22% of the whole, as the sole reason distracts from the rest 78% of the imported goods," said Olpak, describing the energy item in Turkish imports as a "scapegoat".



Energy imports cost US$56 billion dollars last year in its US$251 billion 2013 total imports.



The MUSIAD chairman also pointed to financing problems as the biggest issue for small-scale enterprises, which creates three-fourths Turkish employment and more than 60 percent of the total sales in the country.



"Removing the disadvantages that SMEs face is crucial for the recovering from the vicious circle of current account deficit," said Olpak, saying large-scale companies export 40 percent less than SMEs and 50 percent more in imports.



www.aa.com.tr/en - İstanbul