2012-12-31

Seeking to diversify, Turkey expands visa-free regimes

In an effort to increase and diversify business ties, Turkey has signed more than 70 visa free regimes with other countries.

By Enis Senerdem for SES Türkiye in Istanbul -- 31/12/12

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As Turkey looks to diversify export markets due to falling demand from the crisis stricken EU, bilateral visa-free regimes with numerous countries have been one way to achieve this goal for Ankara.

  • Workers in Istanbul's Laleli district, a centre of the suitcase trade, lift bags of cloth to ship to Russia. [AFP]

    Workers in Istanbul's Laleli district, a centre of the suitcase trade, lift bags of cloth to ship to Russia. [AFP]

Over the past couple of years, the Turkish government has signed bilateral agreements to mutually lift visa regimes, with the number now standing at over 70 countries -- including Russia, Serbia, Jordan and Libya -- while several new visa agreements are being negotiated.

Meanwhile, Turkey has managed to compensate for falling export demand from Europe by diversifying its export markets. Last year from January-October, EU member states bought almost 50 percent of total exports from Turkey. However this year, the figure slumped to 32.7 percent, while the share of the Middle East in total exports jumped from 20.4 percent to 28.5 percent in January-October period, according Turkstat data.

Lifting visa requirements can be a boon for Turkish and foreign businesses by lowering bureaucracy and transaction costs, and facilitating economic co-operation between countries.

"It facilitates the market penetration for Turkish businessmen ... It also has psychological effects. Managing the operations abroad is easier without the visa requirement," Mustafa Mente, former deputy chairman of Turkish Exporters Assembly, told SES Türkiye.

"When the visa regime is lifted, trade volume with that country increases both ways. Turkey's exports increase but at the same time imports from that country also rise," Mente said.

However, some believe lifting visas may not have an immediate direct impact on bilateral trade. "We do not see a meaningful increase in trade after the visa elimination. Those businessmen who want to trade do it even though there is a visa regime. We see the real impact on suitcase trading and these kinds of commercial operations do not reflect on official trade figures," Tugrul Erkin, president of the Turkish-Eurasia Business Council at Foreign Economic Relations Board, told SES Türkiye.

Still, Erkin said eliminating visas plays a key role in developing stronger commercial ties between both businesses and countries.

"When there is no visa regulation, foreign businessmen can easily come to Turkey and conduct market research. They can determine the type of investment in a more sound way," he said.

Istanbul's Laleli district is the heartland of suitcase trading and according to Ayhan Karahan, former president of Laleli Industrialists and Businessmen's Association, lifting visas with numerous countries helped to foster the shuttle trade.

"Visa free entry to Turkey helps lots of people to cut their costs. They also started to visit Turkey more frequently. It helped a lot of small businesses in Laleli. They are doing much better now," Karahan told SES Türkiye.

The Turkish government has long pushed for visa free access to the EU. In November, Turkey and the EU agreed to rejuvenate visa free travel talks and Ankara is expecting a road map that includes a "to do list" for Turkey from the European Commission.

But business leaders are mixed over the impact visa free travel to the EU could have on trade relations with Europe.

"Eliminating visas for Schengen countries may not have a meaningful impact on exports. European Union is a well-established market for Turkish exporters. Businessmen who are exporting to the EU will go to their destinations with or without a visa regime," Mente said.

But Mehmet Gerz, the chief investment officer of Ata Yatirim, an Istanbul-based investment firm, claimed that Schengen is a "nightmare" for Turkish businessmen. He explained obtaining even a short-term visa for the EU is frustrating, expensive and time consuming.

"I decided not to go continental Europe unless it’s really necessary," he said, adding that he doesn't expect the EU to move to lift visa restrictions anytime soon.

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