Companies that built highways and big construction projects in the Özal period today have become giants which seek business opportunities on the global scale.

Recently a friend of mine working as a vice president at the World Bank (WB) told me, "The successes of Turkish construction firms are astonishing." Seeing no spark in my eyes, he added, "Turkish firms are number one in WB tenders." I have been hearing this constantly for some time. A couple of days later, he sent me a large computer file about the WB tenders. The figures were really impressive. Between 2003 and 2011, almost all construction tenders opened by the WB were won by Turkish companies. Almost all tenders in various parts of the world from Venezuela to Tobago, Afghanistan and Ethiopia were won by Turkish companies. The latest data available were for July 7, 2011. I have been talking about how Turkey was excluded from global value chains. I have been stressing that it will be difficult to achieve the US$ 500 billion export target without becoming a part of these chains. But it appears that Turkish construction sector has established a huge value chain on its own already. It would be useful to take a closer look at this picture in order to identify the lessons that can be learned. Let us do it now.

Turkish construction companies rank second after their Chinese counterparts in the world ranking. According to Engineering News Record magazine, among the top 225 construction companies of the world in 2010, were 50 Chinese, 33 Turkish and 22 Italian companies. In 2008, Turkey ranked third after China and the US. In 2009 and 2010 Turkey earned the second position in the ranking while the world construction market contracted due to the global crisis. Recently in Arbil, indicating the buildings around, they said, "Turkish construction companies built these." I thought that this was a natural outcome stemming from geographical proximity. But it appears I was wrong. This was not a separate example, but a whole trend. Turkish construction companies are doing a huge amount of business on the global scale. Then, how must we read this? Let me derive some conclusions.

First, Turkey started to open up to the world with the reforms in the 1980s. However, this process was strongly Turkey-oriented. I think I heard this first from a British diplomat in Cairo. It implied that the purpose of Turkey's opening up in the 1980s was to meet the foreign exchange (FX) requirements. There was a huge current account deficit and the country was not enjoying any FX inflows. Thank God today we are not at that point yet. Back then, Turkey was "in need of even 70 cents" as a statesman once commented. Instead of making efforts to reduce the current account deficit, we initiated FX-generating activities in the Özal period. The motto was "export your product, earn the FX, bring it to the country." Unfortunately, Turkey continues with this motto in foreign economic relations. This is what I meant by saying that the policy was focused solely on Turkey. It did involve a global perspective of doing business. This, however, is starting to change with the guidance of the construction sector.

Second, companies which built highways and big construction projects in the Özal period today have become giants that seek business opportunities on the global scale and have started to win all of the WB and NATO tenders. They have started to establish huge machinery parks abroad. They have settled abroad and changed their operation modes. So, the question to ask is: how did they achieve these things? The weight of Turkish firms in WB tenders started to increase after 2003. One might think that there was a mechanism which, due to the lack of domestic opportunities, pushed Turkish firms to seek opportunities abroad. However, the Mass Housing Authority (TOKI) projects gained pace also in that period. So there should be something else. Seeing the figures, I could not stop thinking, ""Why don't the Turkish construction giants that built the world do business with TOKI?" Turkish companies that undertook major projects that contributed considerably to the development of the Turkish economy starting with the 1970s and which now have attained prominent positions in the world market do not participate in TOKI tenders. What is this being an outcast in the homeland about? There must be a reason. I will take a look at it sometime soon. Maybe the tender amounts are not satisfactory. Or maybe it has to do with what recent arguments that imply, "Public auctions and competition are among the chapters that can be opened next in the EU accession negotiations. But Turkey will sure not be happy with this."

This commentary was published in Radikal daily on 15.07.2011