Is Turkey going to stop its investments in Serbia?

Associated Press (AP) writes about the latest tribulations in Turkey, and wonders whether Turkey will reduce its investments in the Balkan region due to the problems it is experiencing.

The agency mentions a Turkish car parts company that “has opened a factory in South Serbia and has been hailed as a saviour: its new plant created hundreds of jobs and breathed new life into a region that has long been underdeveloped and was devastated in the 1990s’ wars. But with the dramatic plunge in the value of the Turkish currency this year as a result of investor concerns and a diplomatic dispute with the U.S., there are worries in Serbia and the rest of the Western Balkans that such investments from Turkey may dry up.”

“We are worried, the crisis in Turkey cannot be without repercussions for us,” Serbian Trade Minister Rasim Ljajic said recently as the Turkish lira fell.

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While some analysts say the financial turmoil in Turkey could slow the country’s future investments in Serbia, Bosnia and Herzegovina, Macedonia, Albania and Kosovo, others say that the official Ankara will try to keep existing investments and trade exchange, as the Western Balkans is geopolitically significant for Turkish President Recep Tayyip Erdogan.

Trade between the Western Balkans and Turkey has grown from $430 million in 2002 to $3 billion in 2016, with Serbia accounting for nearly one third. Turkey is now among the top 10 trading partners for Serbia and top three for Kosovo.

A member of the Turkish-Serbian Business Council, Aleksandar Medjedovic, says that Turkey is likely to remain on course with planned investments, but that there might be a delay in their implementation.

“Fluctuations in domestic currency have always had an effect on the economy and they are currently affecting the Turkish economy, but the Balkans is an area of strategic importance for Turkish investors,” he said.

Medjedovic said Turkey sees the Balkans, particularly Serbia and EU member Croatia, primarily as a “gateway” for its goods to the European Union.

“So while there are questions about new investments, that may bode well for existing ones, like the spare parts factory in Vladicin Han, a small, drab-looking Serbian town of some 20,000 people where unemployment is rife. It produces mainly rubber parts for cooling and heating systems for clients such as Volkswagen, Skoda, Audi or Porsche”, AP goes on to say.

The plant’s Turkish manager, Fikret Aynibal, said that parent company Teklas Automotive has not taken any decision yet to stop investing in Serbia and the wider region because investment plans are based on five to ten years. If anything, Aynibal said, the company might invest more as turmoil reins at home. “We are thinking to expand also in the Serbian region.”

(B92, Associated Press, 04.09.2018)

This post is also available in: Italiano

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