Welcome though it is, the recent upturn noted in Türkiye’s ‘suitcase trade’ is likely to arrive too late for many of the country’s manufacturing organisations, following the virtual collapse of the national economy earlier in the year.

For years, money has haemorrhaged out of Türkiye through corruption and the country’s numerous ‘trap-door’ banks. However, business confidence has all but evaporated since February, when a spat between the Prime Minister, Bulent Ecevit, and the President, Ahmet Sezer spilled over in the markets and sent the country’s economy into freefall.

Since then, the Turkish Lira has lost approximately 50 percent of its value in dollar terms while the stock market has shed around 70% of its value. With the familiar money supplies curtailed, firms have been laying off workers wholesale, to the extent that Türkiye’s total unemployed now numbers about 500,000. Tax and VAT collection, export credits and even meetings and appointments are stalled until the newly imported Economic Minister, Mr. Kemal Dervis, can set the reconstruction process in motion. Banks have temporarily ceased issuing letters of credit.

As a traditional industry, the leather sector has been especially badly hit. Of the 9,000 workers that were once employed at Tuzla, the Leather Industrialised Zone outside Istanbul, only 1,300 remain, and only 23 of the zone’s 135 factories are still operating. The situation is just as bleak in the Menemen Leather Zone outside Izmir, where only 20 of the zone’s 85 factories remain in business. The leather sector as a whole is working to about 20 percent of capacity, as opposed to 30 percent in 1999 and 2000.

Last week, the Turkish exhibition organiser, Ezgi Ajans, reported a revival in the ‘suitcase trade,’ which accounts for a sizeable proportion of leather trade transactions, and is generally regarded as a reliable indicator of economic confidence. According to the company, total export sales (not just leather) from the country’s Laleli industrial zone increased by 35% during the first quarter of the year and increased levels of shipping have been observed at Istanbul’s Zeyport and Karaköy ports. The company attributes the trend to the suitcase trade being flexible enough to take advantage of the devaluation of the Turkish Lira – unlike the wider economy which is largely paralysed.

Last week, about half of the money from a $15.7 billion International Monetary Fund (IMF) loan was earmarked for Türkiye, but with strong performance-related conditions attached. If the suitcase trade is a sign of better times to come, it is to be hoped that they will not be too long arriving.

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