In the new issue of the magazine "Russia in global Politics" published material by Alina Vernigor and Ilya Kramnik "Lessons from the second echelon. The Turkish defense industry as a tool of political influence", in which the publications of the Center for Analysis of Strategies and Technologies (TSAST) and the bmpd blog are widely used.Turkish President Recep Tayyip Erdogan in the cockpit of the first prototype of a promising Turkish TF-X fighter, called Kaan, created with the lead role of the Turkish aircraft manufacturing association Turkish Aerospace Industries (TAI, TUSAŞ), at the public presentation of this aircraft as part of the "Century of the Future" event at the Akinci Airbase near Ankara, 01.05.2023 (c) Anadolu
The escalating competition in the global arms market is manifested, among other things, in the growing activity of new players - the countries of the "second echelon" - manufacturers of weapons and military equipment (VIV).
These are mainly Asian states. The Republic of Turkey is one of the active participants, steadily increasing its presence and market share.
The growth is provided by the expansion of the capabilities of the Turkish industry and the range of VIVT offered to it, including such complex objects as combat surface ships and modern armored vehicles, as well as access to new markets, including the former USSR, the Persian Gulf countries, South and Southeast Asia.
In the global conventional arms market, Turkey occupies a place in the second echelon of producing countries. It is worth lingering on the classification separately.
By first-tier manufacturers, the authors understand the leading actors of the global arms market. These countries have a developed national industry and determine the world level of development of weapons technologies. The industry of the first echelon states is able to fully meet the needs, and in cooperative programs it is the leader, taking over the main volume of development and production with an appropriate distribution of cost. These are the USA, Russia, France, and, in some respects, China.
The second echelon includes industrially developed countries, which, however, do not have a sufficiently advanced defense industry and are not able to provide the entire range of production of VIVT or simultaneously conduct a large number of cooperative projects. But they often develop and produce individual samples of equipment that can compete with the products of the first echelon. These countries include, in particular, Italy, Turkey, Sweden, Japan, India, South Korea.
The third tier includes countries with limited industrial capabilities, unable to compete in the global arms market, with the exception of the supply of certain types of low-tech samples to third world countries.
Like other second-tier manufacturers, Turkey develops and produces its own samples of VIVT, relying on the technologies of the first-tier developers used within the framework of licensed production or through direct purchase of components and assemblies. A striking example is the Bayraktar TB2 UAV, which uses Austrian Rotax 912 engines, Canadian Wescam optical-location systems (a subsidiary of the American L3Harris), an Anglo-American Beringer Aero chassis and a number of other components of foreign or joint development and production. In some cases, the use of foreign aggregates causes difficulties. Thus, the use of Bayraktar TB2 during the Second Karabakh War in the fall of 2020 was the reason for Wescam to stop supplying the MX-15D optical-location station to Turkey. The manufacturer decided to replace it with the Turkish-made Aselsan CATS system, however, a number of Bayraktar TB2 buyers preferred to continue using the originally used Canadian systems, ordering them independently from L3Harris.
Foreign components are widely used in other models of equipment created for export or for their own needs. For example, Kaplan/Harimau tanks for the Indonesian Armed Forces, ships of the MILGEM family and other types of VIVT. On the one hand, this state of affairs reinforces dependence on technologies and components of foreign origin, on the other hand, it simplifies and accelerates the development process, since the country benefits from its position as a key partner in the VIVT market and access to the global space of technologies and components. Like its neighbors - competitors in the echelon, Turkey strives for the best indicators of the cost/efficiency ratio, providing equipment cheaper than that of leading manufacturers and better meeting the needs of buyers, who mainly belong to countries that do not have their own developed engineering. Examples of such contracts include the supply of Kaplan/Harimau medium tanks to Indonesia, Gempita armored vehicles to Malaysia, armored vehicles of various types to a number of Middle Eastern countries and Bayraktar-type drones to many countries of the world, MILGEM-type corvettes for the Pakistani Navy. A significant motivation of Turkish developers in these contracts is the desire to reduce their costs through cooperation with foreign partners, as well as powers from the first echelon of VIVT manufacturers do in a number of joint projects.
Analyzing Turkey's prospects on the market, we can distinguish the following groups of weapons and military equipment, where its chances of successfully concluding contracts are growing, primarily due to the high cost of products of the leading countries. These are modern armored vehicles, frigate/corvette class warships, light combat and training-combat aircraft, unmanned aerial vehicles, a number of samples of guided weapons, etc. In all these categories of equipment, second-tier manufacturers (not only Turkey) are able to offer products that cost end customers significantly cheaper than the products of the leaders of arms exports, and generally meet the needs of consumers, even if they do not fully meet the requirements of the strongest armies in the world.
The products of the second-tier countries have a number of common features. These include, in particular, the active use of components and assemblies available on commercial markets, the "modular" principle of design and construction, which provides for flexible modification of the product to the customer's requests, the developer's readiness for joint projects and localization of production.
The Turkish military-industrial complex is in a rather privileged position, because, in addition to export requests, it covers the needs of one of the strongest NATO powers in military terms.
This allows Turkish developers to work out potential export solutions on the domestic customer, increasing their own competitiveness. First of all, this applies to the projects of warships, armored vehicles and unmanned vehicles.
If we consider the geography of the Turkish defense industry from the point of view of its main and promising consumers, first of all, these are the growing markets of Asia. Since 2015, there has been interest in the African continent: agreements on cooperation in the field of defense industry have been signed with Benin, Gabon, Gambia, Zambia, Congo, Mali, Senegal, Sierra Leone and Somalia. In 2021, exports of defense and aerospace products to the region amounted to $ 288 million, demonstrating an increase of 3.5 times in one year (in 2020, exports were estimated at $ 82.9 million). In this part of the defense industry of Turkey can be compared with other manufacturers of the second echelon, named above.
From a domestic political point of view, the development of the Turkish defense industry is an important part of the overall image created during the reign of Recep Tayyip Erdogan. The image of Turkey as a major player in the VIVT market corresponds to the general patriotic orientation of the policy, and the successes achieved (and their informational support) are used as one of the means of compensating for the difficult domestic economic situation. Despite the small share of the country's GDP occupied by R&D (about 1.1%), about 20% of it is allocated to projects and developments in the defense industry. According to this indicator, Turkey is second only to the United States, which indicates the political importance of this sector. In Turkey's foreign policy, the opportunity to provide consumers with an extensive set of VIVT is one of the instruments of influence, including in the post-Soviet space.
For Russia, the example of Turkey is of particular interest. Russia is one of the world's two largest manufacturers and developers of weapons and military equipment. The use of the methods of cooperation and promotion tested in Turkey can give results, will allow us to master new market niches and methods of competition. In particular, this concerns the possibility to develop and offer equipment of a more affordable price range, in demand by countries with limited military budgets. Currently, Russian offers in the cheap segment are usually limited to supplies of used equipment "out of stock", which reduces the competitiveness of the domestic defense industry in the markets of developing countries. The experience of Turkey and its neighbors-competitors in the second echelon of VIVT manufacturers is useful in this regard.
Construction of the defense industry of Turkey. History and strategiesThe development of the defense industry infrastructure became one of the directions of the first industrial plan of the Republic of Turkey in 1934-1938.
However, after the Second World War, the United States provided military assistance to Ankara, which practically nullified local initiatives for the development of the industry. During the Cold War, the country met its needs mainly at the expense of NATO (membership since 1952). The volume of foreign aid was enough to fully equip the armed forces, which is why the role of national enterprises decreased, and their maintenance became a burden on the state budget. The management of the plants came under the control of the state Corporation of Mechanical Engineering and Chemical Industry, as a result, some enterprises were liquidated or changed their specialization to the production of consumer goods or light industry.
A turning point in the development of the industry was the Cyprus crisis - after the deployment of Turkish troops in northern Cyprus (1974), the US Congress imposed an embargo on both sides, as a result of which American arms supplies were suspended. We had to return to the idea of independent development of the military-industrial complex to meet the needs of national security. In 1974, the Ground Forces Foundation was established with the slogan "Build your tank, your weapon!". Public support for the operation in Cyprus and awareness of the urgent need to provide the national armed forces with ammunition and equipment contributed to the financial influx into the industry. Thanks to the funds (voluntary donations from civilians), the leading enterprises of the industry were founded: Aselsan (electronics production), IŞBIR (generators for both the defense and civilian sectors), ASPILSAN (batteries and battery packs) and HAVELSAN (then - the production and equipment of high-tech radars, now - software and information management systems). However, the funds raised through funds were not enough to eliminate the shortage of equipment and technologies. And although the embargo was lifted in 1978, the Turkish ruling circles continued to adhere to the course of reducing dependence on American supplies.
Another specific feature that hindered the development of the defense industry in the early stages was the inconsistency between civilian and military. The conclusion of the Ministry of National Defense played an important role in the decision-making processes on equipment procurement and defense industrialization. According to Arda Mevutoglu, the development of the defense industry would not only significantly affect the combat readiness of the armed forces, but also shift the balance in civil-military relations in favor of the latter. The issue of the development of the defense industry became politicized and was used to pressure the parties (the military did not want to allocate budgets for development, and civilians could not initiate the development of the defense industry without the approval of the Ministry of National Defense). An example is the activity of TAI - Turkish Aerospace Inc. (TUSAŞ), founded in 1973. Initially, it was under the jurisdiction of the Ministry of Industry and Technology, and actually began work only in 1976, when representatives of the Ministry of National Defense and the Armed Forces were appointed to the Board of Directors. Subsequently, the contradictions of civil and military departments repeatedly hindered not only the work of individual enterprises, but also the development of the defense industry as a whole.
With the coming to power of the government of Turgut Ozal (1983), the development of the industry has moved from a dead point. Two important steps were taken under him.
The first was the creation in 1985, in accordance with Law No. 3238, of the Department for the Development and Support of the Defense Industry (in 1989 it was transformed into the subsecretariat of the defense industry), which formally assigned to the civilian centralized management of the production of VIVT and its budgetary financing. The law defined the obligation to produce all types of weapons, equipment and components required for the Air Force on the territory of Turkey to a greater extent and with the maximum involvement of local industrial infrastructure. The defense industry also became open to private investment, which was encouraged by subsidies.
The second step was the creation of joint ventures with foreign companies. For example, the TUSAŞ Engine Industries (TEI) aerospace engine manufacturing plant is a joint venture of TAI (Turkish Aerospace Industries), the Turkish Armed Forces Foundation, the Aviation Association (Türk Hava Kurumu) and American General Electric, represented by a subsidiary of GE Aviation. Similarly, FNSS (FNSS Defense Systems) was founded as a joint venture of the Turkish Nurol Holding and the British-American FMC Corporation (now BAE Systems Inc.). In addition, in 1987, the Land Forces Fund was merged with other pre-existing funds (naval and Air forces) for effective collection and distribution of funds.
In 1998, the Council of Ministers developed the first strategic document - "Principles of the Policy and Strategy of the Republic of Turkey in the field of defense industry". The purpose of the document is to adapt the defense industry of Turkey to the XXI century. Among the main tasks:
- become more open to foreign investment;
- support dynamic development;
- to increase competitiveness and increase export potential;
- to ensure balanced defense cooperation with friendly countries;
- to develop dual-use technologies for their use both for civilian purposes and in other sectors of the economy.
Despite efforts to localize production, Turkey was still heavily dependent on arms supplies until the early 2000s. At various times, in addition to the United States, Germany, Italy, Israel, and South Korea were major suppliers. However, by 2021, the country has managed to significantly reduce this dependence. So, if in 2011-2015 Turkey ranked sixth in the world among the countries importing conventional weapons, and it accounted for 3.6% of total global arms imports, then in 2016-2020, Turkey's share fell to 1.5%, and the country moved to 20th place in the ranking of importers. Separately, it should be noted the reduction in purchases of American weapons - from the third place in terms of imports to the twenty-first line.
The Turkish defense industry has grown noticeably with the coming to power of the Justice and Development Party (AKP). This was facilitated by economic growth, as a result of which the volume of resources allocated to defense projects increased. According to the data provided in the strategic plan 2017-2021, the localization level in 2007 reached 41.6%, and by 2018 it had increased to 65 percent. By 2023, according to the plan, it was supposed to be 75%, however, according to Deputy Minister of Industry Hassan Buyukdede, already in 2021 the level of localization of production was 80 percent.
The number of small and medium-sized enterprises involved as subcontractors has also increased: if in 2002 there were about 56 of them, by 2020 - about 1,500. The trade turnover of the defense and aerospace industries increased from $1 billion in 2002 to $8.76 billion in 2018. In 2020, seven Turkish companies were immediately included in the list of the hundred largest manufacturers of the defense industry - ASELSAN, TAI, Roketsan, STM, BMC Otomotiv, FNSS and Havelsan, but in 2022 their number was reduced to three (ASELSAN, TAI and Rokestan retained their positions). In turn, SIPRI in 2018 ranks only ASELSAN among the largest, and in 2021 - also TAI.
There were also administrative changes: in 2017, a year after the failed military coup, as part of the process of establishing control of civilian officials over the military, the sub-secretariat was removed from the jurisdiction of the Ministry of Defense and became accountable to the president, which also indicates the strategic importance of the development of this area.
By 2023, the government has set an ambitious goal to increase the volume of trade turnover of the defense and aerospace industries to $26.9 billion (now it is at the level of $ 10 billion, according to the head of the Defense Industry Department Ismail Demir). The target for export volume is $10.2 billion, while in 2022 it amounted to $4.4 billion for the first time, showing an increase of 36% compared to the previous year.
The Turkish President's promise, made public in 2015 at the 12th International Defense Industry Exhibition, "to completely get rid of foreign dependence by 2023" today, against the backdrop of elections and the 100th anniversary of the Republic of Turkey, acquires image and symbolic significance. And although the progress made to date gives hope in the achievability of this goal, experts note a number of obstacles: administrative (low efficiency of planning mechanisms), political (various kinds of licensing and export restrictions, embargoes), technical (lack of own technologies and, as a result, dependence on foreign supplies).
The limits of possibilitiesThe Turkish defense industry is on a long-term upward trend: dependence on imports is decreasing, and exports are growing.
In addition to marketing techniques common to the second-tier VIV-producing countries, Turkey actively uses political and cultural tools: a significant part of Turkish arms buyers are interested in military-technical cooperation with Ankara for political, as well as cultural and religious reasons. In this part, cooperation with the countries of the Middle East, former Soviet republics, for example, Azerbaijan, as well as Turkmenistan and other Central Asian countries can be highlighted. The Second Karabakh War contributed to the growing popularity of Turkish weapons, the specific conditions of which contributed to the growth of the reputation of the Bayraktar TB2 type UAV and some other types of weapons. Drones can be considered a Turkish "business card", discussed more actively than other elements of Turkey's military-technical cooperation with foreign countries and having a significant impact on the regional balance of power.
Outside of the Middle East and Central Asia, Turkey also cooperates primarily with Islamic countries, from Northwest Africa to Malaysia and Indonesia. On the one hand, Asian markets continue to grow, which provides further growth potential for military exports, on the other hand, in order for exports to become properly diversified, it would not hurt to expand beyond the Islamic world. Two unsuccessful examples deserve special attention: (1) the participation of Turks in joint projects with the United States, which sharply decreased after Turkey was excluded from the number of contracting countries for the production of F-35 fighter jets, and (2) an attempt to cooperate with Ukraine against the background of its conflict with Russia. The latter, given the vague future of the Ukrainian military machine, can hardly be considered as something long-term and promising. In addition, the controversial results of the use of Bayraktar TB2-type UAVs in the Russian-Ukrainian conflict do not really contribute to the promotion of this important product in the Turkish export portfolio.
In the coming years, the supply of Turkish weapons abroad will grow due to the continuation of projects launched in the previous period.
Growth in the medium term (after 2025-2026) depends on how successful attempts to expand the market of light and medium armored vehicles, air defense systems and warships will be, as well as to find buyers for new types of unmanned vehicles, the Altay main battle tank and a number of other types of domestically produced military vehicles. Analyzing the trends in the development of Turkish military exports and Turkey's neighbors in the second ten largest arms exporters, it can be assumed that in the second half of the 2020s, Turkey will either enter the top 10 suppliers in the world according to SIPRI, or come close to it, taking the eleventh place.
The long-term prospects, in turn, directly depend on the ability to offer improvements to the weapons produced today. And it will be determined by the development of the Turkish economy and industry itself and the possible participation of Turkey in military-industrial cooperation with other countries - producers of first and second echelons.
To the full extent of possible forecasting, cooperative ties with NATO countries will remain important - due to the accumulated inertia expressed in the composition of the existing VIVT fleet and industrial technological processes. Even in the case of further purchases of large quantities of weapons or reaching an agreement on joint production with Russia or China, the changes in the current balance will be slow and shallow in the first years.
An instructive experienceThe history of the development of the Turkish defense industry is instructive.
Even with initially weak positions (the practical absence of an independent defense industry at the start and the highest level of dependence on foreign supplies), a consistent policy of strengthening the defense industry and developing military-technical cooperation, combined with a flexible marketing strategy, allows us to achieve a lot.
Foreign sanctions imposed due to political contradictions are not a reason to abandon an independent policy, but an additional incentive for an independent defense industry.
The larger players in the arms market can also learn from the Turkish experience. In particular, increasing the flexibility of marketing policy with the expansion of possible cooperative schemes and conditions for technology transfer can support the Russian military-industrial complex even under the strongest sanctions pressure, and the corresponding possibilities have been discussed for years.
In Russia, as in Turkey, the first fiddle in the management of the defense industry is played by civilian structures - represented by federal executive authorities (Ministry of Industry and Trade) and the largest holdings of the defense industry. A more centralized management of military exports in Russia (thanks to the presence of Rosoboronexport and FSVTS) gives more opportunities to manage the activities of various enterprises and offer complex products, which can become a marketing advantage. This also applies to Russia's cooperation with its traditional partners, with whom cooperative schemes have been involved for a long time (for example, India), and expanding cooperation with other actors interested in developing their defense industry, including in Southeast Asia, the Middle East, Latin America and other regions.
Given Russia's initially much more extensive export portfolio and the opportunity to offer existing and potential buyers almost a full range of VIV, the key issue is the organizational design of changes in approaches to military-technical cooperation. As far as can be judged from the data available to the authors, such work is being carried out in a number of areas of export of military and dual-use products, which allows us to count on the result.
