Energy shortages paralyze Turkish industry

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The suspension of natural gas imports from Iran is causing problems for the Turkish industry. Another blow to Erdogan’s economic policy.

2021 was a good year for the Turkish car industry and especially for its suppliers. The industry is benefiting from the fact that due to the pandemic, large manufacturers no longer risk a lot of orders in distant Asian countries, but often prefer neighboring Turkey. “Turkey is now an alternative, if not the first choice. This has been seen in the increase in exports in recent years, it has been a joyous event for us,” said Albert Saidam, president of the Turkish Automobile Suppliers Association.

However, last week’s events cancel out the festive mood. Iran has said it will cut off gas supplies to neighboring Turkey for ten days due to “technical problems”. The Turkish government was forced to limit gas and electricity consumption in the country’s industrial areas, while contacting large industries, seeking solutions. According to State Minister Fatih Donmez on state television, “many companies prefer to take a break, for a few days, only to return later. In other companies, we have again managed to ensure a minimum supply of gas and electricity.”

“Turkey is not the only problem”

Albert Saidam estimates that a forced three-day “break” for the supplier industry would result in a loss of $ 1 billion. In addition, he points out, the image of the country as an investment destination is endangered. “All this is taken into account in the risk assessment, when the suppliers are selected”, emphasizes the president of the association. “Of course this is a more general problem. Today Turkey happened to be the first to face it, tomorrow it can be presented in any country that does not have its own energy sources.”

Political opponents of the Erdogan government, however, argue that the real reason for the reduced imports from Iran is the lack of foreign exchange in Turkey itself. Some even say that Turkey is late in paying the bills for the supply of natural gas, something that is denied by the President of the country, Tayyip Erdogan. “We have no debts to Iran, these accusations are false,” he said. If this is the case, the reasonable question is why the government is reducing its total gas supplies by 40%, when Turkey supplies only 16% of the gas it needs from Iran, while the rest comes mainly from Russia and Azerbaijan. Is the lack of energy added to the problems facing the Turkish economy for years?

Entrepreneurs are “tired”

Iran has announced that gas exports to Turkey will resume “from February”, but Erdogan himself estimates that it will take “10 to 15 days, unless something unexpected happens”. All of this is not good news for Albert Saidam. He owns a tire factory near Istanbul and had scheduled extra shifts for the weekend to meet increased orders. In the absence of natural gas, it is now forced to resort to generators. Even large German companies, such as Siemens, which produce in Turkey, do the same. How long will this uncertainty last? “Flexibility and adaptation to difficulties are a traditional advantage of Turkish industry,” says Saidam. “But I must say that we are tired of this situation …”

Karin Senz (ARD)

Edited by: Giannis Papadimitriou

Source: Deutsche Welle

Source: Capital

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