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The original version of this analysis can be found on the ISN website

In recent years, Turkey’s defense industry has dramatically increased its exports, supported by a proactive foreign policy. The country is also planning to increase reliance on local industries for internal needs – putting the country well on its way to becoming a globally established actor in military procurement.

By Francesco F Milan for ISN Insights


In four years, Turkey has managed to double its defense exports. As calculated by the Turkish Defense Industry Manufacturers Association (SaSad), defense companies exported $669 million worth of products in 2009 – up from $337 million in 2005. Although this represents an important leap forward in absolute terms, Turkey is still far from being a top-level defense exporter on a global scale. For example, according to data provided by the Stockholm International Peace Research Institute (SIPRI), Italy closed the top-ten list for arms transfers in 2009, with exports 11 times higher than Turkey’s.

However, Turkey is investing heavily in the sector, trying to strengthen exports through its diplomatic network. During President Abdullah Gül’s recent visit to Indonesia, Turkey signed a $400 million deal for the provision of communications and weapons systems – just one example of how Turkish diplomacy is promoting its defense industry abroad.

The government is also intervening at a domestic level; the Undersecretariat for the Defense Industry (SSM) is planning to develop an initiative which will consist of a system of low-interest credit to cover the export costs sustained by defense industries. Similarly, the creation of the Ostim Defense & Aviation Cluster, an organization that includes more than 60 small and medium enterprises (SMEs) operating in the defense sector, is designed to enhance coordination of SMEs based in the industrial area of Ostim, Ankara. Since its founding in 2007, the cluster has been supported by institutions and associations such as SaSad, SSM, and the Ministry of Industry and Trade.

Indigenous projects, foreign problems: Turkish UAVs, jet fighters and helicopters

According to SIPRI, Turkey was the world’s 16th largest arms importer in 2010. It nevertheless managed to spend 30 percent less acquiring foreign arms than it did in 2009. At the moment, Turkey remains an importer of defense equipment, but its long-term strategy is to reverse this trend and it has already launched a few projects to help decrease reliance on imported defense systems. In 2010, Turkish Aerospace Industries (TAI) presented the first medium-altitude long-endurance (MALE) unmanned aerial vehicle (UAV) produced by a Turkish company. It is likely to be acquired not only by the Turkish Air Force but also by the Army and Navy, which altogether currently employ more than 200 MALE and Mini-UAVs.

A second, more ambitious, project aims to reduce Turkish dependence on US-produced fighter jets. Earlier this year, SSM provided TAI with $20 million, and gave it two years to design a new fighter aircraft, which TAI might then develop and produce in partnership with a foreign company by 2020. As this project enters its preliminary phase, Turkey is experiencing problems in its negotiations with the US over the acquisition of around 100 F-35 jet fighters – with Turkey also being informed that an extra $4 billion will be required to finance the deal. This high price tag is coupled with US-imposed limitations on the supply of components and on information sharing: the main problem seems to be the refusal to share the source codes for the jet fighters’ software. Previously, Turkey managed to partially circumvent the problem by relying on Israel’s cooperation; current relations between the two countries have, however, hindered this partnership. These issues, then, seem to be the main drivers for the government’s push to develop an indigenous jet fighter.

Another important deal has just been signed: Over the last two years, the Defense Industry Executive Committee was charged with deciding whether Turkey should join forces with US company Sikorsky, or the Italian-British company, AgustaWestland, for the production of more than 100 utility helicopters. The Committee – chaired by the prime minister and comprised of the minister of defense, the chief of general staff and the head of SSM – met several times over this matter, but it only reached its final decision this week. The government justified the delay by saying that it deemed both proposals too costly; in response, Sikorsky and AgustaWestland tried to make their offers more attractive. Despite the fact that Turkey had already signed two deals with AgustaWestland in 2009 for the co-production of more than 50 attack helicopters, the Committee ultimately decided to sign the contract offered by Sikorsky, which will bring 109 helicopters for $3.5 billion.

Enhancing strategic partnerships

President Gül’s recent visit to Indonesia was aimed at strengthening diplomatic and economic relations. With a population of 246 million, 86 percent of whom are Muslim, Indonesia is likely to become one of Turkey’s main strategic partners in Asia. Three of the largest Turkish defense companies – FNSSAselsan and Roketsan – have signed a deal with Indonesia to deliver armored vehicles, wireless devices and rockets worth around $400 million, and there might be a second agreement with TAI on the horizon, for the joint production of naval vessels and the modernization of Indonesia’s F-16s.

Indonesia is not the only Southeast Asian country that Turkey is eyeing; the country has also recently cemented a strategic relationship with Malaysia. A few months ago, the two countries signed a $600 million defense deal stipulating that FNSS will manufacture 257 armored vehicles in partnership with Malaysian DefTech – the biggest deal ever signed by a Turkish defense company. Turkey is likely to cooperate closely, given that Malaysia was the world’s sixth largest arms importer from 2009-2010.

Closer to home, Azerbaijan is a trusted ally of Turkey and a long-time partner in defense procurement. While Turkish Otokar has secured a deal to supply an undisclosed number of armored personnel carriers to Azerbaijan, Roketsan, in cooperation with an Azeri company, has started test production on a range of different rockets. Should tests prove successful, a contract for full-scale production will follow.

Pakistan is another strategic partner. The world’s second largest defense importer, Pakistan has a well-established relationship with Turkey. TAI is modernizing the Pakistani air force’s F-16, and Aselsan is providing wireless equipment to the Pakistani army. Moreover, Pakistan is among the countries that have shown interest in buying Turkey’s new UAV.

From importer to exporter?

Turkey’s strategy of relying on long-time partners, while strengthening relationships with new ones, is aimed at making long-term strides. Trading with major importers such as Pakistan and Malaysia will increasingly net a clear payoff, and collaborations with Azerbaijan and Indonesia are likely to be highly profitable. Furthermore, the Turkish defense sector is likely to receive a rejuvenating boost in the coming decade from this renewed engagement. As a result, Turkey may finally be able to start relying on domestic production for its defense needs – and perhaps even be in a position to present their defense companies’ products abroad. Focusing on exports is going to be an important turning point for companies operating in the sector, as a great deal of Turkish defense procurement is currently employed in internal security operations in the Southeastern region of the country. Should the threat posed by domestic terrorism diminish, the country’s need for weapons systems would shrink accordingly. In a scenario with a reduced internal demand, closing deals with foreign countries would become fundamental for the survival of Turkish defense companies.


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