Why Turkey sees potential in Venezuela despite its crisis?

In just five months, Venezuela exported 834 million dollars to Turkey in precious stones, iron and steel

Why Turkey sees potential in Venezuela despite its crisis?

Nicolás Maduro will go down in history as one of the most unpopular and controversial presidents of Latin America. The Venezuelan president has won great enemies beyond its borders. However, a country in the Middle East seems to approve its regime and be willing to generate strong economic alliances.

Leer en español: ¿Por qué Turquía ve potencial en Venezuela a pesar de su crisis?


This is Turkey, a nation led by Recep Tayyip Erdogan, one of the first presidents to condemn the alleged attack against Maduro with drones and who during the last 12 months has established a series of agreements with the Venezuelan leader in favor of mutual benefit.


In 2017, Erdogan and Maduro signed a series of trade agreements that included everything from agricultural exchanges to cooperation in security matters. Since then, the Venezuelan leader has visited Turkey three times, strengthening his bilateral relations and becoming the first president of Venezuela to visit the Turkish nation.


According to figures from the Turkish Statistical Institute, trade relations between countries only in the first five months of 2018 almost reach 900 million dollars. Of which 834 million corresponded only to Venezuelan exports of precious and semiprecious stones, iron and steel products. While the imports from Turkey are mainly basic consumer products, such as wheat flour, pasta, soap, sanitary products, dental products, and medicines.


Despite the superiority in the volume of exports from Venezuela, the Bolivarian nation is going through a deep crisis of shortages and according to projections of the International Monetary Fund (IMF), the inflation rate will close in 2018 at 1,000,000%.


Resources in exchange for industry


Due to the unbridled imbalance of the Venezuelan currency and the constant changes in it, Turkish entrepreneurs have promoted barter trade to finance exports and the exchange of products or services.


As indicated by the BBC Turkey, the president of the Turkey-Venezuela Trade Relations Council, Selim Bora, Venezuela is still considered one of the richest nations in natural resources and minerals in the world, but due to its crisis, it has problems to enhance its advantages. This factor makes Turkish businessmen recognize the importance of the South American country and want to offer their experience in the manufacturing industry and services in exchange for products that are not so easily found under Turkish soil.


Also read: Paraguay and Taiwan: An unlikely but fruitful relationship  


Under this dynamic, during the last year, the Venezuelan government has encouraged the investment of Turkish companies in its territory offering a profit of 70 - 30. Which means that 70% of the resources exploited would remain under the property of the foreign firm. change of the creation of facilities and realization of works, while the Venezuelan state would remain with the remaining 30%, explains Bora to the BBC.


Some analysts consider the practice a risk for both nations, in the case of Venezuela the barter is interpreted as a drain on resources, and in the scenario of Turkey, the volatility of the economy in the South American nation does not guarantee success at least half term.


In the words of Bora delivered to BBC, "the companies and countries that have not yet left Venezuela and try to maintain their presence there do not think about what is happening now, but about what will happen in the future", besides that, Turkey's confrontation with the US has left the Turkish nation isolated and with a lack of new allies, so that Venezuela becomes a potential, even plunged IGNORE INTO crisis.



LatinAmerican Post | Krishna Jaramillo

Translated from: '¿Por qué Turquía ve potencial en Venezuela a pesar de su crisis?'

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