Turkey’s growing defense industry is a cornerstone of Erdogan’s independent and assertive foreign policy for two core reasons. The industry steers attention away from Turkey’s currency crisis and troubled foreign policy. Turkey has undermined its traditional allies by purchasing the Russian S400 missile system, pursuing energy ambitions in the Eastern Mediterranean, expanding its sphere of influence in Libya, and pushing Operation Peace Spring which prompted NATO members to impose sanctions on Turkey. Hence, the growing defense industry gives Turkey greater maneuverability in its foreign policy by ensuring less reliance on arms imports and more autonomy.

Turkey’s defense industry has boomed in the last decade. In 2010, Turkey had one company on the list of Top 100 Global Defense Companies. Presently it has seven—more companies than Israel, Russia, Sweden and Japan combined. Turkey’s share of arms imports from 2015 to 2019 decreased by 48 percent compared to the preceding five-year period.  The country has transitioned from importing 70 percent of its military hardware to 30 percent. Concurrently, the Turkish arms industry grew from $1 billion in 2002 to $11 billion in 2020, more than $3 billion of which were exports, making Turkey the fourteenth largest global defense exporter. The state has invested $60 billion in defense projects, and given Greek-Turkish tensions over energy rights in the Eastern Mediterranean, Turkey has established a navy to match the Hellenic.

Moreover, Turkey is one of only twenty-two states manufacturing armed drones, adding another dimension to its regional military might. Pro-government media coverage indicates that Erdogan’s desire to expand and develop the domestic arms industry has become a personal project. Erdogan issued a presidential decree on July 10, 2018, placing the Undersecretariat for Defense Industries (SSB) under the presidency’s direct control and renamed the SSB the Presidency of Defense Industries. This—Erdogan’s political ambition—is arguably the greatest driver behind Turkey’s growing defense industry.

It may seem as if Turkey’s defense industry has transformed into a powerful export industry, as it exported $2.2 billion in 2018, effectively making it the 14th largest arms exporter in the world. However, much like Turkey’s other megaprojects—the Istanbul Canal, Selim Sultan Bridge, the new Istanbul Airport, and Çamlıca Mosque—Turkey’s defense industry is as much about projecting an image of power to the domestic population. Challenges to the continued boom in the industry are a testament to this. 

For example, the United States has blocked the export license of the partially U.S.-manufactured CTS-800A turboshaft engine to Turkey amid growing diplomatic tensions. Meanwhile, Turkey lacks the cost-effective technical capacity to develop engines to power its military designs. With Washington’s intervention, Turkey risks losing over a billion dollars in potential exports due to this technical shortfall. Specifically, a $1.5 billion export contract between Turkey and Pakistan for thirty attack choppers, signed in 2018, remains unfulfilled. The contract will likely fall through, because of the US blocking the export license for the engine needed. Consequently, Pakistan is now looking to China to update defense infrastructure that Turkey has failed to provide.

Turkey’s engine dependence has also led to delays in the completion of another major contract for Turkey’s main battle tank, the Altay. The Altay is the world’s most expensive battle tank at a unit price of $13.75 million. Qatar has signed an unspecified billion-dollar contract to purchase up to 100 Altay tanks from Turkey, which would constitute one of the defense industry’s largest arms exports in decades.[1] However, Turkey relies on German engine expertise to produce these tanks, and Germany is withholding technology from Turkey due to political concerns. Similarly, Turkey’s Akinci drone—which will play a critical role in maintaining the Air Force’s operational capacity—is dependent on Ukrainian AI-450 turboprop engines. However, Ukraine is also reluctant to exchange military technology with Turkey, due to general concerns about technological and intellectual property rights. Therefore, Turkey’s engine problem has jeopardized several billion-dollar contracts and is a testament to the high level of external dependency from which Turkey is paradoxically trying to escape.

Although Turkey wants to use its growing domestic arms industry to wrestle free of traditional allies, the industry remains highly dependent on these partnerships, and not only when it comes to the production of engines. The launching of Turkey’s “Operation Peace Spring,” when Turkey invaded Kurdish-held areas in northern Syria, led a series of European countries to issue an embargo on primary and vertically integrated sectors related to Turkey’s defense industry. The two-month embargo cost Turkey’s industry about $1 billion in production, a high price for an industry with just $11 billion in revenue. Much of Turkey’s defense industry is dependent on Western military technology—including beyond engines—a fact Ankara is hesitant to acknowledge. As such, Turkey’s biggest naval vessel—the 27,000-ton, amphibious assault ship TCG Anadolu—is based on the Spanish Juan Carlo I. A large chunk of Turkey’s modern navy vessels, including the Barbaross class frigates, Yavuz class frigates, and Kılıç class fast attack craft, were designed in Germany. Turkey’s attempt to build an indigenously produced fighter jet relies on a British company that has scaled back cooperation efforts, and the Altay battle tank is technologically assisted by a South Korean company. Thus, Turkey’s research and development is simply not sophisticated enough for its main prestige projects.

Given that intellectual property rights are a major point of contention in the arms industry, for the foreseeable future, Turkey will most likely remain dependent on expensive foreign technological assistance. The cost of this dependency will be exacerbated by Turkey’s currency depreciation predicament. In addition, since the failed coup in July 2016, Erdogan has orchestrated a large-scale Gülenist purge which is leading to a national brain drain. Nepotism and a political climate of fear have been on the rise, and last year alone, 330,000 people migrated from Turkey. While all sectors are impacted, the nationwide brain drain has significant impact on the defense industry. In 2018, 270 senior defense contractors were either headhunted or left Turkey in pursuit of better opportunities abroad. Two of the primary immigration destinations were Germany and the United States—both of whom have shown a reluctance to share military technology with Turkey, with billion-dollar consequences. And there is reason to believe that this phenomenon will only increase as workers cite the current political climate of fear as a reason for emigrating.

While the Turkish defense industry has grown exponentially[2], this trajectory may not continue due to chronic engine problems, sectoral brain drain, and the general lack of sophisticated know-how. Moreover, it should be emphasized that the main recipient of Turkish military technology is Turkey. With domestic markets soon saturated, and no short-term solution in sight for these very real technical structural issues, the Turkish defense industry may not be able to continue its boom. Nonetheless, creating an indigenous defense industry has been a major domestic political win for Erdogan, and for this reason alone, it will most likely continue to develop. It may not be economically feasible, but politically it remains a priority. Erdogan can now project the image of growing Turkish military might, often laden with Ottoman symbolism, to the Turkish people. While the industry’s growth has highlighted external dependence, the connotations of being a military manufacturer give Erdogan more domestic leeway to pursue an assertive foreign policy fit with that of a major military power.

Ferhat Gurini is a freelance journalist based in London focusing on the transnational Kurdish issue and Turkish politics. Follow him on Twitter @FerhatGurini.

[1] While Turkey was an arms-importing country prior to the 2010s, in 2018 Turkey exported $2.2 billion in arms. Although the exact numbers for the sale of the tanks to Qatar are unclear, it is most likely around 100 tanks at a production cost of $13.75 million (with the costs of purchase being even higher). Thus, the production costs alone would make up more than half of the exports for 2018, and as such, the Altay sale is one of Turkey’s biggest arms exports in the last decade.

[2] Turkey was the third most arms-importing country in 1999. In 2018, it was the 14th most arms-exporting country.