Turkey’s growing defense industry boosts its global influence

In the first weeks of the Russian invasion of Ukraine, a Musical clip surfaced online.

It featured clips of Russian missile launchers and tanks in the sights of a drone, while deep-voiced men chanted the words in Ukrainian: “The occupiers came to see us in Ukraine, with uniforms and vehicles brand new military, but their inventory has turned to steel… Bayraktar!”

The last word comes as an explosion annihilates a Russian target.

The video quickly went viral, the song written in tribute to the powerful Turkish-made Bayraktar TB-2 drone that helped Ukrainian forces devastate Russia’s initial offensive. The now-famous drone is produced by Istanbul-based defense firm Baykar Makina – whose chief technology officer is the son-in-law of Turkish President Recep Tayyip Erdogan.

Drones aren’t the only thing elevating Turkey’s status as a growing player in the global defense industry. The large number of international agreements concluded by the country’s defense companies in recent years reveals a rapidly increasing demand, major investments in R&D and a growing source of leverage for Turkey’s foreign relations.

In 2022, Turkey hits a record $4.4 billion in arms exports – a figure higher than the annual defense budgets of some European countries. After surpassing its export target for the year, the Turkish government aims to increase that figure to $6 billion in 2023. The country’s defense industry turnover as a whole last year was from $10 billionaccording to the Turkish Presidency of Defense Industries.

Overseas defense export revenues increased by 42% between 2020 and 2021, with foreign contracts accounting for up to 90% of revenues for some Turkish companies – such as Baykar, the Atlantic Council reported in December. Turkey is home to some 2,000 companies in the sector.

The transformation has its roots in the early 2000s, when Ankara set out a strategy to build a modern, self-sufficient defense sector and encourage domestic investment. Erdogan’s two-decade-long project, which continues to benefit from heavy state investment in local businesses, is bearing fruit as arms sales bolster Turkish influence abroad.

And while Turkey’s military manufacturing footprint is still small compared to major players like the United States, Russia and China, it has attracted outsized attention for the performance of its weapons like the Bayraktar drone, which was used in Libya, Syria and Azerbaijan. Armenian conflict besides Ukraine.

Sales of arms and technology, including drones, “have helped [Turkey] improve ties” at the international level, writes the Atlantic Council, in particular with “states such as Kazakhstan, Kyrgyzstan, Turkmenistan and Azerbaijan, and even establish new ties with various other countries such as Poland, Saudi Arabia and Tunisia”.

The sales also strengthen Turkey’s influence in the Gulf States and Europe. At IDEX, the largest arms fair in the Middle East held in February in Abu Dhabi, the presence of Turkey was unavoidable. Huge Turkish-branded pavilions showcased everything from armored trucks and drones to assault rifles, tactical gear and laser-guided missiles.

“There is a large international demand from the Middle East, Asia, Europe. Also, with the war in Ukraine, Turkey is trying to do its best to support equipment, including with drones and land platforms,” Alper Öziblen, president of Turkish defense company Pavo Group, told CNBC at IDEX.

“It shows us that Turkish products are mature enough to be used on battlefields,” he said. “Our customers, our partners are very happy.”

Öziblen and other Turkish leaders that CNBC spoke to all confirmed that they have ongoing or planned partnerships and deals with the United Arab Emirates, Qatar and other oil-rich Gulf states. Many of these countries are investing heavily in growing their own defense sectors – and some, such as the United Arab Emirates, Saudi Arabia and Qatar, have provided substantial financial support to Turkey or promised billions of dollars in trade and investment.

“Information technology is an important part of the defense field, and we are positioning ourselves in this field,” he said. And the investment shows in the numbers: Turkey’s defense research and development ‘recently increased by 30%’, according to the Atlantic Council report writing.

As NATO allies rush to supply Ukraine with weapons to fight Russia, many of those allies – especially in Europe – are running out of weapons stocks. Turkish defense makers say they are booked for the next few years with orders to help replenish NATO stockpiles.