The Turkish jewelry sector, which often stated that they had difficulty in competition after the quota imposed on gold, started to move their investments to Dubai last year. EKONOMİ had reported on the issue in August last year. In the intervening period of about a year, the sector companies stated that they lost their competitiveness due to the quota and that they are in new location searches for this reason.
Burak Yakın, President of the Jewelry Exporters’ Association, also drew attention to the issue and said, “This process has been very corrosive for our jewelry sector as well as for our country. Many foreign investors who had invested in our country, especially those from Dubai, left Turkey. 2,500 of our manufacturers are preparing to invest abroad.”
“Some of our Turkish companies went to Dubai, and now there are some going to Egypt. Egypt is now the new China. It is attractive with cheap labor. Tax advantages, free trade agreements and ease of access to gold make it attractive. The lowest average wage in our sector is around USD 1200, in Egypt it is USD 280. If the quota is not lifted, one third of the sector will go here,” he warned.
Stating that the quota should be lifted urgently, Yakın said, “It is believed that imports will decrease. The reason for this is the gold going to our neighbors surreptitiously. We are the sector with the highest added value. We have an added value between 2,000 and 4,000 dollars per kilogram. Our lowest salary is at least TRY 30,000 and we are in a good position in the world. If the quota continues, the investments shifting to Dubai will continue.”
“7-8 big companies open factories in Egypt”
According to CNBC-e’s Barış Erkaya, underlining that the real problem is the investments going to Egypt, Yakın reminded that Egypt, which has a minimum wage of USD 280, has now become attractive. “Companies are opening factories in Egypt. 7-8 companies opened factories. USD 250 million of investment has been done in Egypt. The money including capital has reached USD 1 billion. Gold in Egypt currently costs USD 300 less than in Turkey, where it is USD 1000. It is also advantageous in that respect. We are not a country that prints foreign currency. There is gold going surreptitiously. In other words, unrecorded gold is going out and unrecorded gold is coming in,” he said, emphasizing the seriousness of the situation.
”2,500 producers are preparing to go abroad”
Yakın warned against the urgent situation and spoke as follows: “Egypt is our competitor and a new China. Cheapness encourages us. Unless we remove this quota, Egypt will be ahead of us. They have started to overcome their security fears, they have a large population, the minimum wage is affordable; therefore, our investors are going there rapidly. 35 percent will shift to Egypt. 2,500 producers are preparing to invest abroad. Taxes are relaxed there, there is a free trade agreement. The cost of an employee in our country is USD 1,200, we cannot compete with Egypt under these condition”.
Jewelry exports increased by 287.65 percent in July
Stating that jewelry exports, which have been in the minus for a long time due to the gold quota problem, have increased as a result of the struggle, Yakın continued as follows: “In the period of July 1-19, our jewelry exports, which was USD 159 million last year, increased by 287.65 percent to USD 616,37 million. Compared to the same period last year, our exports turned positive and increased by 6.69 percent to USD 3,43 billion. Production exports hit a record this year with an increase of 38 percent. Bullion exports declined by 67 percent. We believe that we will come to much better places as of the day the gold quota is lifted.”
