At a time when US defense giants such as Boeing, General Dynamics, Lockheed Martin and Raytheon experienced a drop in combined revenue, Turkey’s defense firms reported exceptional increases, but analysts say Turkey’s military-industrial complex has a long way to go before it produces true global giants.
According to the Stockholm International Peace Research Institute’s (SIPRI) report “Top 100 Arms-producing and Military Services Companies, 2022,” many leading Western arms manufacturers saw their combined revenues shrink, yet four Turkish companies’ revenues went up by 22%, which made them the main driver of sales growth in the Middle East region and represented the largest annual percentage revenue increase by any region last year.
While this is an impressive feat, the bottlenecks in many of Turkey’s prestige defense projects and discussions with experts show that the Turkish military-industrial ecosystem has a long way to go before it can truly fulfill Ankara’s geopolitical ambitions.
Guns and butter and other things
Perhaps the most famous of the four is Baykar, which entered the SIPRI list for the first time in 2021. Baykar reported a staggering increase of 94% in revenue in 2022 by registering a record $1.42 billion in 2022, according to the SIPRI.
Baykar’s internationally famed Bayraktar TB-2 drones have made a name for themselves in such places as Azerbaijan, Iraq, Libya, Syria and Ukraine. The company’s latest signature project, Kizilelma or “Red Apple,” is slated to become the first autonomous air-to-air combat drone. The company’s chairman, Selcuk Bayraktar, is an MIT-trained engineer and the younger son-in-law of Turkish President Recep Tayyip Erdogan, and he is viewed as a potential successor.
The other three companies on the SIPRI list, Turkey’s state-owned missile producer Roketsan, the country’s largest defense firm Aselsan and Turkish Aerospace firm TUSAS, often present integrated solutions to the Turkish military and allied countries. Roketsan, as the name suggests, specializes in building rockets, ballistic missiles and other munitions and registered $790 million revenue in 2022, according to the SIPRI.
Aselsan, the acronym of the “military electronics industry,” produces or oversees virtually all electronic components that go into Turkish defense platforms. It registered $2 billion revenue last year, SIPRI said.
Roketsan and Aselsan are also at the forefront of Turkey’s cutting-edge civilian projects. Roketsan is the main contractor developing Turkey’s space probes and delivery rockets.
Aselsan, which contributed to the design and production of the Gokturk family of orbital satellites, is working on new satellites that Roketsan-made vehicles will deliver into space. Aselsan made waves in the 2010s when it developed hardware and software for Turkey’s 4G mobile data network, and its work on 5G and other civilian systems could help thwart Chinese attempts to make inroads into the Turkish telecom infrastructure and defense tenders.
While Aselsan ranked highest among its fellow Turkish companies — coming 54th on the SIPRI list — Turkish Aerospace TUSAS, which recorded $ 1.26 billion in 2022, is responsible for some of Turkey’s most promising defense projects. For decades, TUSAS has produced drones, aircraft parts and other components for dozens of domestic and international projects.
Good news and bad
The four Turkish companies’ appearance on the SIPRI report is a testament to Ankara’s growing international and commercial clout.
Kozan Erkan, a defense analyst and writer for the website Defence Turk, believes the country’s defense industry began to form its own ecosystem.
“While exports increase, items with added value continue to increase,” Kozan told Al-Monitor, pointing out that Ankara’s policies also contribute to that export growth. “While Western countries place limits on how purchasing countries could use their defense products, Turkey gives its partners more leeway.”
While acknowledging its success, a senior advisor for a Turkish defense firm, meanwhile, cautions that the industry also faces some problems.
Among them is redundancy. The advisor says that Turkish military personnel often complain that some defense firms developed similar projects that duplicated each other. “Instead, companies should focus on specialized products and services that would benefit all parties,” the advisor told Al-Monitor on condition of anonymity to speak freely.
According to the advisor, the Turkish Presidency’s Defense Industry Agency could prevent these sorts of redundancies by increasing its coordination with firms such as Baykar and TUSAS in a bid to prevent them from undermining each other.
The management of public procurement should also become more transparent, he added.
Another major problem, according to the advisor, is the lengthy period before new products complete their tests and enter serial production.
“The Altay tank still does not have an engine. We built one or maybe a few for more prototypes for testing. But we have been waiting for them to go into mass production. Is that it?” he said. Due to US and Western embargoes, Turkey is working on acquiring licensed South Korean engines to power the Altay.
Perhaps the still biggest weakness of the Turkish defense industry ecosystem is that it is still comparatively small from a financial and economic standpoint.
According to the SIPRI report, while international defense trade stood at $597 billion in 2022, the Turkish defense sales amounted to $5.5 billion — less than 1% of the global total. With such small funds, it becomes much harder to make headway in prestige projects such as fighter jets, tanks and heavy-tonnage combat ships and their sub-systems.
From Cyprus to F-35 expulsion
In the early days of the republic, the Turkish government and private entrepreneurs engaged in various projects to nativize arms production. But the technological leaps of World War II and Turkey’s alliance with the United States and NATO membership in the early Cold War years meant that Ankara found it more convenient to receive surplus US weapons or buy them on credit, without fully understanding how those items fit the country’s strategic outlook.
The breakthrough, however, came in 1974 when Turkey intervened into the Cyprus conflict after a coup by the Greek military junta. The subsequent US arms embargo on Turkey served as a wake-up call. All three state companies on the SIPRI list — Aselsan, Roketsan and TUSAS — were founded in those days to lessen Turkey’s reliance on the United States and other NATO allies.
At a time when Ankara once again finds itself sidelined by some of its Western allies, its salvation just might come from its indigenous and joint-venture projects. Turkey was first ousted from a consortium that produces new-generation F-35 fighter jets in 2019 over its purchase of Russian-made S-400 missile defense systems. Its bid to purchase $20 billion worth 40 F-16 fighter jets and nearly 50 modernization kits has been pending since 2021.
Until Washington kicked out Ankara from the F-35 program in 2019, TUSAS and its subsidiaries supplied critical parts for the US-led project. Undeterred by the F-35 debacle, TUSAS has designed and is testing the planned fifth-generation national fighter jet (MMU), nicknamed “KAAN,” which is scheduled to go into serial production in the late 2020s.
According to Kozan Erkan, autonomous air and naval platforms as well as KAAN will be Turkey’s crowning achievement.
“As holistic systems solutions expand, our unmanned aerial and unmanned surface vessels will become more competitive. KAAN-MMU represents the pinnacle of this process. The fifth-generation fighter jet involves a diverse set of sensors communicating with each other and presenting their conclusions to the pilot,” he tells Al-Monitor.
“Because very few countries in the world can produce fifth-generation fighter jets and share them with their allies while wielding the follow-up maintenance and spare parts like a Damocles’ sword, we can argue that Turkey will become a leading defense-industry exporter once it produces KAAN-MMU.”
Source : Al-Monitor