Por: Revista Summa
El Salvador recently announced an ambitious plan to become a regional logistics hub for goods in Central America, with an investment of more than US$1.6 billion to modernize two Pacific ports. According to President Nayib Bukele, this is “the largest private investment ever made in El Salvador.” Contrary to what has been happening elsewhere in the region, the project will not be financed by China—who already operates about 40 ports in Latin America and the Caribbean—but by a more unexpected country: Turkey.
The Turkish company Yilport, part of Yildirim Holding, will invest in the ports of Acajutla and La Unión and operate them for the next 50 years.
In reality, the agreement should not come as a surprise. The relationship between Turkey and Latin America has grown exponentially over the past two decades, since the rise to power of Turkish leader Recep Tayyip Erdoğan. Bilateral trade increased fourteenfold, from US$950 million in 2002 to US$13.9 billion in 2023, according to Turkey’s Ministry of Foreign Affairs. And today, the exchange continues to grow: official figures show that trade volume rose 29.8% year-on-year in June 2024.
Sixty-two percent of that exchange consists of imports entering Turkey from the region, according to the Turkish Statistical Institute (TUIK). The remaining 38% are Turkish exports.
Turkish Companies
The growing commercial presence of Turkey in Latin America and the Caribbean can also be seen in the number of Turkish companies operating in the region.
Until nearly the end of the 20th century, there were no Turkish companies in this part of the world.
Only at the end of the 1990s did the first one arrive: Kordsa—a manufacturer of rubber, ropes, and nylon, and a subsidiary of Sabanci Holding—which established a production plant in Buenos Aires, Argentina.
Today, there are more than 20 Turkish companies in the region, primarily in the automotive, mining, and transportation sectors, according to a 2023 report by the Institute of International Relations at the National University of La Plata in Argentina.
Yildirim Holding, which will begin operating in El Salvador through its subsidiary Yilport, is “the largest Turkish investor in the region,” according to Ata.
Yildirim also has a major coal project in Colombia.
Meanwhile, another Turkish company, Global Ports Holding, operates five ports in the Caribbean.
Hazelnut producer Balsu Gida announced in January the construction of a plant in Maule, Chile, and the floating-energy giant Karpowership signed a collaboration agreement last May with Brazil’s state-owned oil company Petrobras.
Kordsa, which ceased operations in Argentina in 2014, continues operating in Brazil, where it has been recognized as one of the country’s best employers.
Ata notes that “an important factor in strengthening ties” between Turkey and Latin America has been the presence of the national airline, Turkish Airlines, which today offers direct flights to Mexico, Brazil, Cuba, Colombia, Panama, and Venezuela — and is expected to launch a direct flight to Chile in December 2024.
International Relations
Ata explains that business relations between both sides have been strengthened by an expanding “commercial diplomacy.” Turkey’s Foreign Economic Relations Board (DEIK) has 11 national business councils and one regional business council in Latin America.
But it’s not only commercial relations that have grown. Turkey’s diplomatic presence in Central America, South America, and the Caribbean has also increased significantly.
While at the beginning of the century Ankara had six diplomatic missions in the region, that number has tripled.
In addition to embassies in 18 capitals, Turkey also has a consulate general in São Paulo, Brazil.
Ata also notes that 17 Latin American and Caribbean countries have embassies in Turkey: Argentina, Brazil, Ecuador, El Salvador, the Dominican Republic, Guatemala, Costa Rica, Colombia, Cuba, Mexico, Panama, Paraguay, Peru, Chile, Uruguay, Nicaragua, and Venezuela.
Turkey’s relationship with the latter is particularly close: Erdoğan traveled to Caracas in December 2018 to support Nicolás Maduro after several countries, led by Washington, rejected his reelection for a second term due to fraud allegations by the opposition.
And in August last year, he was one of the few leaders to call the Venezuelan president after he claimed another electoral victory, despite questioning by the majority of Latin American countries and the West.
A Beneficial Relationship
According to the expert, the growing relationship between Ankara and the region has been encouraged by both sides.
“The search for a multipolar world and efforts to diversify partners are becoming increasingly important for Latin American governments [as well as for Turkey],” she says.
“Since the 1970s, Latin America has been opposing and expressing reservations about the way the global economic and political order works, and in the 21st century it continues to adopt a reserved and critical attitude toward Western governments and the regimes and international organizations they support,” says Akarçay, adding:
“Priorities such as adopting an autonomous foreign policy stance, seeking partners outside the region, deepening cooperation within the Global South, calling for a fairer and more symmetric global distribution of power, and incorporating diverse actors into foreign policy decision-making have been rising trends in Latin America.”
“Beyond being a large market for Latin American producers, Turkey’s broad connections — spanning from the Middle East to Europe and the former Soviet republics — also enhance its importance from the perspective of Latin America,” she concludes.
Giant Markets
However, the relationship is beneficial for both sides.
In an article published this year on the Spanish-language site of the Turkish state media outlet TRT, Latin American Studies expert Melike Hocaoglu highlighted that Turkey “offers access not only to its sizable domestic market of 80 million people.”
It is also a gateway to a regional market of 1.3 billion inhabitants and a market potential of US$28 trillion, just a few hours by plane from “Europe, the Middle East, North Africa, or Central Asia.”
Meanwhile, “with a combined GDP of approximately US$5.5 trillion and a population exceeding 700 million people,” the 33 countries of Latin America and the Caribbean have “significant economic relevance due to their rich natural resources, strategic trade relationships, and growth potential,” Hocaoglu stated.
“Latin America can meet Turkey’s demand for raw materials, and in turn benefits from Turkey’s export of industrial and technological products,” she emphasized.
The Future
Ata acknowledges that the relationship between two geographically distant regions comes with challenges, citing “cultural differences, language barriers, time zone differences, long distances, effective communication between businesspeople, and differences in business practices between Turkey and Latin American countries” as potential obstacles.
She also mentions “political or economic uncertainties” and “changes in local legislation and regulations” in some countries.
Even so, she remains confident that the relationship will continue to grow.
“There are opportunities for bilateral cooperation in sectors such as energy, renewable energy, tourism, health, mining, agriculture, defense, and digitalization,” the Turkish official observes.
“Policies for the region are designed not only to increase trade volume but also to deepen areas such as technology transfer, information exchange, and capacity building.”
“Our overall market share with the countries of Latin America and the Caribbean is still not at the desired level. Our market share has the potential to grow even further in the coming years,” she predicts.
