TODAY.AZ / By Elmar Yusifli
The carpet, which is still deemed an essential textile product, has historically been of the utmost importance in all spheres of life of Turkic communities. The carpets dating back to the 5th and 6th centuries BC, discovered during the archaeological research carried out in the mid-20th century at the Pazyryk burials in the Altai Mountains, clearly attest to the aforementioned.
Products of carpet weaving, sericulture, cotton and other similar fields were of special significance in the trade of these countries, located on the historical Silk Road. Today, the trade relations can again be reflected in the division of labor and the need for high-quality raw materials in accordance with modern requirements within the historical Silk Road.
The textile industry, considered one of the most competitive industries in the world, currently figures prominently in the economies of the Turkic Council countries. The countries possessing the basic resources necessary for the development of this sector (high-quality raw materials and labor force, cheap energy resources, proximity to the targeted export markets, logistics infrastructure) promise a great potential for the future of the sector.
With its multi-century culture in terms of export and production of cotton, the main raw material of the textile industry, Turkey (sixth in the world with 988,000 tons), Uzbekistan (seventh in the world with 640,000 tons) and Turkmenistan (tenth in the world with 300,000 tons) are among the top ten exporters in the world.
General overview of the textile industry by country:
Uzbekistan, the historical cotton-growing region and the largest cotton producer in Soviet times, has reduced cotton exports in recent years, using it as a raw material for its own textile industry. The State intends to increase local production through various incentive programs for local and foreign entrepreneurs. Many textile enterprises have been established in the country with the participation of Turkic entrepreneurs. Uzbekistan, exporting about $1.2 billion worth of textiles in 2018, aims to increase this figure to $7 billion between 2019 and 2025 through a number of advertising projects.
The textile industry is the second most profitable sector in Turkmenistan after gas and oil exports. Since gaining independence until today, $2 billion has been invested in the textile sector, and a significant part of the country’s workforce has been involved in production. Turkmenistan is increasing its export potential not only at the expense of raw materials, but also at the expense of value added for raw materials.
The utmost importance is attached to the field of carpet weaving, which is considered a great heritage of the country, and the Turkmenkhali State Agency under the Ministry of Carpets of Turkmenistan has created a wide network for carpet weaving in all provinces of the country.
The country has also developed karakul sheep breeding, which is famous for its leather and wool. Various garments made of this type are very popular. The largest foreign investments in the textile industry of Turkmenistan are of Turkish origin. The country has textile enterprises (factories producing yarn, fabric, etc.), producing 100% eco-friendly products in accordance with the latest technologies.
The country’s textile products (including cotton) are exported to more than 100 countries, including the USA, Canada, Russia and the UK. The opening in 2018 of the Lapis Lazuli route between Azerbaijan and Turkmenistan, as well as other transport infrastructures, played a vital role in the faster delivery of Turkmen products to the Turkish and European markets and created new opportunities for the country by shortening the time and route for transporting products that are considered highly competitive in the textile industry.
In recent years, special attention has been paid to the development of the textile industry in Azerbaijan. Sericulture, cotton and other textile industries with rich historical traditions are being restored and developed in the country. For this purpose, the country has been increasing exports every year, focusing on foreign markets. In 2019, with 124 million dollars, the cotton fiber ranks 4th in non-oil exports of the country. Azerbaijan, along with aforementioned countries, meets the needs of the domestic market both in cotton and other products of textile industry, as well as in exports to Europe, Russia and other regions, according to the latest technologies.
The textile industry is more developed in the Republic of Turkey than in the aforementioned countries, and the said industry is deemed one of the locomotives of the country’s economy. This sector accounts for 17% of the country’s exports and ranks first in terms of employment. Although up to half of the main demand for raw material — cotton is met by domestic production, Turkey is the sixth largest importer of cotton in the world, with 700,000 tons per year (in 2019).
Turkish cotton is mainly imported from the USA (50%), Brazil (12%), Greece (9%), Turkmenistan (5%) and Azerbaijan (5%). The country also depends on foreign (mainly European) supplies of equipment and dyes used in fabric manufacturing. Unlike China, which began exporting to the EU market without quotas in 2007, Turkey chose the path of branding and adding value to products, rather than competing on price by lowering quality.
Benefits of regional integration for countries
With the demand and dictation of the global trade system, which is gradually shifting from globalization to regionalization, regional integration between the economic sectors of countries has become mandatory and an indispensable choice for many industries, including the textile industry.
Regional integration is an important strategy, especially to increase competitiveness. The main motives for regional integration are to diversify exports, increase sales and profits for producers, apply pricing policies appropriate to consumer groups, and increase the country’s GDP and employment.
The cotton plant, which is a strategic raw material for textiles, is a product of great economic importance in terms of added value and employment. In terms of processing, cotton is the raw material of the ginning industry, the textile industry with its fibers, food processing, oils and feed industry with its seeds, and the paper industry with its linters. The textile industry, in turn, interacts with agriculture and animal husbandry, petro chemistry, medicine, construction and automobile industry. Any development in the textile industry will also benefit these sectors in the short, medium and long term. If we look at the points that are important for the implementation of the regional integration between these countries, we will see the following:
Turkey, a very important player on the world market in this field, can also get some of the cotton it supplies from the United States and Brazil (62% of total imports) for domestic production from Uzbekistan or Turkmenistan. This could be an important step in building a cross-country supply chain. There is also a favorable transport infrastructure to provide the developed textile industry in Turkey with rich raw materials from Turkmenistan and Uzbekistan.
The use of existing routes between Azerbaijan and Turkmenistan in this regard has significantly increased the shipping speed. In case Uzbekistan and Turkmenistan, important cotton producers of the Turkic Council, also pursue some kind of preferential policy aimed at the export of cotton to Turkey, this process may contribute to the promotion of regional integration.
Plants and factories in Uzbekistan and Turkmenistan that have started functioning in recent years produce high-tech yarns and fabrics. These products, in turn, can serve as raw materials for Turkish brands.
Located at a strategic crossroads between Central Asia and Turkey, Azerbaijan can play a key role as a logistics depot. Baku International Sea Trade Port in Alat can be equipped with all necessary infrastructure (warehouse) networks for storage of raw materials and semi-finished textile products transported by sea from Uzbekistan and Turkmenistan to Turkey and Europe.
Another problem in this regard is that countries possessing rich raw material resources should pay attention to research aimed at textile technologies in order to withstand high competition for these products.
When we take a closer look at the experience of the advanced countries in the textile industry, which requires creativity in competition, we see that fashion events play a major role in the development of this sector. Taking this into account, Azerbaijan should pursue a policy of stimulating the development of fashion and design. The activities of fashion and design studios can also contribute to the acceleration of the sustainable role of youth in Turkic countries in the process of cultural integration. To this end, the annual fashion events, as well as exhibitions, conferences and forums in these countries, and the development of education in this field can play a significant role in terms of integration. This process will also contribute to the rapid integration of the region by enhancing the high level of cultural cooperation between these countries sharing historical and cultural ties.
When focusing on the main regional supply chains in the textile industry (Asia, the European Union and the American continent), it is noteworthy that there are no customs tariffs for industrial products. If the said countries regulate customs tariffs in this regard, they can be more successful in global competition by reducing the cost of production.
The textile industry, currently deemed one of the most competitive industries in the world, continues to figure prominently in the economies of the Turkic Council countries. The said countries possessing basic resources required for the development of this industry (high-quality raw materials and labor force, cheap energy resources, proximity to targeted export markets, logistics infrastructure) promise a great potential for the future of the sector. In case the aforementioned steps are taken in order to expand economic relations between the countries, this will inevitably lead to the acceleration of not only bilateral, but also interregional integration.