Leadership and Democracy LabWestern Social Science

Terrorism in Turkey and the Political Risks for the Textile Industry

28/10/2016

Primary Article Contributor: Mark Farfan

Team Leader: Ernest Tam

 There has been a recent spate of terrorist activity in Turkey that may present direct or indirect risks to the stability of the textile industry in the country. These potential risks are applicable to both foreign and domestic textile businesses. The likelihood of a direct threat from terrorism to the textile industry is low, judging from observable patterns in past terrorist activity in Turkey. The likelihood of indirect risk, however, is moderate to high due to the potential for widespread economic repercussions from terror attacks.

As it currently stands, many nations have published official advisory statements for travel to Turkey, including Canada, the United Kingdom, and the United States. These advisories follow in the wake of several deadly attacks that have been carried out in recent months and years. On February 17th, a car bomb was set off during rush hour at a busy intersection in Ankara, resulting in 28 dead and 61 injured. On June 28th, suicide bombers representing the Islamic State detonated bombs at Istanbul’s airport, killing 40 and wounding over 140 others. On August 20th, a wedding in Gaziantep was targeted by a suicide bomber, leading to the deaths of over 50 people, many of who were children. There have been 37 separate terrorist attacks in 2016 alone. Between Kurdish rebels, ISIS militants, and extremist leftists, there are many possible perpetrators of these acts of violence. Moreover, the frequency of attacks in Turkey has been trending upwards in 2015 and 2016 from levels experienced in the past two decades. The conflict in Syria, the rise of ISIS, a Kurdish insurgency, and geopolitical tensions in the region signal that this trend is likely to continue for the foreseeable future.

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Geographic location within Turkey may play a role in the terror threat level. Two factors come into play: 1) proximity to the Syrian and Iraqi borders; and 2) being located in a major metropolitan area. There is a much higher concentration and frequency of attacks in the regions of Turkey directly adjacent to Iraq and Syria due to relatively porous borders with those conflict-ridden nations. Moreover, attacks that have taken place in the Northern regions of Turkey are largely focused on major metropolitan areas where large numbers of civilians can be targeted, such as in Ankara and Istanbul. This information should be taken into consideration when assessing the risk for a particular organization in Turkey.

The risks from terrorist activity to the textile industry in particular should not be understated. As of yet there have been no direct terrorist attacks targeting textile businesses in Turkey. Terrorist activity in the country has tended to be focused on densely populated public areas with high concentrations of civilians. As such, the risk of a direct attack by one of the aforementioned groups on a private textile facility does not seem to be high. It is not out of the question, however.

 In Bangladesh, for example, there was a recent attack on a facility owned by garment producer Uniqlo. The incident killed 20, most of whom were foreign nationals. ISIS militants carried out the attack in Bangladesh, one of the same groups that operate in Turkey. Consequently, there is at least the possibility of a similar attack occurring at a Turkish textile facility. Furthermore, ISIS militants have shown a penchant for attacking foreigners, and particularly Westerners, when possible. Risks could therefore increase for a textile business that employs a significant number of foreign workers. The greatest risk of a direct threat to textile business in Turkey is that civilians who are employed in the industry could be among those targeted in terrorist attacks. Organizations within Turkey, especially those with foreign employees, should be wary of the possibility of a direct attack while also understanding that the probability of such an event occurring is at a low-risk level.

 On the other hand, indirect risks from terrorism to Turkey’s textile industry are much more significant. Terrorism fears may have a ripple effect throughout the entire Turkish economy, hurting tertiary industries such as hotels and resorts and, by extension, hurting primary and secondary industries that provide materials to those businesses. Moreover, there is an increasing hesitancy by foreign companies (mainly Western) to do business in areas that are seen to be vulnerable to ISIS or other terrorist activities. If foreign investors are unwilling to travel to Turkey to make business connections, to set up supply chains, and to sign textile export agreements, there will be a significant impact on the industry. For example, the managing director of one Turkish textile company noted that several of his clients had recently cancelled business trips due to terrorism fears. Other leaders in the industry have cited layoffs, declines in sales, and tightening profit margins as a result of the presence of ISIS in Iraq and Syria. Many Turkish textile businesses also work with Iraqi businesses, compounding the issue in those cases.

 Terrorism will continue to pose a threat to order and stability in Turkey for the immediate future. It is unlikely that any single business or coalition of textile companies will be able to prevent these attacks from occurring. There are, however, strategies that can be implemented to reduce the potential impacts of an attack. First, textile businesses in the country should be aware of the location and intended targets of terrorist attacks in relation to themselves. This is important in order to assess whether additional security protocols are necessary or even if evacuations are in order under extreme circumstances. Whether resources should be devoted towards a tighter security network will depend on an organization’s ability to pay for such services as well as on their proximity to the higher-risk areas in the country. Second, efforts should be made to inform international clients of the realities on the ground and assurances should be made for continuity of service. The fear of further terrorism is what drives the potential for indirect economic repercussions, regardless of whether those fears are founded or not. Any business can mitigate the risk of losing clients or delaying business deals after terrorist attacks by immediately contacting clients to inform them if and how they will be affected. Strategies could also be implemented to conduct business meetings via web conference in order to further assuage fears. These actions will mitigate the greatest risk for harm to textile businesses, which is the potential indirect economic fallout from terrorist activities.