Turkish soldiers walk in a column in Cyprus on September 18, 1974. Cyprus marks a half-century of division this summer. AFP
Turkish soldiers walk in a column in Cyprus on September 18, 1974. Cyprus marks a half-century of division this summer. AFP
Turkish soldiers walk in a column in Cyprus on September 18, 1974. Cyprus marks a half-century of division this summer. AFP
Turkish soldiers walk in a column in Cyprus on September 18, 1974. Cyprus marks a half-century of division this summer. AFP


How Turkey’s defence industry has gone from strength to strength


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July 19, 2024

Fifty years ago this Saturday, Turkish forces entered northern Cyprus to head off an Athens-backed coup on the island. The US and a few of its western allies soon blocked arms sales to Turkey, seeking to curb Turkey’s actions.

The embargoes backfired over the long run, setting Ankara on a path to developing one of the world’s more robust defence industries. Unable to acquire the weapons and equipment needed to defend itself despite being a key Nato member, Turkey vowed to become self-sufficient and embraced domestic development.

The US lifted its ban in 1978, but Turkey’s efforts accelerated in the 1980s due to a military coup and insurgency from the Kurdistan Workers’ Party (PKK) in the country’s south-east. Domestic Turkish defence startups were encouraged to link up with foreign firms to gain know-how, financing and technology transfer.

In 1983, Ankara signed a deal with two American firms to co-produce US F-16 fighter jets in Turkey – an early major boost to Turkish prestige. The 1987 creation of the Turkish Armed Forces Foundation financed the development of the core of Turkey’s defence industry, Aselsan, Havelsan, Tusas, Aspilsan and Roketsan.

Turkey, which had been founded by a revered military leader, began to emerge as a defence and industrial manufacturer earlier than most other states on a similar development timeline. Despite a slowdown in the 1990s, thanks to new arms embargoes from Switzerland, Norway and Germany, and a partial US embargo, by the time the Justice and Development Party (AKP) came to power in 2002, Turkey was poised for a major leap.

Led by Recep Tayyip Erdogan, who is now President, the AKP called for an era of “indigenous solutions” and significantly increased research and development during a period of economic growth. From 2007 to 2017, Ankara’s R&D defence spending tripled to $1.2 billion.

Laser Guided Miniature Munition Bozok is displayed at the International Defence Industry Fair in Istanbul in August 2021. Getty
Laser Guided Miniature Munition Bozok is displayed at the International Defence Industry Fair in Istanbul in August 2021. Getty
Turkey’s defence exports have nearly tripled over the past decade, from $1.9 billion in 2014 to $5.5 billion last year

The results have been plain to see: the Altay main battle tank in 2008; the country’s first attack helicopter, the T129, in 2014; an array of new missiles, torpedoes and sensory equipment; the Barbaros frigate in 2018. The list goes on and on, with the biggest solution of all being the Bayraktar TB-2 drone, released by Baykar in 2011.

Turkey used the drone successfully against Kurdish militants in Syria and Iraq in 2018. The next year the TB-2 made an impact in Libya’s civil war. In 2020, Azerbaijan used it to defeat Armenian forces in Nagorno-Karabakh. In 2021, after signing a deal to produce TB-2s domestically, Ukraine’s military began using the drone against Russian forces.

Turkey’s top unmanned assault vehicle has since gained considerable international prestige, taking its defence industry along for the ride. The Bayraktar now has near-mythic status in Ukraine, where a police dog, a lemur in Kyiv, a crepe in Lviv and a catchy war song have been given its name. More than 30 countries have bought TB-2s, which has been praised by global heavyweights like political scientist Francis Fukuyama and called the “drone that changed the nature of warfare” by The New Yorker.

Yet Ankara has gone right on releasing new indigenous solutions. These include the country’s first amphibious assault ship and unmanned fighter jet, the Red Apple, a new wave of naval corvettes and frigates, and a series of higher-flying drones. In February, Turkey successfully tested its advanced fighter jet, the Kaan, joining the US, Russia and China as the only states to fly domestically designed 5th-generation aircraft.

Turkey has fallen a little short of its goal of total self-sufficiency, as most of its defence products, including the Kaan, have been based on foreign models or designed and produced with considerable foreign assistance. Top Turkish firms remain reliant on outside components and expertise, importing from Ukraine, South Korea, Russia, the US, the UK and beyond.

Yet Nato’s second-largest military now has the domestic backing to stand tall, with its defence industry accruing considerable respect at home and abroad. Turkey’s defence exports have nearly tripled over the past decade, from $1.9 billion in 2014 to $5.5 billion last year. The world’s 19th-largest economy now ranks just outside the top 10 global defence exporters, coming in at number 11.

Selcuk Bayraktar has become a domestic hero and is widely seen as a leading candidate to succeed Recep Tayyip Erdogan. Reuters
Selcuk Bayraktar has become a domestic hero and is widely seen as a leading candidate to succeed Recep Tayyip Erdogan. Reuters

Selcuk Bayraktar, creator of the TB-2 and the President’s son-in-law, has become a domestic hero and is widely seen as a leading candidate to succeed Mr Erdogan. It was a Bayraktar Akinci drone that found recently deceased Iranian president Ibrahim Raisi’s downed helicopter in the Iranian mountains in May, after which the drone operator proudly traced the shape of the Turkish flag. And despite Turkey’s close co-operation with non-western actors like Russia (the purchase of S-400 missile systems in 2019) and China (new plans for a $1 billion automotive plant), a robust and confident Turkish defence industry strengthens the western defence architecture.

That is not only because Turkey is a Nato member, but also because Turkish defence manufacturing developed largely within the western industrial defence ecosystem. Two cases in point: in March, with Ukraine facing battlefield shortages, the US turned to Turkey to boost ammunitions supplies; and just last month Turkey joined the Russia-facing, German-led European Sky Shield Initiative, prompting military observers to suggest Turkish missile defence platforms may soon be strengthening Europe’s defence infrastructure.

As for Cyprus, despite countless rounds of talks over the past half-century, the island remains tensely divided between the EU-member Republic of Cyprus and the Turkish Republic of Northern Cyprus (TRNC), recognised only by Ankara. As Turkish, Cypriot and Greek leaders gather on the island this weekend to mark 50 years since the division, some will surely express hope for a resolution in the years to come.

It's probably unwelcome news for southern Cypriots, but Turkey is undeniably better placed today than in 1974 to defend its interests and positions in Cyprus. This helps explain why Ankara has in recent years shifted away from the the island's probable resolution, reunification within a bizonal federation, and begun advocating for two separate states.

Whether or not it is a wise move, time will tell. But there's little question it can be traced back to the initial western response to Turkey’s arrival on the island.

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1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

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5.30pm Maiden (TB) Dh82,500 (Turf) 1,400m

Winner Spirit Of Light, Clement Lecoeuvre (jockey), Erwan Charpy (trainer)

6.05pm Maiden (TB) Dh82,500 (Dirt) 1,900m

Winner Bright Start, Pat Cosgrave, Saeed bin Suroor

6.40pm Handicap (TB) Dh92,500 (D) 2,000m

Winner Twelfthofneverland, Nathan Crosse, Satish Seemar

7.15pm Handicap (TB) Dh85,000 (T) 1,600m

Winner Imperial Empire, Tadhg O’Shea, Satish Seemar

7.50pm Handicap (TB) Dh92,500 (T) 2,000m

Winner Record Man, Tadhg O’Shea, Satish Seemar

8.25pm Handicap (TB) Dh92,500 (D) 1,600m

Winner Celtic Prince, Fabrice Veron, Rashed Bouresly

If you go...

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Power: 110 horsepower 

 

Torque: 147Nm 

 

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Results

2.15pm: Maiden (PA) Dh40,000 1,200m

Winner: Maqam, Fabrice Veron (jockey), Eric Lemartinel (trainer).

2.45pm: Maiden (PA) Dh40,000 1,200m

Winner: Mamia Al Reef, Szczepan Mazur, Ibrahim Al Hadhrami.

3.15pm: Handicap (PA) Dh40,000 2,000m

Winner: Jaahiz, Fabrice Veron, Eric Lemartinel.

3.45pm: Handicap (PA) Dh40,000 1,000m

Winner: Qanoon, Szczepan Mazur, Irfan Ellahi.

4.15pm: Sheikh Hamdan bin Rashid Cup Handicap (TB) Dh200,000 1,700m.

Winner: Philosopher, Tadhg O’Shea, Salem bin Ghadayer.

54.45pm: Handicap (PA) Dh40,000 1,700m

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2pm – Andreah

3pm – Supernovas

4.30pm – The Boxtones

5.30pm – Lighthouse Family

7pm – Step On DJs

8pm – Richard Ashcroft

9.30pm – Chris Wright

10pm – Fatboy Slim

11pm – Hollaphonic

 

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Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

The biog

Profession: Senior sports presenter and producer

Marital status: Single

Favourite book: Al Nabi by Jibran Khalil Jibran

Favourite food: Italian and Lebanese food

Favourite football player: Cristiano Ronaldo

Languages: Arabic, French, English, Portuguese and some Spanish

Website: www.liliane-tannoury.com

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Director: Hwang Dong-hyuk 

Stars:  Lee Jung-jae, Wi Ha-joon and Lee Byung-hun

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Infiniti QX80 specs

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War and the virus
Bundesliga fixtures

Saturday, May 16 (kick-offs UAE time)

Borussia Dortmund v Schalke (4.30pm) 

RB Leipzig v Freiburg (4.30pm) 

Hoffenheim v Hertha Berlin (4.30pm) 

Fortuna Dusseldorf v Paderborn  (4.30pm) 

Augsburg v Wolfsburg (4.30pm) 

Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)

Sunday, May 17

Cologne v Mainz (4.30pm),

Union Berlin v Bayern Munich (7pm)

Monday, May 18

Werder Bremen v Bayer Leverkusen (9.30pm)

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

The specs

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A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.

THE SPECS

Touareg Highline

Engine: 3.0-litre, V6

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Company%20profile
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Keane on …

Liverpool’s Uefa Champions League bid: “They’re great. With the attacking force they have, for me, they’re certainly one of the favourites. You look at the teams left in it - they’re capable of scoring against anybody at any given time. Defensively they’ve been good, so I don’t see any reason why they couldn’t go on and win it.”

Mohamed Salah’s debut campaign at Anfield: “Unbelievable. He’s been phenomenal. You can name the front three, but for him on a personal level, he’s been unreal. He’s been great to watch and hopefully he can continue now until the end of the season - which I’m sure he will, because he’s been in fine form. He’s been incredible this season.”

Zlatan Ibrahimovic’s instant impact at former club LA Galaxy: “Brilliant. It’s been a great start for him and for the club. They were crying out for another big name there. They were lacking that, for the prestige of LA Galaxy. And now they have one of the finest stars. I hope they can go win something this year.”

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Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

COMPANY PROFILE

Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed 

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The specs

Engine: 3.0-litre 6-cyl turbo

Power: 435hp at 5,900rpm

Torque: 520Nm at 1,800-5,500rpm

Transmission: 9-speed auto

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On sale: now

Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

Updated: July 19, 2024, 6:55 AM