For more than a decade, Burak Pehlivan has been at the heart of the burgeoning Turkish business community in Ukraine. As the president of Turkish-Ukrainian Business Association TUID, he has been instrumental in the deepening of bilateral ties between the two Black Sea neighbors. Since the beginning of Russia’s full-scale invasion, Pehlivan has also become increasingly active internationally, promoting Ukrainian business opportunities in his native Türkiye and also as far afield as Japan and South Korea. Despite the many grave threats and challenges created by the ongoing war with Russia, he remains upbeat about Ukraine’s prospects amid growing trade with Türkiye and unprecedented international interest in the country.
When he sits down with Business Ukraine magazine in early December at the TUID offices in downtown Kyiv, Pehlivan is eager to share the latest encouraging trends in bilateral trade between Türkiye and Ukraine. According to figures for the period from January to November, 2023 is on track to become a record year in terms of trade volumes, he says. This would continue the positive trend witnessed in 2022, which was also a bumper year for bilateral business ties even amid the shocks and disruption of the wartime environment. According to Pehlivan, in the 21 months since the outbreak of hostilities in February 2022, Türkiye has cemented its position among Ukraine’s most important economic partners, becoming one of the country’s top three suppliers of imports and a key market for Ukrainian exports.
Overcoming the obstacles created by the Russian invasion has involved a significant degree of ingenuity and adaptation, Pehlivan explains. Businesses have navigated around the blockade of Ukraine’s major Black Sea ports via a variety of solutions including rerouting cargoes to the Danube river ports on Ukraine’s southwestern border with Romania, using the land corridor via Moldova, and in some cases even turning to ports on the Baltic Sea. “Trade flows are like electrical currents, they always find a way. It might be longer, less convenient, or more expensive, but international trade will always discover new ways of getting through,” he comments.
While Pehlivan is well aware of the scale of the wartime damage done to the Ukrainian economy, he says most of the approximately two hundred companies that form the TUID community remain active in Ukraine, and notes that the chamber has actually welcomed a number of new members since February 2022. Pehlivan believes the resilience of the past two years reflects the long-term outlook and commitment of the Turkish business community in Ukraine. “We have already been through the 2008 financial crisis, the 2014 revolution, the first Russian invasion, the pandemic, and now a second Russian invasion,” he notes. “Despite all these obstacles, we continue to see very healthy trade and strong growth trends. Nothing can disrupt this positive trajectory, which is rooted in the simple fact that Turkish-Ukrainian economic relations are very complementary and are therefore evolving organically.”
The expanding trade between these two Black Sea nations is all the more remarkable given the continued absence of a Free Trade Agreement. Following years of negotiations, the presidents of Türkiye and Ukraine signed a Free Trade Agreement in February 2022, just weeks before the outbreak of hostilities. However, due to the deteriorating security situation, the landmark FTA has yet to ratified by either parliament. Pehlivan predicts that after this takes place, annual trade will jump further. “Can you imagine what we can achieve once the Free Trade Agreement is ratified? I think we will we then be able to exceed USD 10 billion in annual trade turnover.”
In addition to bilateral trade, Turkish businesses also occupy prominent positions throughout the Ukrainian economy and have continued to invest in the country at a time when many other international companies have adopted a more cautious approach or temporarily withdrawn from the Ukrainian market altogether. “Türkiye is the number one investor in wartime Ukraine,” says Pehlivan. “The Turkish business community in Ukraine is extremely diverse. There is almost no sector of the Ukrainian business environment without a Turkish presence, and many are market leaders in their respective spheres.”
One of the key focuses of the Turkish business community in Ukraine is the construction industry. For more than a decade, Turkish construction companies have been involved in many of Ukraine’s largest and most important building projects. This portfolio includes everything from the new terminal building at Kyiv’s Boryspil International Airport to five-star hotels, football stadiums, shopping centers, bridges, thousands of kilometers of highways, and hundreds of residential buildings.
Pehlivan says Turkish companies are “by far the biggest international players in Ukrainian building industry.” He argues that this strong track record means Turkish businesses are now well-placed to play a major role in the envisioned reconstruction of Ukraine. He is also adamant that these efforts must not wait until after a final peace agreement is reached. “Our position is clear: work on the recovery of Ukraine should begin now. We cannot afford to sit and wait until after the war is over. We need to keep the economy moving and demonstrate to domestic and international audiences that Ukraine is already moving forward.”
As an example of effective reconstruction efforts, Pehlivan cites approvingly the recent pilot project to repair a number of Kyiv region bridges damaged during the spring 2022 Battle of Kyiv. This initiative was funded by the British government’s export credit agency UK Export Finance, with rebuilding work carried out by Turkish construction companies. He argues that this experience can serve as a model for further reconstruction efforts, and believes Ukraine could benefit from exploring Türkiye’s extensive experience of public-private partnerships as a tool for financing major infrastructure projects. “We need to be more creative in our approach,” he says. “Ukraine has not fully taken advantage of all available foreign financing and other cooperation opportunities. I think it would make sense to explore potential synergies among Ukraine’s international partners to see who can provide financing, experience, and technological know how.”
Pehlivan has been actively engaged in the process of building international coalitions for Ukraine’s recovery. Highlights since February 2022 have included co-hosting the first international business forum in wartime Ukraine, which took place in Lviv in September 2022, and organizing an unprecedented Turkish-Ukrainian-Japanese Business Forum in Istanbul in September 2023. This three-way event reflected Japanese public and private sector interest in cooperating with Turkish partners to advance Japan’s strategic plans in Ukraine. Pehlivan explains that similar partnerships have proven fruitful in other regions where the Turkish business community has established a strong presence, making cooperation in Ukraine a natural next step.
In addition to Japan, Pehlivan has also been engaging intensively with representatives from South Korea over similar partnership to facilitate investments in Ukraine. He sees deepening cooperation with these two Asian economic powerhouses as a potential game-changer for Ukraine, and is confident Turkish expertise and experience can help realize the ambitious investment agendas currently being developed in Seoul and Tokyo.
While the war in Ukraine is still far from over, Pehlivan offers a compelling vision of the country’s future direction. He argues that when people talk about reconstruction, it is crucial to recognize that the objective should not be to simply rebuild the extensive damage caused by the invasion. Instead, the goal must be to create a new Ukraine. “We need to understand that Ukraine’s entire infrastructure should be both updated and upgraded. With the right infrastructure in place, Ukraine will be a far stronger country with a much more competitive economy. Crucially, this will also lay the foundations necessary to attract future international investment.”
Based on his own experience at various investment events and conferences over the past two years, Pehlivan is sure sufficient international interest exists to drive Ukraine’s economy to a new level, as long as the right conditions are put in place. He says business representatives and state officials from France, Austria, the United States, and a host of other countries have all approached him to explore how they might be able to partner with Türkiye in Ukraine and harness the experience of the Turkish business community. “They all understand the role of Türkiye in Ukraine and the benefits partnership can bring,” he says.
With international interest in Ukraine currently higher than at any time in the country’s thirty two years of independence, Pehlivan is confident Ukrainians will witness major development in the coming years. He also offers a word of caution for newcomers. “As partners we need to understand that Ukraine cannot change in one day. The country is undergoing an historic transformation, but this will take time.” It is impossible to anticipate exactly what kind of Ukraine will emerge from the upheavals and destruction of the current war, but it seems safe to assume Turkish businesses will continue to play an important role in the country’s economic evolution for many years to come.