Is Istanbul replacing Dubai? 'Gold will rain'

Conflicts in the Middle East are opening new doors of opportunity in the gold and precious stone market. Mustafa Atayık, President of the Istanbul Chamber of Jewelers (İKO), stated that crises in the international market have increased Istanbul's appeal for investors seeking a safe haven, especially in a wartime environment. He said, "Turkey, and Istanbul in particular, could soon become an alternative to Dubai with its high potential and rich historical background in the sector. We could become a center of attraction for buyers seeking a safe haven due to the war."

In addition to fluctuations in global raw material and energy prices, the disruption of trade in Gulf countries is also shifting market balances. Atayık noted that if the wartime environment continues, many countries may turn to Turkey for their jewelry and gold supplies. Thanks to its geopolitical location and the neutral policies it pursues, Istanbul stands out in the face of developments in the Middle East and the Gulf. Recently, key industry representatives have also emphasized that there are increasing signals of trade shifting toward Turkey.

CAN ISTANBUL REPLACE DUBAI?

Dubai alone accounts for approximately 20 percent of global jewelry trade and has long been a key partner for the Turkish jewelry sector. However, transactions in the Dubai jewelry market have slowed due to rising geopolitical risks and transportation restrictions in the region. Atayık stated, "Beyond the reduction in flights, there are also problems reaching Dubai for trade. Even if the war ends soon, it may take a long time for a climate of trust to be established for investors in Dubai. If regulations concerning the sector are reviewed in a way that eases the industry, the developments in the Middle East could offer new opportunities for the Turkish jewelry sector. Turkey, and Istanbul in particular, could soon become an alternative to Dubai with its high potential and rich historical background in the sector. We could become a center of attraction for buyers seeking a safe haven due to the war."

Industry representatives state that Turkey could once again compete for leadership in the global jewelry market. However, they point to the need for regulations, particularly regarding gold imports and quota applications, to foster export growth. Manufacturing firms express that quota restrictions negatively impact both employment and domestic production. Atayık noted that despite the recent decline in raw gold imports, the increase in finished jewelry imports is raising questions within the sector.

GRAND BAZAAR IS AMONG THE SECTOR'S STRONG CANDIDATES

Turkey stands out as one of the most important jewelry hubs in its region, led by the Grand Bazaar, along with Kuyumcukent, Vizyon Park, and other major jewelry trade centers. Atayık points out that thanks to the Grand Bazaar, considered the world's first shopping mall, and other modern structures, Turkey has an advantage in international competition due to its human resources and experience in this field.

İKO President Mustafa Atayık also made significant statements regarding regulations and expectations for the future of the sector. "Due to the regulations on gold quotas in our country, there is a price difference in the ounce price compared to the world, which in some periods reaches 10,000 dollars per kilogram. This regulation makes exports difficult for jewelry, which is Turkey's most value-added export. Because of current practices, our sector, which just a few years ago accounted for 7-10 percent of global jewelry trade and was racing toward world leadership in exports, is unfortunately rapidly shedding its identity as an exporter and moving toward becoming an importing country."

The quota restrictions on gold have negatively impacted both our manufacturing companies' employment in the sector and our export items, which bring significant foreign currency into the country, have suffered during this process. Although the import of unprocessed gold appears to have decreased, the increase in finished jewelry imports has negatively affected domestic and national production, raising questions about the future of our sector."

Industry representatives who want to evaluate Turkey's potential emphasize the importance of establishing mechanisms that will facilitate international raw material supply.

NEW PROJECTS AND LEGAL REGULATIONS HAVE BROUGHT HOPE TO THE SECTOR

Work on the “Made in EU” project is also continuing in the jewelry sector. Atayık believes that this project will contribute to the Turkish jewelry sector becoming a strong production and trade center at the heart of Europe, the Middle East, and Asia. He underscores that integrating into the European Union production chain will increase marketing power and multiply cooperation opportunities between Turkish brands and European brands.

On the other hand, the recent removal of the 20 percent Special Consumption Tax (ÖTV) from the Omnibus Law by the Turkish Grand National Assembly (TBMM) was welcomed within the sector. It is stated that this decision has provided positive motivation to the more than 40,000 companies operating in the sector and to the Istanbul Jewelry Show process.

Finally, Atayık shared the following comment: “We believe that this project, which will ensure the development, market expansion, and quality certification of our sector companies, in addition to the advantages of our country becoming the center of the jewelry and goldsmithing sector at the heart of Europe, the Middle East, and Asia, is valuable. With the 'Made in EU' project, the Turkish jewelry sector will gain the advantage of being part of the 'EU Production Chain' within the EU market, the opportunity to be a 'Near-Production Center' for European brands, the advantage of increasing the 'Perception and Marketing power' of Turkish jewelry in the EU, and the advantage of joint production with European brands.”

News Source: 12punto