The example Türkiye sets illustrates that improving defense capacity while expanding economic strength does not have to primarily rely on imports. Instead, the systematic development of an armaments industry is paramount
- Türkiye's military expenditure for 2025 is set to reach record-levels in excess of $46 billion. This corresponds to a 17.5% increase from the $40 billion outlays in the 2024 budget
- Over the past decade, Türkiye's achievements have served as a success story. Its economy has benefited from the innovation ecosystem and start-up network generated by the defense industry
Over the course of the past decade, Türkiye has emerged as an international competitor in arms exports. Turkish arms exports [1] reached a new record of $7.1 billion in 2024. What is striking in this achievement is the fact that Türkiye's NATO partners are increasingly modernizing their defense capabilities with investments in Turkish companies, as recently illustrated by STM signing an agreement to construct two fleet replenishment ships for the Portuguese Navy.
NATO members Albania, Croatia, and Romania, meanwhile, have introduced Turkish drones into their military inventories.
Not only is Türkiye achieving rising export capacity and international recognition for its military-industrial complex, but Turkish companies are also investing in the defense sector abroad. The manufacturer Baykar, internationally known for the production and export of Bayraktar drones, announced in December 2024 the acquisition of the Italian company Piaggio Aerospace. [2]
- Defense reform of Türkiye
While Türkiye is making significant inroads in local production capacity and increasing export volumes, other countries are debating how to overcome bureaucratic barriers and expenditure obstacles within their own defense industries. Calls for the need to reform the contracting system in military procurement procedures are being articulated in the US [3] and across the EU [4]. Leading executives from the defense industry are urging the new US administration to consider lessons learned in other countries, including Türkiye. In Germany, vibrant discussions are taking place ahead of federal elections on Feb. 23 about the future financing volumes needed for the long-delayed modernization of its armed forces.
Addressing these challenges is all the more pertinent given the resurgence of war in Europe, multiple regional conflicts in the Middle East and Africa, and the expanding ascendency of China's military-industrial complex. Against this challenging backdrop, Türkiye's achievements during the past decade serve as a success story. Its economy has benefited from the innovation ecosystem and start-up network generated by the defense industry.
- Record-level budget
Improved local production capacity and, in reaction to far-reaching changes in the regional security architecture, Türkiye's military expenditure for 2025 [5] is set to reach record-levels in excess of $46 billion. This corresponds to a 17.5% increase from the $40 billion outlays in the 2024 budget. Higher military expenditure in Türkiye does not automatically imply higher debt-to-GDP ratios. In fact, the Turkish case illustrates the opposite. Despite rising defense and security expenditure in the past two years, government debt accounted for 25.6% of the country's nominal GDP in the third quarter of 2024.
Türkiye's example illustrates that improving defense capacity while expanding economic strength does not have to primarily rely on imports. Instead, the systematic development of an armaments industry is paramount. Through a combination of local innovation and targeted financial resources, the Turkish defense industry has systematically expanded its export markets. The inclusion of universities and Türkiye's start-up scene has generated research and innovation achievements that can be transferred to the military-industrial complex.
Policy challenges still endure. Instability in neighboring Syria, Iraq, and Iran has further influenced Türkiye's approach to its national security. A key parameter is modernizing its air defense capability. Türkiye continues to wait for the formal green light from all four members of the European consortium that manufacture the Eurofighter Typhoon jet. Berlin's delays in approving the sale have caused frustration within Ankara's defense community. Over the past two decades, different German governments have a history of imposing restrictions and sanctions on defense deals with Türkiye.
Such obstacles are a key driver for indigenous manufacturing capacity making further progress, as illustrated by the KAAN, Türkiye's first locally made fighter aircraft. But these achievements should not obscure the fact that Ankara also continues to have critical gaps in defense industry manufacturing. Türkiye lacks an indigenous microchip sector that is critical for local production in sophisticated military hard- and software.
[1] https://www.iiss.org/online-analysis/military-balance/2025/01/turkiyes-defence-industry-charts-a-course-for-european-growth/
[2] https://baykartech.com/en/press/baykar-set-to-become-the-new-owner-of-italian-aviation-giant-piaggio-aerospace/
[3] https://www.reuters.com/business/aerospace-defense/predator-drone-maker-asks-musks-doge-cut-pentagon-red-tape-letter-shows-2025-01-28/
[4] https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5827
[5] https://breakingdefense.com/2024/10/turkish-defense-spending-to-reach-record-high-amid-neighboring-conflicts/
*By Jens Bastian - The author was a fellow at the Centre for Applied Turkey Studies (CATS) of the Stiftung Wissenschaft und Politik (SWP) in Berlin.
