DAHİLDE İŞLEME REJİMİNDE KARŞILAŞILAN SORUNLAR VE ÇÖZÜM ÖNERİLERİ
INWARD PROCESSING REGIME: CHALLENGES AND PROPOSED SOLUTIONS

Summary/Abstract: The goal of this study is to identify the problems encountered in functioning Inward Processing Regime (IPR) and recommend solutions to these problems. The study was carried out with a quantitative research. In this context, businesses that are members of export unions and have Inward Processing Regime Certificate (IPRC) and Regulatory and Supervisory Bodies responsible for effective functioning of this regime were. It was concluded that the regime provided competitive power to companies in international markets and contributed significantly to increase in exports. It was also found out that the regime did not cause unfair competition against local manufacturers, exert pressure on current deficit, increase dependence on imports and reduce trade policy measures. On the other hand, several problems were detected in equivalent goods usage in the context of the regime. Continuous new regulations introduced within the scope of this regime constitute one other problem.Our country, that adopted export-based growth strategy as of 1980, resorts to several export incentive systems. IPR, one of these incentive systems, contributes significantly to total export of the country. Indeed, almost half of total export activity is carried out under this regime. However; in addition to its advantages, this system is currently criticized in several ways such as increasing dependence on imports and current deficit, causing unfair competition against local manufacturers, decreasing the importance of trade policy. It is apparent that problems encountered in functioning of this significant regime may not be neglected. Removal or clarification of this bilateral conflict related to the regime will help it work better. Therefore, our study is of great importance.We did not find a study on problems encountered in the context of IPR that constitutes the research question of this study. Therefore, based on only studies carried out within the scope of IPR, we involved studies that gave place to problems of IPR in our literature review. Survey questions used for the study were designed according to the problems found in literature. Moreover, regulatory bodies responsible for well-functioning the regime was asked about their opinions about several issues that might be perceived as a problem in the context of IPR.In this context, a survey was implemented to clarify both problems obtained in literature review and issues that were recognized as a problem by authorities. Survey form, the data collection tool of the study, was implemented in two separate institutions.Our study population comprises Turkish businesses that are member of export unions and have IPRC and regulatory and supervisory bodies that are responsible for well-functioning of the regime. We asked research questions to both companies and regulatory and supervisory institutions due to the likelihood that these institutions might have different opinions on the regime. It was not possible for us to reach the whole population during the study. Therefore, non-random convenience sampling pattern was selected. The study was not carried out with face-to-face interview method. Communication was predominantly via e-mail due to lack of time, cost factor and hardship of transport. 209 businesses with IPRC and 30 regulatory and supervisory institutions sent feedback. Five-Lichert scale was used as rating method in the surveys.IPR is supported more by businesses that use this regime than regulatory and supervisory institutions. It was also understood that the scale was reliable after calculating Cronbach Alpha coefficient to test reliability of attitude scale of these two institutions. It is understood from study result that IPR has positive impact on efficiency and productivity of companies. It might also be found that imported or domestic input is also used within the scope of export products. Our conclusions do not overlap with the Mali (2004) study. Still, it was found out that supporting relevant industries would rather be supported for domestic provision of imported goods. A similar finding to our study was given place in the study of Kocatepe et al (2013). Despite several problems we read in literature, we found out that the regime dis not cause unfair competition against local manufacturers and increase dependence on import and current deficit. Our conclusion on unfair competition is also different from the conclusions in the studies of Sayılgan and Şenol (2010) and Tekin (2017). Here, it is concluded again that the regime increases export activity and causes positive impact on employment. It was also concluded that IPR did not reduce the trade policy measures. Major problems encountered within the scope of this regime are as follows; it might be hard at post-production stage to understand whether equivalent goods allowed for substituting the imported goods have the same commercial qualities with the imported goods, waste rates of production input might be miscalculated, an ambiguity might occur on the meaning of the waste rate concept and continuous changes introduced in IPR functioning might cause uncertainty. We also reached no conclusion as to the existence of fraud acts as part of export activities within the scope of IPR. After all, it was understood that neither the businesses nor experts have adequate knowledge of IPR.To conclude, it was understood at the end of this study that several issues that were perceived as problems were not indeed a problem while several other problems were clarified. IPR would rather be used in periods of short supply for this system to be beneficial to national economy. If domestic production of imported products is possible, relevant industries must be supported to pave the way for domestic provision. One reason for companies exporting within the scope of IPR to prefer using imported input is that our domestic intermediate goods manufacturers are not capable of quality production. Therefore, our domestic intermediate goods manufacturers must resort to relevant methods for quality production. Questions revealed by this study must be dealt with by authorities and relevant measures must be taken. Each industry must be separately subjected to the survey of the study in order to identify the problems clearly.

• Details
• Contents