Trade drives active Turkish foreign policy

I realize many observers of Turkey’s active and diversified foreign policy in recent years are missing the mark when they allow themselves to get caught up in the details of public statements coming out of Ankara, especially the rhetorical speeches by outspoken Prime Minister Recep Tayyip Erdoğan, who these days is enjoying playing with Israel and using them as a “punching bag” to make his case on other issues, which may have misled some analysts to misinterpret Turkey’s real intentions in the region.

If you strip away the rhetoric you will see that Turkey, first and foremost, has been trying to establish itself as a “trading power” rather than seeking enhanced “political clout” in the region, although neither are exclusive of each other and are admittedly closely interlinked. The tactical deployment of national assets and the mobilization of Turkish resources of all kinds ultimately aim for the dominance of Turkish goods first in regional markets and then flood into global markets.

Where does this ambition come from? Well, it comes from the changing dynamics in Turkish society, which has been going on for some time in a fundamental way. Turkey is no longer an agricultural country and most of its population lives in urban centers rather than in outlying rural areas. Its economy is overwhelmingly based on manufacturing, with the service and IT sectors growing rapidly.

Unlike in the past when the trade hub was only concentrated in a few cities, today it is claimed by many industrial cities scattered throughout the Anatolian landscape. Many entrepreneurs in the heartland of the country have successfully turned their medium-sized companies into big conglomerates trading on the stock exchange and looking for export opportunities. As such, the Turkish government is under immense pressure from trade associations to expand Turkish influence in regional markets and seek new ones.

It would not matter whether the current Justice and Development Party (AK Party), which is a mixture of a liberal and conservative coalition representing different colors in Turkish society, remains in power or if some other party replaces it.

The underlying strong currents for businesses to expand market share will remain a powerful force to push successive governments to employ this very pragmatic and utilitarian approach in its economic policies.

Otherwise how would we explain the Turkish prime minister’s recent Arab Spring tour, during which he took over 200 businessmen with him on a visit to Egypt, itself a market of 80 million people and a gateway to an even greater North African market? Even in a primarily humanitarian visit to famine and drought-stricken Somalia, Erdoğan took the heads of major trade advocacy groups with him to plant the seeds for future economic gains. It was not publicized much but during the trip, Turkish Foreign Minister Ahmet Davutoğlu discretely departed from the Somalia leg of his boss’s visit to drop by South Africa, a G-20 member, to make the sales pitch in this major power on the southern tip of the African continent.

Turkey is positioning itself carefully in the face of the Arab Spring to make the best in the post-revolution era from a business perspective. It realized that the current authoritarian regimes are no longer sustainable in the Arab world and the strong demands for democracy, rule of law and fundamental human rights will eventually crush the existing regimes, some of which are still in denial. Turkey understands it may lose some or all of its trade with regimes like Syria but bets on the big win in the medium and longer run. The turnaround with Iraq in offsetting losses in trade during the Gulf wars taught a valuable lesson to policy makers in the Turkish establishment as Turkish goods flooded markets in post-Saddam Iraq.

We saw a similar scenario played out in Egypt when Erdoğan slammed Hosni Mubarak and called for his early departure from power. It was a risky position to take, considering that many Turkish businesses operate in Egypt, but it paid off greatly when Mubarak was overthrown and Turks benefited from dividends offered by state contracts by the transitional regime. His visit to Libya while the National Transitional Council was still fighting with the last remnants of autocratic leader Gaddafi was meant help recoup losses amounting to some $25 billion incurred by Turkish contractors during the war, as well as attempting to secure a bigger slice of the post-Gaddafi-era pie.

Turkey’s relations with Iran and Russia, both of which are major exporters of energy to Turkey, should be seen from this perspective as well. Ankara may have differences on a number of issues with these two countries, but it still carefully pursues a policy that will not jeopardize trade ties that are significantly important to the constituency of the governing AK Party. Erdoğan knows very well that if its government loses big in trade or fails to secure access to new markets for Turkish businesses that are eager to sell their products, he will have a hard time clinging to power.

Davutoğlu’s shuttle diplomacy in the Balkans at a time when both the EU and the US seem to have disengaged is another manifestation of Turkish trade diplomacy. Ankara wants to make sure the Balkans are stabilized so as to ensure that Turkish goods and businesses will continue to flow in these markets. For this Turkey is willing to pressure Bosnian Muslims and help lift Serbia from the isolation, condemnation and bitter war memories of the 1990s. A similar liberal market-oriented approach was evidenced in the Caucasus when the AK Party government immediately backed down from rapprochement with Armenia after realizing the potential losses most likely to be incurred by the wrath of Azerbaijan, a major natural gas supplier to Turkey.

Even with Israel, behind all this buzz and fuss, trade was pretty much protected. It continues to flourish despite a diplomatic rift between the two countries over the killing of nine Turks by Israeli commandos on an aid ship bound for Gaza. Turkey bought $1.3 billion worth of Israeli goods in the first eight months of this year, which was 40 percent higher than the preceding year. Turkish businesses continued to sell automobiles, metals and machinery to Israeli clients worth around $1.4 billion, marking a 20 percent increase in the first seven months on a year-on-year basis.

We have to remember that in the last election manifesto, Erdoğan set the target of an export volume of $500 billon by 2023, when the centennial of the establishment of the Turkish Republic will be celebrated. Considering that exports are expected to hit an all-time record by reaching the $130 billion mark by the end of 2011, it is still along way to go from this figure to $500 billion in 12 years. That is why the driving force behind Turkish foreign policy is and will remain to be trade and business interests.

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