{"id":20675,"date":"2010-07-13T03:55:11","date_gmt":"2010-07-13T01:55:11","guid":{"rendered":"http:\/\/www.turkishforum.com.tr\/en\/content\/?p=20675"},"modified":"2023-04-05T10:50:18","modified_gmt":"2023-04-05T07:50:18","slug":"turkey-looks-east-too-as-economic-power-explodes","status":"publish","type":"post","link":"https:\/\/www.turkishnews.com\/en\/content\/2010\/07\/13\/turkey-looks-east-too-as-economic-power-explodes\/","title":{"rendered":"Turkey Looks East, Too, As Economic Power Explodes"},"content":{"rendered":"

For decades, Turkey has been told it was not ready to join the European Union \u2014 <\/strong>that it was too backward economically to qualify for membership in the now 27-nation club.<\/strong><\/p>\n

That argument may no longer hold.<\/strong><\/p>\n

Today, Turkey is a fast-rising economic power, <\/em><\/strong>with a core of internationally competitive companies turning the youthful nation into an entrepreneurial hub, <\/em><\/strong>tapping cash-rich export markets in Russia and the Middle East <\/em><\/strong>while attracting billions of investment dollars in return.<\/em><\/strong><\/p>\n

For many in aging and\u00a0debt<\/span>-weary Europe, <\/strong>which will be lucky to eke out a little more than 1 percent growth this year, <\/strong>Turkey\u2019s economic renaissance \u2014 <\/strong>last week it reported a stunning 11.4 percent expansion for the first quarter, second only to\u00a0China<\/span>\u2014 <\/strong>poses a completely new question: <\/strong>who needs the other one more \u2014 Europe or Turkey?<\/span><\/strong><\/p>\n

\u201cThe old powers are losing power, both economically and intellectually,\u201d<\/strong> said Vural Ak, 42, the founder and chief executive of Intercity, the largest car leasing company in Turkey.<\/p>\n

\u201cAnd Turkey is now strong enough to stand by itself.\u201d<\/strong><\/p>\n

It is an astonishing transformation for an economy that, just 10 years ago, <\/strong>had a budget deficit of 16 percent of gross domestic product and inflation of 72 percent.<\/strong><\/p>\n

It is one that lies at the root of the rise to power of Prime Minister Recep Tayyip Erdogan, <\/em><\/strong>who has combined social conservatism with fiscally cautious economic policies <\/em><\/strong>to make his Justice and Development Party, or A.K.P., <\/em><\/strong>the most dominant political movement in Turkey since the early days of the republic.<\/em><\/strong><\/p>\n

So complete has this evolution been that\u00a0Turkey is now closer to fulfilling the criteria for adopting the euro \u2014 <\/strong>if it ever does get into the European Union \u2014 <\/strong>than most of the troubled economies already in the euro zone<\/strong>.<\/p>\n

It is well under the 60 percent ceiling on government debt at 49 percent of G.D.P., <\/em><\/strong>and could well get its annual budget deficit below the 3 percent benchmark next year.<\/em><\/strong><\/p>\n

That leaves the reduction of inflation, now running at 8 percent, as the only remaining major policy goal.<\/em><\/strong><\/p>\n

\u201cThis is a dream world,\u201d said Husnu M. Ozyegin, who became the richest man in Turkey <\/strong>when he sold his bank, Finansbank, to the National Bank of Greece in 2006.<\/strong><\/p>\n

Sitting on the rooftop of his five-star Swiss\u00a0Hotel<\/span>, he was looking at his BlackBerry,\u00a0scrolling down the most recent credit-default spreads for euro zone countries.<\/p>\n

He still could not quite believe what he was seeing.<\/p>\n

\u201cGreece, 980. <\/strong>Italy<\/strong><\/span>, 194 and here is Turkey at 192,\u201d<\/strong> he said with a grunt of satisfaction.<\/p>\n

\u201cIf you had told me 10 years ago that Turkey\u2019s financial risk would equal that of Italy I would have said you were crazy.\u201d<\/strong><\/p>\n

Having sold at the top to Greece,\u00a0Mr. Ozyegin is now putting his money to work in the east.<\/strong><\/p>\n

His new bank, Eurocredit, gets\u00a035 percent of its profit<\/em> from its Russian operations.<\/strong><\/p>\n

Mr. Ozyegin represents the old guard of Turkey\u2019s business elite <\/strong>that has embraced the Erdogan government for its economic successes.<\/strong><\/p>\n

Less well known but just as important to Turkey\u2019s future development\u00a0has been\u00a0the rapid rise of socially conservative business leaders <\/strong>who, under the A.K.P., have seen their businesses thrive <\/strong>by tapping Turkey\u2019s flourishing consumer and export markets.<\/strong><\/p>\n

Mr. Ak, the car leasing executive, exemplifies this new business elite of entrepreneurs.<\/p>\n

He drives a Ferrari to work, but he is also a practicing Muslim who does not drink and has no qualms in talking about his faith.<\/p>\n

He is not bound to the 20th-century secular consensus among the business, military and judicial elite\u00a0that fought long and hard to keep Islam removed from public life.<\/p>\n

On the wall behind his desk is a framed passage in Arabic from the Koran,\u00a0and he recently financed an Islamic studies\u00a0program<\/span> just outside Washington at George Mason University in Fairfax, Va.,\u00a0where Mr. Erdogan recently spoke,\u00a0according to this fascinating article in the New York Times<\/span>.<\/p>\n

Whether he is embracing Islam as a set of principles to govern his life <\/strong>or\u00a0Israeli irrigation technology<\/em> for his sideline almond and walnut growing business, <\/strong>Mr. Ak represents the flexible dynamism \u2014 both social and economic \u2014 <\/strong>that has allowed\u00a0Turkey to expand the commercial ties <\/em><\/strong>with Israel, Russia,\u00a0Saudi\u00a0Arabia<\/span>, Iran and Syria <\/em><\/strong>that now underpin its ambition to become the dominant political actor in the region.<\/span><\/strong><\/p>\n

Other prominent members of this newer group of business executives are Mustafa Latif Topbas,\u00a0the chairman and a founder of the discount-shopping chain BIM,\u00a0the country\u2019s fastest-growing retail chain,\u00a0and Murat Ulker, who runs the chocolate and cookie manufacturer Yildiz Holding.<\/p>\n

With around $11 billion in sales, Yildiz Holding supplies its branded food products <\/strong>not just to the Turkish market but to 110 markets globally.<\/strong><\/p>\n

It has set up factories in Kazakhstan, Pakistan, Saudi Arabia and\u00a0Ukraine<\/span> and now owns the Godiva brand.<\/strong><\/p>\n

The two billionaires have deep ties to the prime minister \u2014\u00a0Mr. Erdogan once owned a company that distributed Ulker-branded products, and Mr. Topbas is a close adviser \u2014\u00a0but\u00a0the\u00a0trade<\/span> opportunities in this part of the world are plentiful enough <\/strong>that a boost from the government is now no longer needed.<\/strong><\/p>\n

In June, Turkish exports grew by 13 percent compared with the previous year, <\/em><\/strong>with much of the demand coming from countries on Turkey\u2019s border or close to it, like Iraq, Iran and Russia.<\/em><\/strong><\/p>\n

With their immature manufacturing bases, they are eager buyers <\/em><\/strong>of Turkish cookies, automobiles and flat-screen televisions.<\/em><\/strong><\/p>\n

This year, for example, the country\u2019s flagship carrier, Turkish\u00a0Airlines<\/span>, will fly to as many cities in Iraq (three) as it does to France.<\/p>\n

Some of its fastest growing routes are to Libya, Syria and Russia,<\/p>\n

Turkey\u2019s largest trading partner, where it flies to seven cities.<\/p>\n

That is second only to\u00a0Germany<\/span>, which has a large population of immigrant Turks.<\/p>\n

In Iran, Turkish companies are building fertilizer plants, making diapers and female sanitary products.<\/p>\n

In Iraq, the Acarsan Group, based in the southeastern town of Gaziantep, just won a bid to build five hospitals.<\/p>\n

And\u00a0Turkish construction companies have a collective order book of over $30 billion, second only to China.<\/strong><\/p>\n

On the flip side, the Azerbaijani government owns Turkey\u2019s major petrochemicals company <\/em><\/strong>and Saudi Arabia has been a big investor in the country\u2019s growing Islamic finance sector.<\/em><\/strong><\/p>\n

No one here disputes that these trends give Mr. Erdogan the legitimacy \u2014 both at home and abroad \u2014\u00a0to lash out at Israel and to cut deals with Iran over its nuclear energy,\u00a0moves that have strained ties with its chief ally and longtime supporter, the United States.<\/p>\n

Turkey has exported $1.6 billion worth of goods to Iran and Syria this year, $200 million more than to the United States.<\/p>\n

But some worry that the muscle flexing may have gone too far <\/strong>perhaps the result of tightening election polls at home \u2014 <\/strong>and that the aggressive tone with Israel may jeopardize the defining tenet of Turkey\u2019s founder, Mustafa Kemal Ataturk: <\/strong>peace at home, peace in the world.<\/strong><\/p>\n

\u201cThe foreign policy of Turkey is good if it brings self-pride,\u201d <\/strong>said Ferda Yildiz, the chairman of Basari Holding,\u00a0a conglomerate that itself is in negotiations with the Syrian government\u00a0to set up a factory in Syria that would make electricity meters.<\/p>\n

Even so,\u00a0he warns that it would be a mistake to become too caught up in an eastward expansion <\/strong>if it comes at the expense of the country\u2019s longstanding inclination <\/strong>to look to the West for innovation and inspiration.<\/strong><\/p>\n

\u201cIt takes centuries to make relations and minutes to destroy them,\u201d<\/strong> he said.<\/p>\n

David Caploe PhD<\/p>\n

Editor-in-Chief<\/p>\n

EconomyWatch.com<\/p>\n

President \/ acalaha.com<\/p>\n

, 12 July 2010.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

For decades, Turkey has been told it was not ready to join the European Union \u2014 that it was too backward economically to qualify for membership in the now 27-nation club. That argument may no longer hold. Today, Turkey is a fast-rising economic power, with a core of internationally competitive companies turning the youthful nation […]<\/p>\n","protected":false},"author":83,"featured_media":68792,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[846,89],"tags":[],"class_list":["post-20675","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-turkey"],"_links":{"self":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts\/20675","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/users\/83"}],"replies":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/comments?post=20675"}],"version-history":[{"count":0,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts\/20675\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/media\/68792"}],"wp:attachment":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/media?parent=20675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/categories?post=20675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/tags?post=20675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}