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Insight ..;,:P;::: : ;ll,.···· JI.,••••• lit,...... Turkey Vol. 13 No.1 2011

Guest Editors' Note / III

Commentaries Editor-in-Chief

Editorial Board

ihsan Dagl,Middle East Technical University Assistant Editors Saban Kardos, TOBB Economy & Technology University Kivanc Ulusoy, istanbul University Kadir Ustim, SETA DC Book Review Editor

Talip Kucuscan. SETA Managing Editor Hakan Copur, SETA Production Manager Mustafa Kaya, SETA Subscription Manager Ornare Yazar, SETA Publisher SETA Foundation for Political, Economic and Social Research Graphic Design & Publishing Ferhat Babacan Printing House Pelin Oftet Ltd. Stt., Ankara ISSN 1302-177X / SETVAKFI iktisadi !.jletmesi, 2008. All Rights Reserved

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Meliha Altumsik, Middle East Technical University Billent Aras, istanbul Technical University Steven Cook, Council on Foreign Relations Gokhan Cetjnsaya, istanbul Sehir University Beril Dedeoglu, Galatasaray University Metin Heper, Bjlkent University ibrahim Kahn, Georgetown University Ali Karaosmanoglu, Bilkent University Fuat Keyman, KO<j= University Suat Kuuklioglu, Member of Turkish Parliament Kemal Kirilj'Ti, Bogezici University Stephen Larrabee, RAND Corporation Ian Lesser, The German Marshall Fund Ziya Onilj, K0'Y University Mesut Ozcan, iTO University Soli Chell Kadir Has University Taha Ozhan, SETA Walter Posch, SWP Berlin Philip Robins, Oxford University Orner 'Iaspmar, National Defense University Dmitri Trenin, The Carnegie Moscow Center ilter Turan, istanbul Bilgi University Jenny White, Boston University

Insi8ht Turkey

The 'New Turkey and American-Turkish Relations /1 F. Stephen Larrabee The Rise of Turkish Gaullism: Getting Turkish-American Relations Right /11 Orner Taspmar U.S.-Turkey Relations: Model Partnership as an 'Empty Signifier' / 19 Nuh Ytlmaz The Congressional Elections 2010 and Turkish Interests in the Congress / 27 David L. Wiltse Turkey's Response to the Global Economic Crisis / 37 Ibrahim Turhan and Ziibeyir Kilmc

Articles Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique / 47 ZiyaOni§ Economy as the 'Practical Hand' of 'New Turkish Foreign Policy': A Political Economy Explanation / 67 Mustafa Kutlay Turkeys Neighborhood Policy: An Emerging Complex Interdependence? 1 89 Kadri Kaan Renda Businessmen as Diplomats: The Role of Business Associations in Turkeys Foreign Economic Policy 1109 AltayAth Whither an Axis Shift: A Perspective from Turkeys Foreign Trade /129 Mehmet Babacan Turkey-GCC Relations: Is There a Future? 1159 BiroI Baskan Global Transformations and the :MENA: A Comparative Political Economy Analysis /175 Sadik Unay

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Book Reviews Honored by the Glory ofIslam: Conversion and Conquest in Ottoman Europe / 199 By Marc David Baer Ursula Wokoeck The Shiites ofLebanon under Ottoman Rule, 1516-1788/201 By Stefan WInter Faruk Yashcimen From Hellenism to Islam, Cultural and Linguistic Change in the Roman Near East I 204 Edited by Hannah M. Cotton, Robert G. Hoyland, Jonathan J. Price and David L. Wasserstein Averil Cameron Economic Liberalization and Turkey I 206 By Subidey Togan

Erdal Tanas Karagol

TheBroken Olive Branch: Nationalism, Ethnic Conflict and the Questfor Peace in Cyprus I 209 By Harry Anastasiou Kamer Kasun Turkey's New European Era: Foreign Policy on the Road to EU Membership I 211 By Burak Akcapar

Fatemeh Shayan The Unmaking oj the Middle East, A History of Western Disorder in Arab Lands / 213 By Jeremy Salt Charles Dunbar Egypt, The Moment ofChange / 215 Edited by Rabab al- Mahdi and Philip Marfleet

HilaryFalb Lebanon, Liberation, 'Conflict and Crisis / 217 Edited by Barry Rubin Jeremy Salt Spies in Arabia, The Great War and the Cultural Foundations ofBritain's Covert Empire in the Middle East / 220 By Priya Satia Roberto Mazza Gatekeepers of the Arab Past: Historians and History Writing in 20 th Century Egypt / 222 By Yoav Di-Capua Konrad Hirschler Speaking ofJews: Rabbis, Intellectuals, and the Creation ofan American Public Identity / 225 By LUi Corwin Berman Ephraim Tabory Archaeology ofReligions, Cultures and Their Beliefs in Worldwide Context / 226 By Sharon R. Steadman

Ralpb W Hood. Jr. Turks in Europe, Culture, Identity, Integration / 228 Edited by Talip Kucukcan and Veyis GUngor Netice Yrldrz

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SADIK UNAY and ERDAL TANAS KARAGOL

Turkey's rejuvenated foreign policy activism firmly constructed on novel conceptual parameters, such as "strategic depth;' "zero problems with neighbours;' "maximum cooperation" and "balance between security and freedom'; attracted ever-increasing academic and popular attention over the course of the last decade. By now, a substantial reservoir of literature has emerged, assessing the profound transformation ofTurkish foreign policy from different angles under the leadership of Ahmet Davutoglu, Turkey's Minister of Foreign Affairs. Depending on their respective ideational/ideological standing, various experts dubbed the proactive, multidimensional and order-creating tendencies of the new foreign policy attitude as a sign of "Turkey's rising star" as a regional and even global power; or an indication of carefully camouflaged "neo-Ottomanism" associated with an "axis shift" towards the Muslim world. Likewise, Turkey's singular experiment, since the 1980s, with the first and second-generation models of neoliberalism has shaped the country's transition from an inward-looking import-substitution-cum-planning regime to an export-oriented open economy. This experience has also triggered the accumulation of a comprehensive collection of writings evaluating various aspects of ongoing structural transformation. Academics and experts with a more liberal economic orientation and the IMF-led Bretton Woods circles praised Turkey's early performance as "a textbook example of successful liberalization;' while relatively left-leaning authors warned against the fragile institutional foundations, weak regulatory-monitoring mechanisms, and insufficient social safeguards embedded in the Turkish model. However, Turkey's post-2001 economic performance characterized by a series of regulatory reforms that strengthened oversight-on public finance and the financial sector, robust growth dynamics, and resilience to external shocks attracted the attention of international investors to this "emerging market" and drew widespread praise from the majority of economic observers. Partly as a result of the resilience ofrigid disciplinary boundaries between political science and international relations, and economics and development studies, and partly due to the tendencies of independent observers to use supportive material.-from their specific area of interest, a clear vacuum in the literature appeared concerning critical interfaces and linkages between Turkish foreign policy and macroeconomic developments. This special issue

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of Insight Turkey aims to kick-start interdisciplinary studies that could contribute to the filling of that vacuum. By mainly adopting an international political economy (IPE) perspective, this special issue on the " Political Economy of Turkish Foreign Policy" brings together a provocative collection of articles written by political scientists, international relations experts, and economists exploring the economic underpinnings and repercussions of the "new Turkish foreign policy:'

T he 'New Turkey' and American-Turkish Relations!

To this end, articles in this issue cover the profound developments witnessed in the global political economy and particularly Turkey's regional environment in the last decade; identify the foremost economic consequences

of Turkey'smultidimensional foreign policy; probe into tbe objective validity

F. STEPHEN LARRABEE>

of the "axis shift" arguments in terms of international trade patterns by analyzing Turkey's trade over time with her neighbours, the ED countries and the Islamic world; and assess the particular role of main economic actors, conglomerates and business associations in the formulation and implementation of Turkish foreign policy. In doing that, this issue of Insight Turkey aims to provide an arguably more «objective" reading of ongoing transformations in Turkey's foreign policy orientation and global positioning in the light of concrete figures and performance outcomes, rather than political/ ideological discourses.

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ficulties and strains. The U.S. invasion of Iraq contributed to a sharp deterioration of

US.-Turkish relations and a visible rise in anti-American sentiment in Turkey. 2 More recently, differences over Turkey's ties to Iran and the problems in Turkish-Israeli relations have created tensions in relations with the Obama Administration and raised concerns

As far as the overall conclusions which could be drawn from the articles presented in this special issue of Insight Turkey are concerned, perhaps the first and foremost is a categorical rejection of reductionist and crude categorizations compressed under the rubric of the «axis shift" debate. Widespread evidence from international trade and foreign economic relations confirm that there is absolutely no concrete basis to justify the proposition that Turkey is moving away from its traditional Western-orientation and realizing a systematic policy of integration with her eastern/Islamic neighbours. On the contrary, there is strong evidence confirming Turkey's enthusiasm to increase her economic interdependence with the neighbouring countries in respective of their cultural/religious affiliation, and realize new openings in relatively unexplored markets in Africa, Latin America, and East Asia to strengthen her newly adopted role as a regional power and global broker.

in Washington and other Western capitals that Turkey is drifting away from tbe West in favor of strengthening ties with the Muslim world. Strains in U.S.-Turkish relations are noth-

ing new. The us. withdrawal of Jupiter missiles in tbe aftermatb of the Cuban missile crisis precipitated a serious crisis regarding the

The second conclusion concerns the systemic shift in the "eplcentre of the global political economy" from the Euro-Atlantic axis to the East and South

credibility of the US:s commitment to defend Turkey against outside attack. US.-Turkish re-

Asian heartland led by China, India, and Russia closely followed by a group

lations also suffered a sharp downturn as a result of the 1963-1964 Cyprus crisis. The crisis

of emerging markets, which incidentally include Turkey. The profound transformation in the priorities of Turkey's foreign policy and macroeconomic strategy should be read in view of tectonic shifts in the world system and dynamic responses given to them, rather than ideological precepts and unwarranted assumptions about the true intensions ofleading political actors.

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n recent years, us. -Turkish relations have been plagued by significant dif-

prompted Ankara to broaden its security ties * Distinguished Chair in European Security at the RAND Corporation, [email protected] mSl£ht Turkey Vol 13/ No. 1/2011 ,

pp 1-9

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The 'New Turkey' and American-Turkish Relations

F. STEPHEN LARRABEE

Turkey's recent foreign policy activism is aimed at overcoming the anomalies of the Cold War. It represents an attempt to broaden and diversify Turkey's foreign policy not change its basic orientation

and reduce its dependence on Washington. The Turkish invasion of Cyprus in 1974 precipitated an even more severe crisis. In response to the invasion, the US. Congress imposed an arms embargo on Turkey, which resulted in a sharp deterioration of U.S.- Turkish relations.

While these crises put severe strains on the US.-Turkish partnership and prompted Turkey to begin to reduce its dependence on the United States for its security, their impact was mitigated by the constraints imposed by the Cold War. In the face of an overriding Soviet threat, both sides felt the need to maintain strong security ties and not allow these disagreements to fundamentally weaken the security partnership.

Turkey's Changing Security Environment

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The current strains are quite different. They are primarily the result of structuralchanges in Turkey's security environment, particularly since the end of the Cold War. The disappearance of the Soviet threat removed the main rationale behind the US.-Turkish security partnership and reduced Ankara's dependence on Washington. At the same time, it opened up new opportunities ~d vistas in areas that had previously been neglected or were off-limits to Turkish policy, particularly in the Middle East and the Caucasus/Central Asia. Ankara sought to exploit this new diplomatic flexibility and room for maneuver by establishing new relationships in these areas.

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In addition, with the end ofthe Cold War, the locus ofthreats and challenges to Turkish security shifted. During the Cold War, the main threat to Turkish security came from the north-from the Soviet Union. Today, Turkey faces a much more diverse set of security threats and challenges: rising Kurdish nationalism and separatism; sectarian violence in Iraq, which could spill over and draw in outside powers; the possible emergence of a nuclear-armed Iran on Turkey's doorstep; and a weak, fragmented Lebanon dominated by radical groups with close ties to Iran and Syria. Most of these threats and challenges are on or close to Turkey's southern border. As a result, Turkish strategic attention is today focused much more on the Middle East than it had been in the past because this is where the key threats and challenges to Turkish security are located. In addition, Turkey's economic interests have shifted towards the east and south.

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This does not mean that Turkey is turning its back on the West or that its policy is being "Islamisized," as some critics charge. Rather Turkey's recent foreign policy activism is aimed at overcoming the anomalies of the Cold War. It represents an attempt to broaden and diversify Turkey's foreign policy, not change its basic orientation.

Part of Turkey's recent foreign policy activism has had its roots in the growing frustration and disenchantment with Europe and the problems encountered in its ED membership bid

This is not to argue that the current ruling Justice and Development Party's (AKP) Islamic roots have had no influence on Turkish policy, but they have not been the main drivingforce behind Turkish policy. Ankara's foreign policy primarily represents an attempt to adapt to Turkey'snew strategic environment and exploit the new flexibility and freedom of maneuver afforded by the end of the Cold War.

Turkey's new foreign policy outrea."ch has not been limited to the Middie East; it has also included an effort to improve ties to the newly independent states in Central Asia and the Caucasus.' Turkey's opening to Central Asia and the Caucasus began well before the AKP came to power in November 2002. In the first few years after the collapse ofthe Soviet Union, Turkey, under the dynamic leadership ofPresident Turgut Ozal, launched a concerted campaign to expand relations with the newly independent states of Central Asia. Ankara opened up cultural centers in the Central Asian republics, established extensive scholarship programs to allow students from these countries to study in Turkey, and expanded its television broadcasts in an effort to extend its cultural influence in the region. The AKP has. built on Ozal's early efforts and given them new impetus. The main driving force behind the AKP's policy in Central Asia, however, has been energy not Islam. Under the AKP, Turkey has focused largely on intensifying ties with the energy-rich countries of the Caspian basin, especially Turkmenistan, Azerbaijan, and Kazakhstan. Kyrgyzstan, Uzbekistan, and Tajikistan, which have few energy resources, have received far less attention. Similarly, the significant improvement in Turkey's relations with Russia in the last decade has little to do with religion or the AKP's Islamic roots. As in Central Asia, the rapprochement with Moscow has been driven primarily by economics' particularly energy concerns. Russia is Turkey's largest trading partner and its largest supplier of natural gas. Moscow supplies nearly 65 percent of Turkey's natural gas imports and 25 percent of its crude oil imports. These close economic and energy ties have given Ankara a strong vested take in maintaining cordial po-

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ESTEPHENLARRABEE

litical relations with Russia At the same time, the loss of momentum in Turkey's EU membership bid has reinforced Ankara's desire to expand its ties to other areas. Part of Turkey's recent foreign policy activism has had its roots in the growing frustration and disenchantment with Europe and the problems encountered in its EU membership bid. As Turkey's problems with Europe have increased, Turkey has sought to broaden its ties elsewhere, especially with those areas and countries where it has long-standing historical and cultural ties.

American policymakers are dealing with a "New Turkey" -one which is politically more self-confident and more willing to assert its own national interests

Domestic factors have also had an impact on Turkey's foreign policy. The democratization of Turkish politics in the last several decades has changed the dynamics of Turkish foreign policymaking by reducing the influence of the military in Turkish politics. The military remains an influential force in Turkish politics, but it does not have the political clout it used to enjoy a decade ago and is subject to much stronger civilian control. Today, there is a vibrant and diffuse foreign policy debate, with a diversity of actors striving to influence it. This has made foreign policy much more difficult for the traditional Kemalist elite to control, and has also made U.S.-Turkish relations more difficult to manage. In short, the United States has to deal with a very different Turkey today than the Turkey during the Cold War. The disappearance of the Soviet threat has reduced Turkey's dependence on the United States for its security and deprived the U.S.-Turkish security partnership of a clear unifying purpose. At the same time, Turkey's geographic role and interests have expanded. Turkey now has interests and stakes in various regions it did not have two decades ago. It is thus less willing to automatically follow the U.S:slead on many issues, especially when U.S. policy conflicts with Turkey'sown interests.

This does not mean that Turkey is turning its back on the West or the United States. Turkey still wants-and needs-strong ties with the United States. But the terms of engagement have changed. Ankara is a rising regional power and is no longer content to play the role ofjunior partner; American policymakers are dealing with a "New Turkey" -one which is politically more self-confident and more willing to assert its own national interests. '!

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Turkey has the 17'" largest economy in the world and the sixth largest in Europe and has seen an average annual growth rate ofnearly 7 percent in the last five

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The 'New Turkey' and American-Turkish Relations

years. While Turkey's high growth rates may not be sustainable over the long haul, as Ian Lesser has noted, a more assertive and independent Turkish policy line is likely to persist and Western governments, including the United States, will need to learn how to live with it."

The Danger of Strategic Drift

The real danger is "strategic drift" and an increasing decoupling of US. and Turkish security interests. Both the US:s and Turkey's policies have lost their agreed sense of common strategic purpose

The problem is not that Turkey's policy has become "Islamisized" The real danger is "strategic drift" and an increasing decoupling of U.S. and Turkish security interests. With the collapse of the Soviet Union, both the U.S:s and Turkey's policies have lost their agreed sense of common strategic purpose. The result has been an increasing decoupling of U.S. and Turkish strategic interests. The AKP's Islamic roots have reinforced this trend but they have not caused it. The problem has been aggravated by a sense of disappointment on the U.S. side. President Obama has invested a lot in the relationship with Turkey, which he argues is "more important than ever'" The administration has stepped up military cooperation and assistance to Turkey in its struggle against the PKK-Turkey's number one security problem and a source of tension with the Bush Administration. It has also strongly backed Turkey's bid for EU membership, the rapprochement with Armenia, and the Erdogan government's "Kurdish Opening" -three other important Turkish policy priorities. But many U.S. officials feel Obama has received little in return for his efforts. While cooperation with Turkey has been effective in many areas such as Iraq and the Balkans, on critical security issues of great concern to the United States, such as the imposition of UN sanctions against Iran, Turkey has opposed the U.S.position. This has led many U.S. officials and congressmen to question whether the United States can really rely on Turkey in a crunch.

These strains have been given new impetus by the publication by WikiLeaks of classified cables from the U.S. embassy in Ankara which portray Prime Minister Erdogan and Foreign Minister Davutoglu in an unflattering light. However, while embarrassing, the leaked cables represent a diplomatic tempest in a teapot and not a serious crisis in bilateral relations. The most controversial cables were written by mid-level diplomats during the Bush Administration at a time when strains in U.S.-Turkish relations were more pronounced than they are today. Davutoglu has gone out of his way to downplay the Significance of the leaks, stressing the close

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F. STEPHEN LARRABEE

The 'New Turkey' and American-Turkish Relations

fective and will only serve to reinforce Iranian intransigence. Turkish officials argue that Turkey's close ties to Tehran enable it to influence the Iranian leadership behind the scenes.

The deterioration in TurkishIsraeli relations adds a new element of instability to the already highly volatile situation in the Middle East and could have a spill-over effect on u.s.Turkish relations

However, Turkey's emphasis on diplomatic engagement with Tehran has produced few visible concrete results so far. Iran has agreed to reopen negotiations led by Lady Ashton nnder the P5 plus 1 formula. But the severity ofthe sanctions has been main factor that has induced Iran to return to the negotiating table, not sweet talk from Ankara.

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Turkey still wants-and needs-strong ties with the United States. But the terms of engagement have changed.

and cordial ties that exist at the highest level with U.S. officials in the Obama Administration, and both Secretary of State Hillary Clinton and President Obama have publically reiterated the importance that the United States attaches to good relations with Turkey Prospects for the Future

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At some point down the line, Turkey could play an important role in facilitating a resolution of the nuclear issue with Iran. It thus makes sense for Ankara to keep diplomatic channels open to Tehran. However, such a mediating role is likely to have a serious chance of success only when Tehran concludes that its current policy of evasion and obfuscation has failed and become a serious obstacle to its economic and political stability and development. Prudently applied, the sanctions can help to hasten that day. Realism and a little "tough love" on Ankara's part would help as well. In addition, Ankara needs to take steps to repair relations with Washington. Turkey's opposition to the imposition ofUN sanctions against Iran has weakened support for Turkey in the U.S. Congress and raised questions in the minds of many congressmen about Turkey's reliability as an ally.Ifthese differences persist, they could complicate Turkey's ability to obtain congressional support for important weapons procurement requests in the future.

The attempt by both sides to downplay the impact ofthe Wikileaks cables does not mean that U.S.-Turkish relations are likely to be trouble-free in the future. Several issues are likely to pose important policy challenges. The most important challenge is posed by differences over Iran's nuclear program. U.S. and Turkish strategic interests regarding Iran basically coincide: Neither side wants to see the emergence of a nuclear Iran. The acquisition of nuclear weapons by Iran could spark a destabilizing nuclear arms race in the Middle East. It could also provoke a divisive internal debate in Turkey about whether Ankara should seek to acquire its own nuclear arsenal.

The sharp downturn in Turkey's relations with Israel poses a second important area of discord with Washington. The deterioration in Turkish-Israeli relations adds a new element of instability to the already highly volatile situation in the Middle East and could have a spill-over effect on U.S.-Turkish relations. While Turkish-Israeli relations are unlikely to regain the warmth or strategic importance they enjoyed in the late 1990s, a reduction in current tensions with Tel Aviv would not only enhance security in the Middle East but would also remove an important irritant in U.S.-Turkish bilateral relations.

The differences between Ankara and Washington over Iran are primarily over tactics. The Erdogan government believes sanctions against Iran will not be ef-

The Armenian Genocide Resolution (H. R. 252) poses a third potential irritant. The U.S. House Foreign Affairs Committee passed the resolution by a one-vote

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F. STEPHEN LARRABEE

margin in early March 2010, prompting Ankara to recall its ambassador. While the Obama Administration subsequently persuaded the House leadership not to bring the resolution to a floor vote. the issue is far from dead and could re-emerge after the new Congress returns to work in January 2011. As a result of changes precipitated by the mid-term elections last November the Republicans will control the House in the new Congress.. This normally would work to Turkey's advantage. The Republicans have traditionally given strategic considerations priority in the debate over the resolution. However, many Republicans such as Ileana Ros -Lehtinen, the new chairman ofthe House Foreign Affairs Committee, are staunch supporters of Israel and have been angered by Erdogan's strident attacks on Israel and Turkey'svote in the UN against imposing sanctions on Iran. Thus Turkey cannot automatically count on strong Republican support to the same degree it could in the past. Lehtinen's voting record on the Genocide resolution, for instance, is mixed: she voted against it 2007 and 2009 but voted for it from 2000-2005.

In addition, Turkey could take several actions of its own which could weaken congressional support for the resolution. The first would be to show greater political support for Western sanctions toward Iran, especially those US. sanctions that go beyond the sanctions called for in the UN. resolution. As noted earlier, Turkey's opposition to the imposition of sanctions in the UN. has angered many congressmen, including many Republicans, and weakened support for Turkey in Congress. If Turkey were to support some of the unilateral US. sanctions beyond those mandated by the U.N., this could enhance Turkey's image in Congress and help Ankara regain some of that support.

The 'New Thrkey' and American-Turkish Relations

new conditions regarding deployment, this could provoke new strains in relations with Washington as well as with many of Turkey's European allies.

Finally; the U.S:s use of Turkish bases, particularly the Incirlik air base, is likely to remain a sensitive issue in bilateral relations. Turkey has allowed the United States to use Incirlik to transport men and materiel to Iraq and Afghanistan. However, given its expanded interests in the Middle East, Turkey is likely to be very cautious about allowing the United States to use it bases to conduct combat operations in the Middle East unless these operations are clearly perceived by Turkish leaders to be in Turkey's national interest. As a result, the United States cannot automatically assume it will have access to Turkish facilities in future Middle East contingencies. Endnotes 1) This article is a revised and expanded version of a presentation by the author at the Insight Turkey Conference, "Debating 'New Turkey"; Washington DC, December 3, 2010. 2) For a comprehensive discussion, see F. Stephen Larrabee, Troubled Partnership. U.S.-Turkish Relations in an Era ofGlobal Geopolitical Change (Santa Monica: The RAND Corporation, MG-899PAP, 2010). 3) For a comprehensive discussion, see F. Stephen Larrabee, "Turkey's Eurasian Agenda," The Washington Quarterly, Vol. 34, No.1 (Winter, 2011), pp.l03-l20. 4) Ian. O. Lesser, "US-Turkish Relations and the Risks of Strategic Drift;' Turkish Policy Center 2010, p. 2. 5) Tolga Tanis, "Relationship with Turkey 'more important than ever; US president says," Hurriyet Daily News and Economic Review, December 19, 2010.

The second action that could help would be for Ankara to restart the dialogue on normalization of relations with Armenia broken off in April 2010. This would enhance Turkey's image in Congress and help defuse support for the genocide resolution. Such a move, however, would need to be carefully coordinated with Azerbaijan in order to avoid stimulating new fears in Baku that Turkey was putting its interest in detente with Armenia above its friendship with Azerbaijan Turkey's approach to missile defense will also have an important impact on bilateral relations. Missile defense is one ofthe Obama Administration's top priorities and has strong Republican backing. Turkey's support for missile defense at the NATO summit in Lisbon in November has brought US. and Turkish policy into closer alignment. But many details still remain to be worked out regarding the deployment of the missile defense system. If Turkey gets cold feet or raises

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CALL FOR PAPERS

MEHAT CONFERENCE 2011: "Mutual Perceptions" University of Exeter, 27-29 June 2011 The British Society for Middle Eastern Studies (BRISMES) organizes its annual conference 2011 at the University of Exeter in association with the European Association for Middle Eastern Studies (EURAMES) and the Association of Far Eastern Middle Eastey be proposed. As in previous BRISMES conferences, panels on topics not covered by the overall theme or the research networks may also be proposed. Individual papers, however, will not be accepted unless they are relevant to the overall theme, relevant to the research network sessions, or integral to a panel proposed on a different topic.

T he Rise of Turkish Gaullism: Getting Turkish-American Relations Right

Those wishing to participate should send a 250-word abstract at:

OMER TA~P1NAR*

[email protected] We will consider both individual papers and pre-arranged themed panels; the latter is especially encouraged. More information about the conference and the application process can be viewed at our website: http://cas.uchicago.edu/workshops/mehat/conference

JOURNAL OF ARAB & MUSLIM MEDIA RESEARCH (JAMMR) http://www.intellectbooks.co.uk!journals/view-journal.id=148

Call for Papers: Special Issue NEW MEDIA, PUBLIC OPION & DEMOCRACY IN THE ARAB & MUSLIM WORLD The aim of this special issue of the Journal of Arab and Muslim Media Research is to develop and publish a timely collection of papers representing current research in this area. Of particular interest are papers that present empirical findings of fieldwork, Manuscripts to be considered for publication should be submitted via e-mail Each manuscript should be no more than 8500 words in main text and 150 words in abstract. All submissions will be blind-refereed.

Deadline for submission of full papers: 15th March 2011 Please send your completed papers to: Editor: Dr Noureddine Miladi ([email protected]) School of SOcial Sciences, University of Northampton, Park Campus, Northampton NN2 7AL, UK

010 proved to be a difficult year in Turkish-American relations. The Gaza flotilla .incident and Turkey's "no" vote to a new round of sanctions against Iran at the United Nations Security Council, once again, triggered a heated debate about the "Islamization" of Ankara's Middle East policy. The cliche question of "who lost Turkey?" maintained its relevance for most of the year. In the meantime, the looming threat of an Armenian genocide resolution continued to sporadically dominate the bilateral agenda.

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Overall, American official circles thatfollow Turkey closely tend to display a sense of doom and gloom. The perception of an Islamist "axis shift" is real. Popular columnists, such as Tom Friedman from the New York Times, have now joined the cohort of those who share such pessimism. Yet,interestingly such pessimism tends to dissipate in the higher echelons ofAmerican foreign policy. There seems to be a less alarmist approach to Turkey at the level of the National

* The Brookings Institution, and The National War College, [email protected]

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Security Advisor, the Secretary of State, the Secretary of Defense, and certainly the President ofthe United States. Part of this interesting phenomenon is related to the simple fact that everything is relative. American officials who focus on Turkey are often experts on Western Europe, NATO, Russia, the EU, and the Mediterranean. With high expectations and habits established during the Cold War, they tend to look at Turkey exclusively as a member of the transatlantic alliance and a Western state. Their level of disappointment is, therefore, much stronger when Turkey acts in defiance oftransatlantic and western norms. Similarly, there is a tendency to see any deviation from transatlantic norms as Islamization.

In the post-Soviet regional and global order, Turkey and the United States no longer share an existential threat perception

In the eyes of strategist and high level policy makers with global outlook and portfolios, however, Turkey is doing rather well. Turkey is a success story compared to the rest of the Islamic world. It has a growing economy, a functioning democracy, and a strong government that can provide relatively good governance. It is a Muslim country, with a secular, democratic, and capitalist system. And despite its recent popularity in the Islamic world, it is still firmly anchored in the transatlantic alliance represented by NATO. In short, compared to all the major problems and multiple crises facing U.S. foreign policy, Turkey is a country that doesn't pose serious problems for Washington. Yet, one still needs to explain why Turkish and American national interests no longer always converge in order to understand the pessimism among US officials who closely monitor Turkey. Diverging Agendas and Diverging Perceptions There are two fundamental problems that have exacerbated. relations since the demise of the Soviet Union. First and foremost is the absence of a common enemy. In the post-Soviet regional and global order, Turkey and the United States no longer share an existential threat perception. Despite the identification of rterrorism" as a common threat, terrorism is too generic of a concept. Anti-terrorism doesn't provide a sense of urgency, direction and discipline for a genuinely "strategic partnership" anchored around the need to contain, deter, and defeat a common enemy that threatened both Washington and Ankara with nuclear weapons during the Cold War.

Second, as a byproduct of the post-Soviet order, the center of gravity of the Turkish-American bilateral relationship shifted from Eurasia to the Middie East. Turkey's relevance for America has increasingly become its connections with the

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The Rise of Turkish Gaullism: Getting Turkish-American Relations Right

Middle East and larger Islamic world. At the same time, Americas new threat perception became "rogue states" such as Iran, Iraq, and Syria, which all happened to share borders with Turkey. Yet, as Ambassador Mark Parris has previously argued there is a structu,ralproblem in the way American bureaucracy thinks of Turkey. "For reasons of self-definition and Cold War logic, Turkey is considered a European nation. It is therefore assigned, for purposes of policy development and implementation, -to the subdivisions responsible for Europe: the European Bureau (EUR) at the State Department; the European Command (EUCOM) at the Pentagon; the Directorate for Europe at the NSC, etc. Since the end of the Cold War, however, and progressively since the 1990-91 Gulf War and 9/11, the most serious issues in U.S.-Turkish relations - and virtually all ofthe controversial ones - have arisen in areas outside "Europe:' The majority, in fact, stem from developments in areas which in Washington are the responsibility of offices dealing with the Middle East: the Bureau for Near East Affairs (NEA) at State; Central Command (CENTCOM) at the Pentagon; the Near East and South Asia Directorate at NSC."l

During the 1990-91 Gulf War, the Turkish-American partnership survived the test in great part thanks to Turgut Ozal. Yet, even then, the Turkish military proved very reluctant to fully back the American war effort. The clash between Ozal and then-Chief of General Staff Gen. Necip Torumtay ended up with the resignation of the latter. In 2003,12 years after the first potential crisis in TurkishAmerican relations was averted thanks to Ozal's leadership, the second Gulf War proved much more consequential for the future of Turkish-American relations. The big picture was clear: America was increasingly involved in fighting wars in Turkey's immediate neighborhood. Turkey did not share America's threat perception. In the first Gulf War, it was Turgut Ozal that averted the crisis. In the second Gulf War of 2003 Turkey simply decided to stay out. Similar dynamics are in play today, as Washington is asking for Turkey's support against Iran. Turkey doesn't want to destabilize Iran because it doesn't share America's threat perception. To be sure, Iran is a rival of Turkey, and Ankara doesn't want Iran to acquire nuclear weapons. But there is no shared sense of urgency with Washington or Tel Aviv. In fact, Turkey believes the only way to stop Iran from acquiring a nuclear military capacity is to engage it more effectively on the economic and diplomatic fronts. Washington, on the other hand, wants to isolate Iran. This is exactly what happens when two countries no longer share the same threat perception. In the eyes of Turkish decision makers and public opinion, neither Iraq under Saddam Hussein, nor Iran under the Islamic regime and certainly not the close ally of today, Syria, posed an existential threat necessitating a war effort.

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Making things worse is the fact that Turkey developed a much different threat perception since the end of the Cold War: Kurdish separatism. At a time when Washington wanted to prioritize Iraq, Iran' and Syria as regional th~eats, Turkey remained a status quo power reluctant to destabilize the region. In fact, Turkey needed the support, stability and partnership of its Middle Eastern neighbors more than ever. Ankara wanted to contain, deter and defeat its new existential threat, the Kurdistan Workers' Party (PKK). To do so required a regional security partnership with Syria, Iraq, and Iran. All of these neighbors have significant Kurdish minorities and are as determined as Turkey to block Kurdish nationalist aspirations for independence.

If current trends continue, Washington might witness the emergence in Turkey of not necessarily an Islarnist foreign policy but a much more nationalist, independent, self-confident and defiant strategic orientation

After 1991, the US appeared to be on the wrong side of this regional equation. The no-fly zone enforced in northern Iraq by the US Air Force created conspiracy theories about American support for Kurdish separatism and independent statehood. In the eyes of Ankara, Baghdad, Tehran and Damascus, Washington had become the protector patron of the Kurds. This perception went from bad to worse as Kurds became America's best friend in post-Saddam Iraq and began to pursue a maximalist territorial agenda with claims over Kirkuk. All this proved too much to digest for a Turkish public opinion that had always maintained a heavy dose of fear of disintegration - the Sevres Syndrome - due to Western support for Kurdish and Armenian nationalism. Of course, it did not help that Turkey's own repressive anti-Kurdish military policies in the early 1980s had triggered a regional Kurdish backlash. By the mid-1990s a major part of the Turkish army was fighting a Kurdish insurgency in southeastern Anatolia. Therefore, in this post-Cold War context, Ankara and Washington not only failed to share a common threat perception; in the eyes of most Turks, America itself had become the main supporter of the local and regional enemy, Kurdish separatism. It was hardly surprising that a radical paradigmatic shift was taking place in Turkish-American relation as far as the Turkish public opinion's growing distrust of the United States was concerned. Perhaps most troubling is the state ofTurkish public opinion vis-a-vis the United States. During the Cold War, resentment against the United States was mainly a leftwing phenomenon. Today, however, anti-Americanism has become the com-

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The Rise of Turkish Gaullism: Getting Turkish-American Relations Right

mon denominator of the vast majority A Gaul1ist Turkey may in the of Turks. Bashing the United States and long run decide to no longer blaming Washington for every domestic pursue an elusive EU issue - from the Kurdish conflict to the membership. It may even rise ofthe Justice and Development Party question its military alliance (AKP) - has become a national hobby. Most secularist and Kemalist believe that with the United States there is an American agenda to promote "moderate Islam" in Turkey and a "Turkish model" for the Islamic world. In addition to President Bush praising Turkey as a model of for the Islamic world, in 2004, then US Secretary of State Colin Powell's reference to Turkey as an "Islamic Republic" strengthened the secularist paranoia and provoked widespread conspiracy theories and criticism in Turkey.Many within the secularist establishment thought that America was pushing Turkey to play the role of the "good Muslims" against the bad ones in the Arab world, a role that would situate Turkey firmly in the Islamic Middle East rather than secular Europe. Then President Ahmet Necdet Sezer reacted to such alleged American plans by stating that "Turkey is neither an Islamic republic, nor an example ofmoderate Islam." The fact that Fetullah Gulen resides in the United States and the perception ofAKP as America's favorite political party in Turkey are important factors. As previously mentioned, similar negative dynamics are in play on the Kurdish front. The majority of Turks also believe. that there is an American agenda supporting Kurdish independence. When you have a domestic public opinion that is so .resentful of American foreign policy and a prime minister who really cares about what the "Turkish street" thinks, there emerges a combustible mix. In that sense.what we are witnessing in Turkey is not the emergence of an Islamist foreign policy but rather the rise of a populist and quite nationalistic government.

The Rise of Turkish Gaullism Another reason why US officials who closely monitor Turkey differ. in their analysis of the country from those with global portfolios is because of the exaggerated importance attached to Islam. The current analysis on Turkey in most American circles constantly refers to the tension between «secularism and Islam" or "Eastern versus Western" proclivities. Such focus often comes at the expense of the most powerful force driving Turkish foreign policy: nationalism and selfinterest. Such nationalism is driven by a perception that Turkey'sself-interests are not necessarily aligned with the interests of the West. One should not underestimate the emergence of nationalist and self-confident Turkey that transcends the

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One should not forget that Turkey's newfound sense of confidence and grandeuris taking place in a context where most Turks feel they are not getting the respect they deserve from the West

The Rise of Turkish Gaullism: Getting Turkish-American Relations Right

over-emphasized Islamic-secular divide. After all, both the Turkish military's Kemalismand the AKP neo-Ottomanism - the ideal of regional influence - share a similar vision of Turkish independence and nationalism.

If current trends continue, Washington might witness the emergence in Turkey of not necessarily an Islamist foreign policy but a much more nationalist. independent, self-confident and defiant strategic orientation - in short, a Turkish variant of"Ganllism:' Turkish Gaullism is primarily about rising Turkish self-confidence and independence vis-a-vis the West. A Gaullist Turkey may in the long run decide to no longer pursue an elusive ED membership. It may even question its military alliance with the United States. Burdened by a sense that it never gets the respect it deserves, Turkey may increasingly act on its own in search of "full independence, full sovereignty" strategic leverage and, most importantly, "Turkish glory and grandeur:' As France did under Charles de Ganlle in the 1960s, Turkey may opt for its own "force de frappe" - a nuclear deterrent - and its own "Realpolitik" with countries such as China, India, and Russia. It could even contemplate leaving, as France under de Ganlle did, the military structure of NATO, while maintaining its political membership in the organization.

To understand Turkish Gaullism one needs to look at Turkey'simpressive economic performance. Today's Turkey offers a considerably different picture than Turkey in the 1990s. During the "lost decade" of the 1990s, the Turkish economy was plagued by recessions, an average inflation rate of 70 percent, structural budget deficits, chronic financial crisis and constant political instability. In addition to such dismal economic performance, the fight against the PKK, had caused 30,000 deaths during that decade alone. Turkey managed to surprise most, analysts with its remarkable economic recovery and political stability in the last 10 years. Shortly after the lost decade culminated with the worse financial crisis in Turkish history in early 2001, Turkey began structural economic reforms and cleaned up its financial and banking system under the stewardship of Finance Minister Kemal Dervis. Economic and political reforms continued after the AKP came to power in 2002. In the last 8 years, the Turkish economy managed to grow by an average of 6.5 percent. Turkey is now the sixteenth largest economy in the world, and in the last decade, Turkish per capita income has nearly doubled from $ 5500 to $10,500. C

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Such economic performance. couThe rise of Turkish Gaullism pled with political stability fuels an unneed not come fully at the precedented sense of self-confidence expense of America and and pride in Turkey. The AKp, under the Europe. But Turks are already charismatic and mercurial leadership of Prime Minister Erdogan personifies this looking for economic and sense ofTurkish "hubris:' Much has been strategic opportunities in Russia, said about the Islamist character of the India, China and, of course, the AKP and the "Islamic shift" in Turkish Middle East and Africa foreign policy. Yet, one should not forget that Turkey's newfound sense of confidence and grandeur is taking place in a context where most Turks feel they are not getting the respect they deserve from the West, particularly from Europe and the United States.

Should the West pay attention to Turkish Gaullism? The answer is yes. The recent referendum results on Turkish constitutional reforms clearly show that the AKP is doing well Barring aside a sudden change in the AKP's policies or a new pro-Western sentiment within the CHP under its newly elected leader Kemal Kilicdaroglu, Turkish Gaullism will increasingly define Ankara's foreign policy. In the past, Americans and Europeans would often ask whether Turkey had any realistic geopolitical alternatives and complacently reassure themselves that it did not. But today such alternatives are starting to look more realistic to many Turks.. The rise of Turkish Ganllism need not come fully at the expense of America and Europe. But Turks are already looking for economic and strategic opportunities in Russia, India, China and, of course, the Middle East and Africa. If the strategic relationship between Ankara and Washington continues to erode and prospects for joining the EU continue to recede, Turkey will certainly go its own way. Americans and Europeans who do not take the risk of such a development seriously underestimate the degree of resentment of the West that has been buIlding up in the country. It is high time for analysts to pay more attention to what unites the secularist and Islamists camps in Turkey: Turkish nationalism. Gaullism may be the real future for Turkey in the 21st century. Endnotes 1. Mark Parris, "Toward a Successful Turkey Policy: Suggestions for the Next Administration," Unpublished paper, 2008.

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U.S.-Turkey Relations: Model Partnership as an 'Empty Signifier' NUHYILMAZ*

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uring his first bilateral intercontinental trip after his election, . President Barack Obama visited Turkey in April 2010. During his visit he used the expression "model partnership" to define US-Turkey relations.

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Ever since Obarna's visit, Turkish and American analysts of Turkish-American relations have been debating what "model partnership" really means. Both sides have emphasized the importance of Turkish-American relations and suggested that a redefinition of relations after the Bush presidency was necessary. However, it seems that there is no agreement on what "model partnership" is or will be. Some-analysts and even politicians have argued that the Flotilla Crisis and Turkey's "No" vote at the UN Security Council put an early end to "model partnership;' which is now only a bygone hope. In this commentary, I aim to take issue

with such arguments and make a conceptual

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contribution to the «model partnership" debate. I argue that "model partnership" has not ended; on the contrary, it has not even started. "Model partnership" is not a well-defined and all encompassing type of relationship. This concept is premised on the recognition that TurkishAmerican relations are very valuable and that the old framework, which threatens the bilateral relationship itself, needs to change. In other words, it is not a "model" describing how Turkish-American relations are today. On the contrary, "model partnership" is the "will to redefine" bilateral relations. AB such, I will treat it as an "empty signifier:' i.c. «a signifier without a signified.'"

The current problem derives from the gradual transformation in the nature of TurkishAmerican relations from a hierarchical relationship into a complementary one

What Went Wrong? U.S.-Turkey relations have experienced difficult times. This is nothing new to the relationship, as the two partners have had serious disagreements in the past even during the Cold War when the two sides worked closely under NATO. However, this time the difficulty behind recent tensions is qualitatively different than the previous disagreements.

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The current problem derives from the gradual transformation in the nature of Turkish-American relations from a hierarchical relationship into a complementary one, i.e. from a "strategicpartnership" to a "model partnership:' In other words, the cause of the ongoing tension that marked the year 2010 does not merely emanate from disagreements over policy problems. It is, in fact, the other way around: policy disagreements are the consequences ofthis transformation in the very core of the partnership. Therefore, any attempt to resolve problems between the two countries, without serious consideration of this structural change, is doomed to fail. What needs to be done is not to offer a policy solution as a «quick fix," but rather to recognize and address the question in a conceptual manner. A conceptual rethinking ofrelations does not mean to supply content for what seem to be otherwise empty concepts. In other words, it should not mean to find a "signified" to the "signifier:' A more radical conceptual thinking is needed to reconstruct the relations on a healthy basis. A possible step in this direction would be to ask, "What does 'model partnership' really mean?" Many analysts have tried to answer this question. Some argue that there is no such thing as a "model partnership:' Some argue that it was a good way to start

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the relations allover again but now it is a lost opportunity. Some simply start talking about "model partnership" as if it is a well-known fact over which there is an agreement. Some merely transfer the content of the «strategic partnership" concept to "model partnership'; and naturally conclude that it is a failed project. Some argue that it is a good project upon which we still place some hopes. And finally, some argue that it is the new framework of Turkish-American relations. The common theme that brings together all of these responses is the desire to answer the question right away without conceptual reflection. None of them pause for a second to try and make sense of the basic reason why we are still discussing the "model partnership:' Let us assume anyone of those answers actually reflects the truth about the issue; then, what does one need to do? If the model partnership has failed, why have there been so many discussions on the issue? If the model partnership is simply another name for "strategic partnership:' why then does it not satisfy the parties and force them to find another label for the bilateral relations between Turkey and the USA? If the model partnership can be saved through some policy solutions, why have there been so many problems especially at the policy level? My answer to these questions and answers is rather simple. The option for a model partnership is still on the table; however, it requires a serious, engaged, and conceptual discussion as the two sides adjust to and negotiate the new form of the relationship. To put it in a different way, I argue that since the conceptual construction and re- negotiation of the partnership as a "model partnership" is still the main issue in defining Turkish-American relations, it is neither a failed nor a complete project.

We can identify the "model partnership" debate as the symptom ofthe lack ofa genuine conceptual engagement and discussion of the fundamental changes takingplace in Turkish-American relations. In short, even though the questions cited above might seem justifiable, none of the answers are satisfactory, or justifiable for that matter, because the question does not require an answer in the first place. The question deserves attention, discussion, engagement, and thoughtful analysis rather than a simple answer. If that discussion can be undertaken, I believe that the two sides can build a healthy and long-term relationship. It remains a serious challenge that these somewhat misplaced questions and responses foreclose the discursive area for a quality discussion that needs to take place. Quality of the Debate on Turkish-American Relations An engaged discussion, which aims to question the current state of the relations, requires a pause before answering what a "model partnership" signifies. The

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NUHYILMAZ

"Model partnership" is not the name of the new phase of Turkish-American relations; it is an imaginary space where both parties agree that the old relations are not sustainable

answers described above have not helped ease the tensions in the bilateral relations but kept them alive. One would expect tensions to be relieved when politicians express good will and offer "simple answers" so to speak. But these are not enough, as they do not address the fundamental issue.

The fact that simple explanations do not suffice becomes even more obvious when we consider that the level of cooperation between the two countries is exceptional on many of their foreign policy issues. Why is it that we define the Turkish-American relationship with reference to problem areas only? How do we fail to remember that the u.s. and Turkey work very closely on two top-priority American foreign policy issues, namely the wars in Iraq and Afghanistani? The two countries share similar policies on many other issues such as Syria, Bosnia, Serbia, Caucasus, NATO etc. There are only two significant areas where the two parties diverge on a tactical level: the Iranian nuclear issue and the Israeli-Palestinian conflict. If we were to make a list of agreement and disagreement areas, we would find convergence rather than divergence in most of them. Then, what is the reason for the problems haunting the Turkey-US relationship? Why it is the case that "model partnership" neither solves these problems, nor allows them to disappear from the discussion? The "model partnership" is yet to be constructed through adjustment to a newly defined relationship between the two actors. We need to treat "model partnership" as an empty signifier of this new yet-to-bedefined relationship between the US and Turkey. Since policy agreements or disagreements do not help solve the «structural re:adjustment problem;' then it would be better to leave the policy issues on the side for a more conceptual discussion that might open up a space for in-depth discussion. "Model partnership," used by both parties, would allow us to diagnose the problem. Let's look at how it has been used. Neither explained nor materialized. by either party, "model partnership" does not present concrete solutions or offer a framework. It mainly functions as a word that carne to be used by either party to show that the other partner "violated" the spirit of the "model partnership:' Both parties define "model partnership" differently while they agree on policy issues; but it does not produce any tangible results. Since there is no genuine content to "model partnership;' I argue that "model partnership" is an "empty signifier."Argentinean political theorist Ernesto Laclau

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works on the concept in a political con"Model partnership" as an text. Laclau argnes that an empty signifier empty signifier indicates that is a «Signifierwithout a stgnified'" Laclau strategic partnership is dead; questions the very idea of empty signifia new type of relationship is ers, and asks how it would be possible to have empty signifiers in a system ofsignirequired, but nobody knows fication. His answer to this question is as how new relations will look like impressive as his question: «there can be empty signifiers within the field of signification because any system of signification is structured around an empty place resulting from the impossibility of producing an object which, none the less, is required by the systematicity of the system." This discussion of empty stgnlfiers, therefore, would be a good start to diagnose the problem in Turkish-American relations, or problems in defining what "model partnership" really signifies. Following Laclau's discussion, I see "model partnership" not as a policy issue or a new framework of relations. Rather, model partnership is an "empty signifier:' In other words, model partnership as an empty signifier, does not provide a positive content to the relations nor does it offer a «road map:' Because of this very reason, it lacks the ability to contribute to the discussion in a positive way.

"Model partnership" as an empty signifier, instead, carves out an empty space for Turkish-American relations where it is impossible, under the present conditions, to define or found the bilateral relationship. Therefore, "model partnership" does not show us how to resolve problems; in contrast, it shows that it is impossible to construct a new type of relationship given the current circumstances. «Model partnership;' because ofthis very reason, is not the name ofthe new phase of Turkish-American relations; it is an imaginary space where both parties agree that the old relations are not sustainable. Relations have to be reconstructed. "Model partnership" will be the name ofthat empty space that will be filled with a positive content when the two parties agree on political terms to fill that gap. However, even though there is no positive content to the discussion, model partnership shows that both parties agree on the importance and continuation of the relationship. "Model partnership" indicates that there is an agreement between the parties on the necessity and urgency of a new framework that would allow them to rethink and rebuild a new model. Only through such rethinking would it be possible to prepare the ground for a sustainable and long-term relationship between the two sides. In other words, the concept of "model partnership" signifies "the need for a redefinition of relations;' nothing more.

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U.S.-TurkeyRelations: Model Partnership as an 'Empty Signifier'

NUHYlLMAZ

Since the model partnership' represents this "hegemonic" race to give a positive content to the relations, all «political" actors attempt to fill the content of this empty signifier. "Modelpartnership" as an empty signifier indicates that strategic partnership is dead; a new type of relationship is required, but nobody knows how new relations will look like. This might answer the question why we still discuss "model partnership" and why all parties attempt to give their meaning to the concept. Moreover, this also answers the question why the parties did not give up on the conceptaltogether even though there have been some serious tensions and disagreements.

Now, the Turkish side is pushing for a more egalitarian relationship with the U.S by trying to act as an agent on its own

Since the model partnership discussion is not a policy discussion, it is impossible to put an end to this discussion on a policy level. Policy recommendations would work only if there were an agreed framework on the nature of the relationship, which is currently missing in the Turkish-American relationship. The broader structural question I am concerned with here has to be answered at the conceptual ievel informed by a reconstructed political reality through a re-negotiation of political terms of the game. «Policy recommendations" as .such win-not be sufficient.

Conclusion In the end, "model partnership" as an "empty signifier" shows US. an empty space in the «political discussion" in Turkish-American relations. The American side, which was the "privileged" party in the "strategic partnership:' is attempting to turn this discussion into a policy discussion in order to keep its privileged «subject" position in the relationship. The Turkish side, however, was the "submissive" party lacking the "subject" status enjoyed by the US. Now, the Turkish side is pushing for a more egalitarian relationship with the U.S. by trying to act as an agent on its own. Therefore, Turkey has been focusing on political issues rather than policy issues to be recognized as a "political subject." Turkey is on course to have a real sayin the destiny of affairs it is asked to have a stake in. In the past, it has simply assumed its role in scenarios designed by the US. in a bipolar world. However, just as that anomalous reality no longer exists, the very definition of the relationship is to be redefined through thoughtful conceptual consideration. If a "model partnership" is to be truly realized between the US. and Turkey, the first and foremost condition will not be reaching an agreement on a "policy issue:' The most crucial qualitative difference will be whether the US. can revise

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its general attitude towards and position vis-a-vis Turkey and accept its partner as a true "subject." Once this recognition is realized, it would only then be possible to talk about the content of the "model partnership" and whether it can provide a genuine meaning and framework for the Turkish-American relationship. Until then, Turkish-American relations are destined to experience many tensions and "model partnership" will likely remain an ''empty signifier."

Endnotes 1. I borrow the term from Laclau. See Ernesto Laclau, Emancipation(s), (London; Verso, 2007). I argue that "model partnership" as an empty signifier does not represent either the ideal or the fully accomplished state of Turkish-American relations.

2. Turkey has been helping the u.s. establish stability and security on both issues by engaging with alienated political actors, which cannot be really be done by any other actor. 3. Laclau, Emancipation(s), p. 36. 4. French anthropologist Claude-levi-Strauss, deriving from French anthropologist Marcel Mauss and Russian linguist Roman lakobson, defined empty signifier as a "pure symbol" that does not have a positive semantic value. See Claude Levi-Strauss, Introduction to the Work of Marcel Mauss, Trans. Felicity Baker (London: Routledge, 1987). An empty signifier, similar to lakobsons 'zero phoneme' or Mauss' 'mana: has a "zero symbolic value" that "can take on a value required:' In discussing German phenomenologist philosopher Edmund Husserl's idea of "circle square:" Jacques Derrida argues that an empty signifier is a Signifier that is emptied out all of its empirical content, see Jacques Derrlda, Speech and Phenomena, (Evaston: Northwestern University Press, 1973). . 5. Laclau, Emancipation(s), p. 40.

T he Congressional Elections Preemption, Prevention, and Prolifera Memoirs of Turkey Old and New

The Threat and Use of Weapons in History

Halide Edib With an introduction by Sibel Erol

George H. Quester

When stereotypes of women in the Muslim world abound, Halide Bdib' s memoirs remind us of the courage and dedication of "foremothers" who struggled for emancipation at both personal and national levels. These memoirs open a window on the search for personal expression of a woman caught up in the oppressive dynamics of her polygamous households, and the travails of national liberation and nation-building in Turkey, in which she played an active role. ISBN: 978-1-4128~1002-9(paper) 2009 442pp. $34.95/£31.50/$C41.95 ISBN: 978~1-4128-1540-6(eBook) 2010 442 pp. $34.95/£31.50/$C41.95

"This lively book cuts through conceptual confusions aboutpreventive war and coercive threats, mines relevant historical knowledge overlooked by most commentators, and generates thoughtful lessons for statesmen facing dangerous choices." -c-Richard K. Betts, director, Saltzman Institute of War and Peace Studies, Columbia University ISBN: 978-1-4128-1041-8 (cloth) 2009 221 pp. $39.95/£35.95I$C47.95 ISBN: 978-1~4128-1567-3(eBook) 2010 221 pp. $39.95f£35.951$C4?95

Islamic Culture iu Crisis

Crime of Numbers

A Reflection on Civilizations in History

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Hichem DjaIt Contrasting the achievements of other civilizations, both past and present, Hichem Djart demonstrates eloquently that Arabs and Muslims win not be able to connect with the modern world unless they are able to be inspired by a supreme ambition to further the causes of high culture-s-In knowledge, science, art, literature, and other spheres. ISBN, 978-1-4128-1140-8 (cloth) 2010 257 pp. $39.95/£35.95/$C47.95

Post-Orientalism Knowledge and Power in Time of Terror

Hamid Dabashi This book is a record of Hamid Dabashi's reflections over many years on the question of authority and the power to represent. Who gets to represent whom and by what authority? Dabashi updates Edward Said's classic, Orientalism, and maps it out to the events that led to the post-9fll syndrome. ISBN: 978-1-4128-0872-9 (cloth) 2008 302 pp. $49.95/£44.95/$C59.95 ISBN, 978-1-4128·1209-2 (eBook) 2009 302 pp. $49.95/£44.95/$C59.95

•

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Germany, Turkey, and Zionism 1897·1918 Isaiah Friedman, Using unpublished official German and Zionist records and contemporary diaries, memoirs and other private sources, Friedman proves conclusively that, in spite of the opposition of her Turkish ally, the German government emerged as the foremost protector of the Zionist cause during World War I. ISBN: 978-0-7658-0407~5(paper) 1997 461 pp. $29.95/£26.951$(,35.95

A':'I,ir&Ji}

2010 and Turkish Interests in the Congress DAVID L. WILTSE'

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he 2010-election was by any measure a stinging loss for the Democratic Party in the United States Congress, and perhaps a blowto President Barack Obama. The electorate swept aside the Democratic majority with Republicans gaining 63 seats in the US House of Representatives bringing the new partisan balance to 242 to 193 in the Republicans' favor, and reduced the Democrats' , majority in the United States Senate by seven seats to a Democratic advantage of 53 to 47. The heavy swing of seats in the House and lighter swings in the Senate tend to obfuscate the, actual percentage of each parties' vote share due to the single member district plurality system. The Republicans polled at 51.6 percent and the Democrats 44.8 percent in House races, and in the Senate races the Republicans' vote share was 49.3 'percent to the Democrats' 45.L' Put simply, the Republicans had a very good night indeed and President Obama's relationship with Congress will get much more complicated and contentious.

.. Briar Cliff University, david. wiltse@briarcliffedu

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Deciphering the Message of the Electorate The idea ofan electoral mandate is seemingly ingrained in the American understanding of democratic governance. Though the presidency is most often the focus of scholarly work concerning electoral mandates (and presidents elect are generally quickest to claim them), there is no doubt that congressional delegates search for and act upon perceived mandates as well; with winners pursuing aggressive agendas and the losers generally moving in that ideological direction." The attractiveness of the electoral mandate theory is clear: it allows policymakers and commentators to make easy sense out of the complexities of public opinion. Rather than trying to parse through the layers of nuance and vagaries in the public will, an elected official can simply default to their own ideological agenda, which they presume was the vehicle by which they were elected. However, the murkiness of public opinion and the marginal importance of policy preferences in the voting calculus, have led scholars to reject the claim of policy mandates with near unanimity.' Couple these factors with the weak American party system, the lack ofa cohesive party platform, and the fact that candidates are almost entirely responsible for their own elections," claiming any kind of policy mandate is a patently ridiculous proposition.

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The aftermath of the 2010 election has proven to fall into this historical pattern. The newly empowered and emboldened Republican leadership of the House has predictably made this dubious claim. Hours after the Republican victory was secured, incoming Speaker of the House John Boehner of Ohio claimed the American people delivered a clear message to repeal the "monstrosity" of Obamas health Care reform. This is despite the fact that election-day polling showed voters were evenly divided on the issue. Even the minority leader of the Senate, Mitch McConnell of Kentucky, claimed a part of this mandate despite his failure to deliver a Republican majority in his chamber. What is most remarkable about this claim ofa policy mandate is the fact that many conservatives readily acknowledge that Republicans failed to run on a cohesive policy agenda during the election and merely defaulted to criticisms of President Obama appealingto latent anger and frustration in the electorate." Perhaps the best clues for divining the meaning of American congressional elections are the models that forecast their results. These models do a rather nice job of describing the underlying dynamics that drive American voting behavior. They typically include several structural factors that influence the vote, and a variety of indicators ofthe general political mood ofthe electorate.'

Structurally speaking, it is an axiom that the presidential party almost always loses seats during midterm elections. In 2010, it was never a question of ifthe Dem281

The Congressional Elections 2010 and Turkish Interests in the Congress

ocrats would lose seats, but of how many The American voter is seats they would lose. While the presiimpatient and expects to see dential party typically gains congressiotangible results from their nal seats when their president is elected elected officials quickly, or reelected, an inevitable combination of a decline in presidential popularity from sometimes unfairly so the "honeymoon" following his election, an inability to forward all promised points of the legislative agenda, and perceived shortcomingsoflegislation passed conspire against the president's party. Additionally, the very fact that Republicans had done so poorly in the 2006 midterm and 2008 general elections put them in a position where substantial congressional gains were likely, as the Democrats simply had more seats at risk than did the Republicans. All told, these structural factors put the Democrats in a rather precarious position regardless of how other political factors would eventually play out.' What proved to be the tipping point for the Republicans in this election was the general mood of the electorate-principally comprised of attitudes towards President Obama and the economy. Despite the impressive number of legislative victories for President Obama during his first two years," the electorate was in a very sour mood. Obamas public approval ratings started off rather high, but as he engaged a rather hostile Congress in securing his policy victories," the public began to turn against him. Presidents often face the conundrum ofthe public's demand for pursuing a policy agenda, but have rather strong distaste for the messy policy process that comes with the negotiating and partisan conflict that is endemic in Washington. Obama, bloodied from these protracted legislative fights, simply lost a great deal of standing with the public who perceived him during the election as someone who could rise above the partisanship of Washington and fulfill his agenda without the messiness of partisan bickering and pettiness. During the 2008 election, Obama cast himself as a "post-partisan' candidate and helped fuel these paradoxical expectations. In many regards, he was a victim of his own electoral rhetoric. Republican opposition in the US Senate during Obamas first two years was also noteworthy. Typically the majority party is able to negotiate with enough members of the minority to reach the 60 percent threshold necessary to pass legislation through the Senate. Not so in this Congress. From the beginning of the session in January 2009, the Republican leadership mounted a very effective, disciplined, and simple tactic of opposing Virtually all of the presidents legislative agenda with near unanimity. Additionally, the Democrats had trouble with a few of the more moderate members who were hesitant to venture too far from center. 129

The Congressional Elections 2010 and Turkish Interests in the Congress

fovember 201U, Americans erred Republicans to emocrats by 50.7 to 41.3 in what pollsters call "generic Congressional ballot"

The health care package was perhaps the most visible in this regard.

The second, and most important factor in souring the mood of the electorate was the electorate's assessment on the health of the economy. Though the financial crisis that triggered the «great recession" predated the Obama administration, the felt effects of the recession bore down on the American public with a vengeance shortly after he assumed office. The unemployment rate at the time of the 2008 election was about 6.5 percent. This figure was higher than normal, and was an ominous sign that things would get far worse. Unfortunately for President Obama and millions of Americans, the unemployment rate would swell to 10 percent by November 2009, and stood at about 9.6 percent at the time of the election. Though the economy had been growing for nearly a year, corporate profits had returned to strong levels, and the stock. markets were on the rebound. The most tangible indication of the economic health ofthe nation from the electorates perspective, unemployment, remained at unacceptable and truly painful levels.

When these painful reallties were coupled with the flowery rhetoric and lofiy expectations that brought Obama to the White House in the first place, it is small wonder that the electorate would turn on him to the degree that they did. Displeasure with Congress was also rather high. Typically, Americans hold Congress with the lowest regard when compared to the presidency, Supreme Court, and military, but in 2010 that confidence in the Congress fell to record low levels. Democrats also faced the grim reality that the electorate was turning on them specifically. By November 2010, Americans preferred Republicans to Democrats by 50.7 to 41.3 percent in what pollsters call the "generic Congressional ballot." For proper perspective though we must keep in mind the scope of the President's 2008 victory and the Republican showing in 2010. In 2008, Obama netted 52.9 percent of the popular vote, House Democrats brought in 44.8 percent of the vote in 2010. These are moderate shifts. But even small shifts in presidential popularity and the generic congressional ballot can spell victory or doom in midterm elections." Also, the forces driving the vote are rather vague and in no way represent specific policy preferences. Though policy certainly matters in the voting calculus of a few voters, it is not driving the vote for most. Paradoxically, the public is largely in support of most of the legislation that the president and previous Congress passed when they are asked in public opinion polls, but impres30

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Should the people's economic confidence begin to recover by 2012, President Obama will be well positioned for reelection; should it not, Republicans may well be competitive.

sions of Congress, the president and the way in which they conduct business are more important than the actual policies passed. In sum, we can best characterize this election as the electorate seriously questioning the first two years of the president's term, with disappointment and frustration that tangible improvements in the economy were slow in coming. In no way can it be seen as a full rebuke of the Congress and the President as many may try to infer, and it is certainly not a policy mandate against their legislative agenda.

The Tea Party Perhaps the most intriguing aspect of the 2010 election cycle was the emergence of a new political force known collectively as the Tea Party "Party" is something of a misnomer as the movement itself does not fall under the strict definition of a political party, but is an historical reference to the Boston Tea Party of 1773; an act of civil disobedience where colonists protested the levy of tea taxes upon the colonies by the British parliament. With an unprecedented vigor, the tea partiers truly became a force to be reckoned with and are without doubt the most significant mass movement since the 1960s.

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DAVID L. WILTSE

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The Congressional Elections 2010 and Turkish Interests in the Congress

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Trying to define the nature, scope, and impact of the Tea party is nearly an impossible task since the movement is about as diffuse of a mass movement as seen in the modern era. It is impossible to even get a proper estimate as to how many individuals are involved with the movement since we are dealing with hundreds, perhaps thousands, of individual groups with membership ranging from a dozen in size to thousands. The only constant between all these groups are the labels of "Tea Party" and that they express a conservative political agenda that has a distinct libertarian bent on economic issues accompanied with a strict interpretation of the federalism of the Constitution (read: weak national government). They are especially wary of public spending, deficits, and high taxes. They also uniformly resent President Obama, consider his health care reform law as socialist (if not a fascistic) intrusion into the private sector, and harbor a great deal ofanger over the GM and Chrysler bailouts and the financial bailout (signed into law by President Bush). The latter three give rise to their populist claims of goverumeut coming to the aid of the business interests of Wall Street at common citizens' expense.

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Throughout the nation Tea Party organizations have sprouted up, often facilitated by social networking websites. They first received mass atteution during the health care debate during the summer of2009. Tea party activists would regularly attend town hall meetings to verbally assail members of Congress with vociferous accusations (often patently false)" regarding the contents of the proposed law. There can be no doubt that the tea party was partly responsible for the precipitous decline in the popularity ofthe health care reform package and they certainly hurt several members of Congress, who were publicly haraugued during its passage.

The power and influence of the Tea Party lies both with its identifiers and the politicians that have associated themselves with the movement. The Tea Party proved to be especiaily powerful in Republican primary elections. As the movement gathered momentum in 2009, they systematically began to chailenge the Republican establishment. From a tea partier's perspective, "establishment" Republicans had largely betrayed the conservative priuciples that defined their party in the post-Goldwater era; after ail, it was under a Republican presideut and congress that spending and debt came to record levels. Several incumbents and established Republicans were defeated in their primary fights, most uotably Mike Castle of Delaware, Linda Murkowski of Alaska, and Bob Bennett of Utah. With the aggregatiou of Republican primaries, the tea party had exercised a great deal of power, which made them a powerful new voice within the party. Come the general election, Tea Partiers throughout the nation began pouring money into several House and Senate campaigns. Their effects were most potent

321

in the Senate elections, though not in the The grass roots Turkish lobby way that Republicans had hoped. It can be in America is relatively new. said with near certitude that the tea party Though its influence is growing erased hopes of the Republicans taking on a yearly basis, it is still control of the United States Senate. U Several of the Tea Party favorites proved dwarfed by other groups to be too inexperienced, too ideologisuch as the plethora of cally extreme.P or just too weird 14 for the Armenian-American interest electorate. Yet, Tea Party activists would groups gladly sacrifice short-term political gains in exchange for having a more enduring effect on the party by tugging it in a more libertariau and rightward direction. Given the mixed results they had in 2010, their legacy may be in doubt. Turkish Interests in Congress Like most congressional elections, especially in economic hard times, foreign policy plays little to no role in shaping the American voting calculus. Additionally, since the most critical foreign policy decisions are under the purview of the Presidency; there will be far more continuity in Turkish-American relations than there is changes. However, Turkish interests will probably be affected in a few ways, some symbolic and some substantive.

What has dominated the headlines in the Turkish press is the non-binding House resolution requesting that the President refer to the plight of Armenians during World War One as genocide, which has repeatedly failed to reach the floor of the House over the past couple decades. Though it carries no force of law and has no substantive effect on public policy, it has attracted a great deal of attention from all interested parties due to its symbolic importance. Though the partisan divide on the issue is far from absolute, Republicans tend to be less inclined to support it. Most people believe the issue won't be tabled for the next two years and there will be no vote by the Foreign Affairs committee or on the House floor. Needless to say; there are far more important Turkish interests at stake in the US Congress, particularly in regards to military cooperation, aid, and commerce between the two natious. Though it is impossible to examine all these points, suffice it to say that hundreds of millions of dollars are at stake on a yearly basis in the budgetary process. To make a precise assessment of whether the interests of the Turkish government and people are best served by a Democratic or Republican controlled House would be difficult, again because these issues are never 133

The Congressional Elections 2010 and Turkish Interests in the Congress

DAVID 1. WILTSE

decided upon by strict party-line votes. However, we can get a sense of which party is more hospitable to Turkish interests by following the money of Turkish American interest groups and the organizational resources these groups have within Congress. The grass roots Turkish lobby in America is relatively new. Though its influence is growing on a yearly basis," it is still dwarfed by other groups such as the plethora of Armenian-American interest groups and the spending of the Turkish government in direct lobbying. 16 That said, the activities of the Turkish lobby are worth observing as a good proxy for where Turkish-Americans see their interests best served. The preeminent Turkish lobbying organization is the Turkish Coalition of America (TCA), established in 2007. Despite its recent formation, it has quickiy organized a political action committee (Turkish Coalition USA) that strategically dispenses campaign contributions to Congressional candidates under the strict limitations and reporting requirements of federal campaign finance law. In the two most recent election cycles, TC- USA donated approximately $278,000 to various House candidates. The partisan division of this money is skewed towards Republicans, but not terribly so, with a ratio favoring Republicans three to two. The giving also goes well beyond the Armenian genocide resolution, with only a handful of recipients (19 of the 82) sitting on the Foreign Mairs committee. Though the opposition to the resolution is important, it would seem to be a secondary issue. Those receiving the higher contributions are clearly targeted for their inlIuence on some ofthe most policy-relevant and powerful committees in the House. Several were from the Financial Services (of importance to Turkish business interests), Transportation (a powerful appropriator), Rules (procedurally critical to the operation of the House), Armed Services, Energy and Commerce, and the Defense Appropriation subcommittee. Though mouey does not buy policy, it certaiuly makes key policy makers accessible to donating interest groups. Conclnsion All told, the results in the midterm election of 2010 were hardiy surprising given the current political and economic climate ofthe United States. Any incumbent party presiding over a 10 percent unemployment rate can expect to lose a significant number of seats, particularly if they are of the presidential party. Though Republicans may have gained a few more seats in the House than many expected, this is hardly an unprecedented loss. It will uuquestiouably make it rather difficult for President Obama to pursue as aggressive of a legislative agenda as he did in

341

his first two years of office, but the elections haven't rendered him powerless Visa-vis the Congress. The month of December may offer a rather nice preview of what we might expect to see in the next two years. In a rare "lame duck" session of Congress," the President had an impressive string of political victories including a major tax law, ending the ban on homosexuals serving openly in the military, and the ratification ofthe New Start nuclear arms treaty with Russia. If this is how President Obama responds in the wake of an electoral defeat with a rather hostile Congress, we can certainly expect a degree of cooperation and productivity simi1ar to President Clinton. Moreover, no one should assume that this loss is a signal of a sure Republican victory in 2012. Following the midterm elections of 2006 and the general elections of2008 many Democrats in their own moments of hubris spoke of partisan realignments with Democratic majorities lasting decades. Just as those prognosticators were proven wrong in 2010, anyone assuming that President Obama or the Congressional Democrats are doomed in 2012 could be simllarly disappointed. If there is any word that aptly describes the American electorate at the moment it is "volatility;' something Turkish readers are no strangers to. The American voter is impatient and expects to see tangible results from their elected officials quickly, sometimes unfairly so. Typically, the party that controls the Presidency bears the brunt of that anger. Should the people's economic confidence begin to recover by 2012, President Obama will be well positioned for reelection; should it not; Republicans may well be competitive. But as many a failed presidential candida" can tell you> two years is an eternity. Endnotes 1. Again, the S:MD system coupled with the staggering of elections in the Senate allowed the Democrats to maintain their power in the Senate despite losing the overall share of the vote. This was largely due to several Republican incumbents winning rather lopsided elections while most Democratic incumbents won narrower races, and that only one third of the seats were at stake.

2. Lawrence J. Grossback, David A. M. Peterson and James A. Stimson, "Comparing Competing Theories on the Causes of Mandate Perceptions;' American lournal afPolitical Science, Vol. 49, No. 2 (2005), pp. 406-419. 3. Robert Dahl, "Myth of the Presidential Mandate," Political Science Quarterly, Vol. 105, No.3 (1990), pp. 355-72-

4. David Broder, a well respected "elder statesman" of the press and political columnist for the Washington Post, once noted that Washington is run by 536 political entrepreneurs: the president, 100 senators, and 435 house members. Each gets there essentially on their own: choosing the office to run for, raising their own money, funding their own campaigns, and staffing their campaigns with their own staff and volunteers. They are also willing to do anything retain office, up to and including running against their own political party and president if it ful:fi1ls their electoral ambitions (Broder 1989).

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DAVID L. WliTSE

5, RossDouthat, "The Unready Republicans;' The New York Times, November 10, 2010, retrieved fromhttp://www.nytimes.com/20l0/l1l08/0pinion/08douthat.html?_r=1&scp=8&sq=boehner%20 mandate%20nov%203&st=cse. . 6. For a survey of several models, refer to the symposium on the 2010 election in the summer ISSue of PS: PoliticalScienceand Politics, Vol. 43, Issue 4.

7.Alan 1. Abramowitz, "How Large a Wave? Using the Generic Ballot to Forecast the 2010 Mid~ term Elections;' PS:PoliticalScienceand Politics, Vol. 43, No.4 (2010), pp. 631-32. 8. Again, consider the myth of the electoral mandate. President Obama had an enormously suc-

cessful two years in Congress with impressive wins in health care, the economic stimulus package, funding renewable energy, financial regulations, GM and Chrysler bailouts, and public infrastructure. Nearly all of these were promises made in the campaign, yet upon delivery of these promises the electorate delivered a blow to his presidency by handing the house to Republicans. . 9. None of these victories were easily won. In the US Congress, party discipline in roll call votes ISfar lower than parliamentary systems simply because the power of nomination is not in the hands of the party, but in the electorate at large through the primary process. Couple this with the 60% margin necessary to close debate in the US Senate, a degree of bipartisan support is generally necessary. In practical terms, this meant President Obama had to secure every Democratic senator's vote or peal away a few Republican senators for each roll call. 10. Abramowitz, "How Large a Wave? Using the Generic Ballot to Forecast the 2010 Midterm Elections:' pp. 631-32. 11. Sarah Palin popularized the notion of "death panels" where bureaucrats would decide if patients would receive treatment. 12. In Florida, Kentucky, and Utah, Tea Party favorites won Senate seats. Though these were seats previously held by Republicans and they were a net wash for the balance in the Senate, it shOWed that some tea party candidates were viable in certain states. 13. Tea Party favorite Sharron Angle was the Republican nominee for Senate in Nevada taking on the majority leader Harry Reid. Angle made some rather strong statements with clear subtext that Violence directed at politicians was justified should the elections not go their way, in what she dubbed "Second Amendment solutions:' Had virtually any other Republican run for this seat, Reid would have most likely been defeated. 14. Another Tea Party candidate Christine O'Donnell, running for the Senate in Delaware, had appeared on television in the 1990s claiming to have "dabbled in witchcraft:' Eventually she had to run political ads explaining that she wasn't a witch, not an especially effective campaign tactic. I~ the primary she defeated a Republican that would have surely won the general election. On the mght ofher primary victory, manypohtical observers made note that her victory made a Republican talceover of the Senate very unlikely. 15. In June of20IO I appeared on a panel with Lincoln McCurdy, president of the TeA, and he generally agreed with this characterization I made of the current state of the Turkish lobby in America. 16. The spending of the Turkish government can be tracked through the reports filed in compliance"With the Foreign Agents Registration Act of 1983 (FARA). According to FARA disclosures, the 1'u~kish government spent $10,371,628.99 in direct lobbying through US firms from 2007 to 2009. ~s total does not include any additional cost encumbered by the diplomatic efforts of Turkish officials themselves, which is presumably quite high. 17. A lame duck session is a continuation of the previous Congress that takes place between the ele~tion and the formal creation of the new Congress in early January. Representatives and Senators typ1ca lly resent being called in the interim, making presidential deal-making that much harder.

36

Turkey's Response to the Global Economic Crisis M. iBRAHiM TURHAN* and ZUBEYiRKILIN<;:**

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urkey is among the few countries that were not affected from the . recent financial crisis as much as the advanced economies. Moreover, it has become one of the countries that got out of the economic downturn first. The reasons behind this strong response and quick recovery can be placed under two categories: low country risk premium and low currency risk The indebtedness ofboth private and public sectors were low compared to its peer countries and the foreign exchange positions of these sectors were very strong. Several different measures of the economy Can be considered while comparing the Turkish economy with its peers and show the Turkish economy's pre-crisis situation and its resilience to the financial downturn. These measures are leverage on households and the corporate sector, the public sector's debt level, and foreign exchange positions of individuals, the public and the corporate sectors. However,

,.. Central Bank ofthe Republic afTurkey, [email protected]

** Central Bank ofthe Republic of Turkey, [email protected]

137

Turkey's Response to the Global Economic Crisis

M. iBRAHiM TURHAN and ZUBEyiR KILINy

in each measure the number of countries is limited by reliability and availability of the data. Unlike its peers, the leverage ratios in Turkey for both private and public sectors, stayed at moderate levels during the period of excess global liquidity. For the private sector, households' indebtedness was kept below certain limits. Figure- 1 Figure 1: The ratio of household liabilities to GDP (2000-2009, percent) 70.00 0 ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

compares the ratio of household liabilities to gross domestic product (GDP) in Turkey and in the European Union and some of the Eastern European countries. Before the crisis, this ratio was very low in Turkey relative to the other countries. During the crisis, although this ratio had a tendency to increase among the Eastern European countries, it did not change in Turkey. Table I collects a larger set of countries and compares the ratios of consumer loans to GDP. Although the calculation techniques vary across countries, these numbers reflect the basic trends. The consumer loan to GDP ratio was the lowest in Turkey each year (except India and Indonesia for only a couple of years),

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The figure shows the ratio of consumer loans to Turkey's gross domestic product compared to the average of certain peer countries, including: Brazil, Bulgaria, Chile, Colombia, Czech Republic, Hungary; India, Indonesia, Malaysia, Mexico, Poland, and South Africa. 1he data is collected from Datastream. 2008 13,0 26,1 26,3 10,6 21,9 29,1 8,8 10,7 25,7 18,7 29,5 49,0 21,6 11,3

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The table collects the ratio of consumer loans to GDP. The source of the data is Datastream. As mentioned in the text, this is a very difficult data set to collect. Therefore, different ways of calculations are applied while building

this table. The differences in the calculations of the consumer loans are available upon request.

38

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The figure 2 illustrates Turkey's ratio of consumer loan to GDP and averages it out on a yearly basis in comparison to other countries during the pre-crisis period from 2000 to 2009, It is clear that Turkish consumers during the crisis only had a very low level of loans compared to the other countries. Although it is very difficult to find reliable data for corporate loans, the best approximations ofthe ratios ofloans to corporate sector to GD P are collected and illustrated in figure 3. The figure shows that the liabilities of the corporate sector in Turkey remained relatively low. One of the reasons behind the low levels of indebtedness of households and corporate sector was that banks were subject to additional capital adequacy requirements and hence not allowed to increase their leverage to toxic levels.

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Turkey's Response to the Global Economic Crisis

M. iBRAHiM TURHAN and ZUBEYiR KILING

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the Central Bank of the Republic of Turkey, Banking Regulation and Supervision Agencyand the Turkish Statistical Institute. The figure shows the ratio of corporate loans to Turkey's gross domestic product and its peer countries. TIlis is a very difficult data to measure. To be able to consistent we tried to collect all the data from one source: however, none of the major data sources have the data for a large set of countries. Therefore, we used the ratio of the credits from banks to non-financial sector to the GDP. The data for credits to the non-financial sector is taken from Datastream and the GDP is taken from IMF World Economic Outlook database. For some of the countries the data is gathered from their central banks.

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Along with the strong position of the Turkish economy led by the measures above, the real strength ofthe economy came from the management ofits foreign exchange risks. Turkey's foreign exchange position can be viewed as the most critical aspect of a small open economy. The overall position of the Turkish banking sector was balanced before the crisis. As shown in figure 5, before the crisis, the Turkish banking sector's net foreign exchange position is barely negative. Therefore, the Turkish banks were not fragile against a possible currency crisis. Moreover, since foreign currency denominated loans to individuals were prohibited and foreign currency deposits were not, Figure 5: Net foreign exchange position of the Turkish banking sector (2005:1-2010:3, million dollars)

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the five year period prior to 2008. As shown in figure 4, Turkey's public debt was already low prior to the crisis and its fiscal discipline was maintained during the turmoil. It is still below the Maastricht criteria, which states that the public debt to GDP ratio cannot exceed sixty percent. .

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After 2006, a tendency of increasing household indebtedness ,and corporate sector debt was observed in almost all countries. However, in Turkey since the monetary policy was not accommodative, neither excessive lending nor asset bubbles were observed. In Turkey, the public sector's debt level has been significantly reduced since 2002. 'Ihis was a result of the Turkish government's ambitious fiscal discipline. This discipline produced a primary surplus offive percent of GDP on average over 40

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households carried a significantly long position as a fallback (See figure 6). It was the corporate sector that carried a significant foreign exchange position, about 10 percent ofGDP (See fignre 7). However, since the duration of their assets was short, whereas the duration of liabilities was long, the short term position of the Turkish firms was almost balanced. The short term foreign exchange position of the corporate sector is depicted in figure 8.

141

Turkey's Response to the Global Economic Crisis

M. iBRAHiM TURHAN and ZUBEYiRKILIN<;

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The figure plots the CDS of Turkey and its peer countries, except India since the Indian CDS is not rated. According to the figure, Turkey's risk perception and CDS rate have been performing relatively better than the three Mediterranean euro members due to superior fiscal indicators. The data is collected from Bloomberg.

"

The figure shows the foreign exchange position of the non-financial sector in Turkey. The data is taken from the Central Bank of Turkey.

All of these measures of the domestic economy are summarized by the two indicators to evaluate the country's overall performance and risk. These indicators are the credit default swap index (CDS) and the emerging markets bond index (EMBI). Figure 91 plots the daily CDS of the countries, According to that figure, Turkey's risk premium sustained a stable course, which is a result ofits solid finan42

600 400

cial system and low levels of indebtedness, although the country has lower credit ratings. As the concerns regarding fiscal sustainability in the Euro Area continues, CDS premium of Hungary, Bulgaria and Romania stay higher than other Central and Eastern European countries. The EMBI-Global is presented in figure 10' and it shows that Turkey's risk premium remains lower compared to the other emerging economies. Risk indicators of Turkey follow a parallel path with the Latin American countries, except Argentina.

143

M. iBRAHiM TURHAN and ZOBEY1RKILIN y

Turkey's Response to the Global Economic Crisis

Figure 10: The emerging market bond index (bps)

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Finally, the government seems to be very determined in keeping fiscal discipline as tight as necessary while not being excessive. It announces a Medium Term Program regularly every year that covers the projected economic and fiscal outlook for the next three years. According to the most recent program, Turkey's budget deficit will fall below the Maastricht criteria (3 percent) next year and public debt ratio will decline more than 6 percentage points to 37 percent in 2013, lower than the pre-crisis level.

Endnotes

--·-:1'01""'"

The figure draws the EMBI-Global index for Turkey and its peer countries. There are two EMBI data sets. One of them is presented here and the other-Is designated as EMBI+. The main difference between these two Indices Is the criteria in the country selection. The reason of our choice is the number of countries included. The former index includes more countries than the latter. The data is taken from JP Morgan.

I. Although the figure cannot be read perfectly; the thickest line belongs to Turkey and it conveys the main message. All data is available upon request.

2. See the previous footnote.

Low leverage and low currency exposure became a major source ofstrength that contributed to the resilience of the Turkish economy to the global crisis. Here, we should mention a few policy decisions, which were made and will be applied by the Central Bank of Turkey and the Turkish government. The financial environment is stili challengiug and this situation is likely to persist in the foreseeable future. Therefore, the Central Bank continues to focus on financial stability and shapes its policies based on three principles. The first one is to discourage excessive leverage and to keep the banks and corporate sector's debt ratios at modest levels. To that end it raised the required reserve ratios in Turkish lira liabilities and stopped remuneration of required reserves. It also enacted a technical adjustment in the policy rates to encourage better liquidity management within the banking system and to reduce the dependence of banks on the Central Bank's lending facilities. The second issue is strengthening the foreign exchange position of both the public and private sector. The Central Bank made a significant change in the method offoreign exchange buying auctions in late 2010 and accelerated the pace of reserve accumulation. It now applies a higher required reserve ratio for foreign exchange liabilities and has increased that ratio recently. The Regulatory and Supervisory Agency and the Central Bank also apply various rules and mechauisms to keep foreign

441

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Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique ZiYAONi~'

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Turkish foreign policy activism over the last couple ojyears have attracted remarkable international attention. Some -pundits have attempted to place Turkeys increasing relations with its neigh~ors within the C()lltext ofan ideological and identical reshuffling of Turkish foreign policy principles. While finding the "shift ofaxis" arZU111:ent a rather crude characterization, the paper nevertheless argues that there are subtle shifts in Turkish.foreign policy

orientation.In this context, the poper aims to identify both the elements of continuity and rupture in the style

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and be~avi{)ro!T1:lrkis~for~ig1'l' po!icyjnfact, the!€ are·s~lidpoliti~al economyfundamentals and legitimate reasonsjor Turkey to pursue a multidimensional c:nd111.ore assertive foreign policy in the emerging multi-polar world system. However, the present paper underlines that Turkey's mUlti-dime~~on~fto~eign,_ policy activism with no firm axis -may have potentially counterproductive consequences regarding Turkey's longterm national interests as well as its ability to playa stabilizing role a

T

h e Justice and Development Party (Adalet ve Kalkmma Partisi, the AKP) government's foreign policy activism is not a new phenomenon.' Yet, the changing nature of the foreign policy activism during the second term of the AKP, especially with Ahmet Davutoglu assuming direct responsibility as the new foreign minister in May 2009, has attracted widespread attention, has become a topic for vivid public debate both in domestic and international circles and has already generated a large literature. In domestic discussions of the AKP's recent foreign policy approach, frequent references are made to "a shift of axis': suggesting a drift away from the predominantly Western orientation which has been the hallmark of Turkish foreign policy throughout the post-World War 2 period, toward a more «eastern-oriented" pattern offoreign policy behavior. This present paper examines the validity of the claim that there has been a striking shift in the main axis of Turkish foreign policy in recent years.

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. . Department oj InternationalRelations, Ko{: University, zanisepku.edu.tr

147

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While finding the "shift of axis" argument a rather crude characterization of recent foreign policy behavior, this paper nevertheless argues that subtle shifts in Turkish foreign policy orientation- can indeed be identified.' There are certainly new and distinct elements in the post2007 era that contrast sharply with the earlier wave ofthe AKP's foreign policy activism. Certainly, Turkish foreign policy has become more independent and assertive in recent years, raising the question of whether Turkey is moving in the direction ofthe BRICs (the country group that includes Brazil, Russia, India and China) which are increasingly assuming a more active role in the changing global environment, particularly in the aftermath of the recent global financial crisis."

From a long-term perspective a multi-dimensional foreign policy activism with no firm axis may have potentially counterproductive consequences

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Rather than arguing that there is a totally new line of foreign policy, this paper aims to identify both the elements of continuity and rupture in the style and behavior of Turkish foreign policy. While the emphasis of this paper is on discontinuities and ruptures, it is important to state from the outset that there are striking continuities that should not be disregarded. For example, it would be simply wrong to cla_im that the country's Western orientation has been entirely reversed during this era. The fact that relations with the European Union (EU) are currently at a stalemate should not be interpreted as the termination or the reversal of Turkey's European integration process. Turkey is already deeply integrated into the ED in the economic, political and cultural realms and the integration process is an-ongoing process." Likewise, Turkey's Europeanization route, in the sense of the continuation of the domestic reform and democratization process, is very much alive, as the September 2010 constitutional referendum clearly shows. Similarly, relations with the United States have been steadily improving in recent years following the serious disagreements that emerged as a result of the March 2003 Iraq war. Turkey and the United States continue to co-operate, although there are serious differences on a number of controversial issues, notably relating to Iran's nuclear program and the resolution of the Israeli-Palestine conflict. This paper also attempts to underline the various factors that have contributed to the observed shifts or discontinuities in recent Turkish foreign policy. Economic, security and identity factors have to be collectively considered to provide a coherent explanation. This paper also evaluates the effectiveness ofthe new style of foreign policy behavior by focusing on the dichotomy of short-term gains ver-

". I

Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique

sus long-term consequences. There is no doubt that the new-style foreign policy activism has helped enhance the popularity ofthe AKP in domestic politics. Similarly, the new policy stance has been greeted with enthusiasm in many countries ofthe Middie East and the Arab world. From a long-term perspective, however, a multi-dimensional foreign policy activism with no firm axis may have potentially counterproductive consequences regarding Turkey'slong-term national interests as well as its ability to playa stabilizing role as a pro-active and benign regional power. Moreover, certain dimensions ofthe new-style Turkish foreign policy raise some ethical questions which need to be explicitly addressed. For effective foreign policy making it needs to be recognized that there are trade-offs associated with different choices, and that a multi-dimensional foreign policy-has to rest on a set ofpriorities. A related criticism of recent Turkish foreign policy concerns its overconfidence and over-assertiveness without taking into account the trade-offs and the possible long-term negative ramifications of decisions made in the current international environment.

Turkish Foreign Policy in the Post-ZOO? Era: Elements of Continuity and Rupture An active foreign policy approach has been a central feature of the AKP government and in certain respects there is a strong degree of continuity between its first and second terms in office (Table 1). To some extent, this continuity is inevitable given that two key individuals, Abdullah Giil and Ahmet Davutoglu, continue to play important roles in Turkey's foreign policy initiatives, with the qualification that there was a dramatic shift in the roles of these two individuals in the post-2007 era (Table 1). A degree of continuity was also evident given that EU membership and a commitment to the Western alliance were long-established state policies which would be very difficult to reverse by a single government. Moreover, it would be wrong to equate foreign policy activism exclusively with the AKP government. Elements of an active foreign policy approach in Turkey could be discerned throughout the post-Cold War era starting with Turgut Ozals presidency in the early part ofthe 1990s. The foreign minister ofthe coalition government between 1999 and 2002, Ismail Cern, also favored a multi-dimensional, pro-active foreign policy, yet with a finn Western commitment." The early foreign policy of the AKP clearly represented a continuation of the pattern established during the coalition government that had as its principal partners the left -of-center Democratic Left Party (Demokratik Sol Parti, the DSP), the ultra-nationalist Nationalist Action Party (Milliyetri Hareket Partisi, the MHP), and the right-ofcenter Motherland Party (Anavatan Partisi, the ANAP). Indeed, relations with

[49

Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique

been a clear tendency act independently of the alliance, especially in relation to major regional and international conflicts

the Middle East started to improve from 1999 onwards and important initiatives designed to build economic and diplomatic links with Russia and the post-Soviet republics can be traced to the early

Elements ef Continalty

Foreign Policy Style

Multi-dimensional foreign policy with an emphasis on soft power.

Western Ol'ieotation and Commitment to the EU

A commitment to Western a orientation and ED membership, with the qualification that there is a pronounced decline in enthusiasm for ED membership, parallel to the striking decline in public support for EU membership which started between 2005 and 2007.

Regional and Global Role

Attempts to playa more active regional and global role with particular emphasis on helping to promote cross-cultural dialogue and performing a mediating role In major regional and international conflicts.

1990s.

Throughout the AKP era, there has been a constant emphasis on the use of soft power, an improvement of relations with all neighboring countries, aptly summarized by the motto "zero problems "With neighbors;' as well as the vision of a more ambitious role for Turkey as an active regional and global power extending well beyond the realm of favorable bilateral relations (Table 1). In addition to the Europeanization drive, the greater Middle East has also become a focal point of Turkey's diplomatic efforts in this period. Perhaps the term the "Middle Easternization of Turkish foreign policy" might be somewhat exaggerated given that there has been a very strong impetus throughout this period to develop bilateral relations with, in particular, the Russian Federation, as well as other key countries in the Caucasus and opening up to the African continent and Latin America." The Middle East and the Arab world nevertheless have become the focal point of Turkish foreign policy efforts (involving both formal initiatives as well as the informal activities of the NGOs) which is quite extraordinary by the standards of previous Turkish governments. A closer inspection of the second phase of the AKP government, however, reveals certain ruptures in the style of Turkish foreign policy activism. Arguably, what has distinguished the second phase from the previous phase has been a pronounced weakening of the commitment to EU membership-if not in rhetoric, in reality-and an increasingly assertive and confident foreign policy which reflects a desire to act as an independent regional power (Table 1). To be fair, Turkish foreign policy has continued to be framed and implemented in a spirit ofmultilateralism in line with established international agreements and institutions. Yet there has been a clear tendency to act independently of the Western alliance, especially in relation to major regional and international conflicts. In retrospect, three key episodes could be identified which adds substance to the claim that there has been a subtle shift in Turkish foreign policy during the recent era, or, at least, a rather different style of foreign policy activism as compared to the previous patterns.

The first episode which clearly constituted a striking turning point was the Davos episode in January 2009 where the Prime Minister Recep Tayyip Erdogan offered a vocal critique of the Israeli actions during the war in Gaza and stormed 50

Table I: Turkish Foreign Policy in the Post-Z007 Era: Elements of Continuity and Rupture

Style ofMediation

Leadership Style ofFol'eign Policy and Ownership

Linkages between Domestic Politics and Foreign Policy I

Elements of Rupture A more independent and assertive style of foreign policy. There is an unprecedented increase in the scale of diplomatic activity. In line with the underlying global shifts, notably during the global financial crisis foll0-:m g th~!~~~teps o~BRIC:s is seen' as an mcreasm attractive 0 non. Continued commitment to a Western orientation and ED membership in rhetoric. But, in reality, a tendency to act Independently on a number of key foreign policy issues has become more visible even though this may result in direct confrontation with Western cowers. Turkish foreign policy is more active in regions such as the "MiddleEast where there is ample scope to playa regional leadership role. Turkish foreign policy is less active in regions such as the Balkan and the Central Asia where the scope for regional leadership is more limited and would be contested by powerful rivals. This suggests that the quest for regional leadership has become a major motive underlying the new Turkish foreign policy. The "MiddleEast (including North Africa) has become a focal point in Turkish foreign policy efforts suggesting that there is a strong identity dimension implicit in the new Turkish foreign policy. Similarly, Turkey has become a more active actor in peacekeeping operations and humanitarian interventions, especially in Afghanistan and in the Balkans.

Zero problems with all neighbors strategy; a serious attempt to "an attempt to maintain neutrality/impartiality" in regional conflicts.

A tendency to take sides in regional conflicts such as a pro-Palestine position in the Israeli-Palestinian conflict and a pro-Iranian position in the conflict involving the West over the threat posed by Iran's nuclear program. This aspect of Turkish foreign policy arguabiy places limits on Turkey's role as a referee or mediator in major international conflicts.

Leadership is important with Abdullah Oill playing an important role as the minister for foreign affairs, complemented by Ahmet Davuroglu as the intellectual force behind the scenes. Civil society involvement in foreign policy initiatives becomes increasingly important and parallel to the democratization of foreign policy; public opinion assumes greater weight in shaping key foreign nolicv decisions.

Even stronger leadership and ownership of foreign policy with Ahmet Davutoglu in the driving seat and Abdullah OuI as an unusually pro-active president in external affairs. The linkages between foreign policy and domestic politics have become more striking. The government is much more willlng to use foreign policy initiatives as a strategic tool for consolidating and extending its domestic coalitional base.

I 51

ZiYAONi~

I

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out of a meeting at the World Economic Forum. The episode clearly marked a shift in the sense that Turkey came out openly in favor of the Palestinian cause at the expense of jeopardizing long-entrenched bilateral economic, diplomatic and security relations with Israel." Following Davos, Turkey's more cautious mediator role seems to have been replaced by a new policy line which involved taking active sides in major disputes (Table 1). The Davos episode was clearly not a oneshot affair. After Davos, Turkey has continued to be progressively more vocal of Israeli actions resulting in unprecedented decline in bilateral relations. The Davos episode also illustrated the fact that the traditional secular foreign policy elites of Turkey, in other words the traditional foreign policy bureaucracy; were increasingly marginalized in fbe formulation and implementation of foreign policy. Turkish-Israeli relations further deteriorated with the infamous "Mavi Marmara (or Flotilla) crisis" on May 31, 2010, when, in international waters, fully equipped Israeli soldiers stormed a passenger ship, the Mavi Marmara, the largest of a flotilla of six boats carrying humanitarian aid to besieged Gaza. The operation left nine activists dead, eight of whom were Turkish citizens, and over 30 activists wounded.' Immediately after the crisis, Turkish officials openly condemned Israel for carrying out "state terrorism" and Turkish-Israeli bilateral relations were reduced to fbe lowest point in history."

Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique

an international conflict, this was clearly A more independent and a case where Turkey was acting indepenIMF-free path in the economic denty and against fbe interests of the sphere appeared. to constitute a Western alliance. Indeed, the negative vote at fbe Security Council created the natural counterpart or corollary grounds for significant criticism from of a more independent and US President Barrack Obama. Alfbough assertive style of foreign policy fbe episode did not lead to a breakdown in relations with the United States and the EU, it certainly was an important episode in fbe growing perception in the Western community fbat Turkey was progressively moving in a different direction. Explaining the Subtle Shift in Turkey's Foreign Policy Orientation: A Multi-Dimensional Approach

The third episode when a similar line of activism was evident was Turkey's attempts to find an internationally acceptable solution to the dispute involving Iran and fbe Western alliance over fbe Iranian nuclear program. Turkey displayed an unusual degree of pro-activism during the course of 20 lOin its quest to find a diplomatic solution to fbe problem. During fbis period, Turkey along with Brazil emerged as key countries pushing for an agreement fbat would replace the need for sanctions on Iran. Accordingly, Tehran was convinced by Turkey and Brazil to sign an agreement on a low-enriched nuclear fuel swap in May 2010. With the agreement signed by Turkish Foreign Minister Abmet Davutoglu, Brazilian Foreign Minister Celso Amorim, and Iranian Foreign Minister Manuchehr Motaki, Iran committed to send 1,200 kg of3.5% enriched uranium to Turkey in exchange for 20% enriched uranium from Western countries. However, the Vienna Group, the EU, and the Obama Administration were skeptical of fbe Tehran Agreement and United Nations Security Council subsequently approved fbe fourth sanctions package on Iran.

Several influences collectively explain the more independent and assertive style of Turkish foreign policy associated with the post-2007 era. Leadership and ownership offoreign policy could be a natural starting point. Although fbere is no doubt that Abmet Davutoglu was a key figure in fbe formulation ofthe AKP's foreign policy during fbe party's early years in office, his influence has become much more prominent as he has become the person directly responsible for the formulation and implementation of foreign policy during fbe second phase. His "strategic depth" perspective, which highlighted the pivotal regional and global role of Turkey as a "central country'; has become fbe guiding principal of major foreign policy initiatives during this period. In addition, one needs to take into account fbat Abdullah GiiI, as fbe new president, has also played a critical role in Turkey's pro-active foreign policy initiatives, of which fbe opening up of negotiations wifb Armenia constitutes a striking example. In a way, Abdullah GiiI has contributed to Davutoglu's initiatives by acting as a complementary de facto foreign secretary. Indeed, Abdullah Giil's interest and activism in foreign affairs is in sharp contrast with the previous president, Ahmet Necdet Sezer, whose activism was primarily confined to issues of domestic politics." In addition to GiiI and Davutoglu, Prime Minister Erdogan has also played an important role in Turkey's foreign policy initiatives in fbis period. It would not be possible to explain the scale of activism in Turkish foreign policy during this period without taking into account fbe roles played by key personalities in terms of shaping fbe new foreign policy vision.

Turkey's active rejection of the proposed sanctions on Iran at the United Nations Security Council in June 2010 marked fbe ultimate episode in this dramatic chain of events." "While Turkey was genuinely seeking an alternative solution to

It is also clear fbat the disappointments encountered on fbe pafb to EU membership played a decisive role in the refbinking Turkey's foreign policy priorities. The ongoing debate in Europe on the European identity of Turkey and fbe

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153

Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique

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Turkey's new regional initiatives, especially towards the Middle East, North Africa and the post-Soviet region, have had strong economic motives.

blockage of key chapters during the accession negotiations process due to deepseated differences between Turkey and the EU in relation to the Cyprus dispute has raised major question marks concerning the feasibility of Turkish membership." The negative signals coming from the core of the EU, such as Germany and France, and frequent pronouncements by influential leaders such as Angela Merkel and Nicholas Sarkozy concerning the obstacles to Turkish membership purely on the grounds of culture and identity have helped to precipitate a serious nationalistic backiash in Turkey. Certaiuly, enthusiasm for EU membership has been significantly dampened both at the elite level and at the level of the public at large. Opinion polls have clearly indicated a sharp swing involving a dramatic decline in public support for EU membership." In a way, the AKP government has been reacting to the changing nature of public opinion. If EU membership was not on the cards, then Turkey would need to search for serious geo-political alternatives. The dramatic changes taking place in the broader global context has also exercised a crucial influence over the perception of policy makers. The global economic and financial crisis of 2008-2009 was ultimately a "crisis of the center'; in

541

~

contrast to the frequent crises which had Foreign policy in Turkey is occurred in the semi-periphery of the no longer the monopoly of global system during the course of the politicians and diplomats. It has 1990s. From this point ofview, the global been increasingly driven from financial crisis presented a major politibelow by key economic and cal economic challenge to the Americanor Western-dominated globalization. civil society actors The crisis, moreover, accelerated the shift which had already started, namely a shift ofthe economic axis ofthe global system from the "west" to the "east" or from the "north" to the "south". BRIC countries in general and China in particular, emerged even stronger from the global financial crisis." In contrast, the EU appeared to be a major loser of the global economic crisis, at least from a short-term perspective. Many countries in the European periphery, notably Central and Eastern European countries and Greece, encountered drastic economic turmoil and downturns in economic performance. The West, especially the EU, turned out to be a less attractive destination in terms of purely economic benefits while the rising "East" or "South" appeared to be increasingly more attractive in terms of future trade and investment. Furthermore, two important developments closely associated with the global financial crisis helped enhance the confidence and assertiveness ofTurkish policymakers. First, the global crisis created an impetus in favor ofthe broadening ofthe . global governance structure. The G-20 replaced the G-8 as the key organizational nexus in debates concerning the future of global finance and global economic governance. Turkey, as a member of the G-20, now had the opportunity to be an active participant in the process of shaping the new rules and institutions of the . post-crisis global economy, as opposed to its previous role as a peripheral partner and the passive complier of the rules imposed from above by the powerful core countries of the north. Second, Turkey, with a much better regulated banking and financial system in the aftermath of the 2001 crisis, managed to avoid the typical financial and balance of payments crisis which it had frequently experienced in the past. Consequently, it was not in direct need for the IMF assistance. The AKP government capitalized on Turkey's new found economic strength. While negotiations with the IMF continued as a tool of expectations management, the final new deal between Turkey and IMF was continuously delayed and eventually no agreement was signed. The government used this as a sign of national strength and autonomy. Indeed, a more independent and IMF-free path in the economic sphere appeared to constitute a natural counterpart or corollary of a more independent and assertive style of foreign policy;"

155

ZiYAoNi~

Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique

The AKP's foreign policy activism has proven to be a major asset in domestic politics. It has helped the party maintain its popularity at a time when the country was clearly exposed to the negative effects of the global financial crisis

The global crisis has also strengthened efforts in the search for new mar-

kets at a time when the EU as Turkey's leading trade and investment partner was

experiencing

major

difficulties.

Clearly, Turkey's new regional initiatives, especially towards the Middle East, North Africa and the post-Soviet region, have had strong economic motives. Ac-

tive foreign policy towards neighboring countries has been clearly motivated by the desire to reach new markets. Arguably, the global financial crisis has helped to accelerate the transnationalization of small- and medium-sized business in Turkey, notably from the rising centers of Anatolian capital.'? Indeed, key civil society organizations representing the afore-

mentioned rising centers of industrialization and capital accumulation in Turkey,

such as TOBB, MuSiAD and TUSKON, have emerged as central actors in Turkey's foreign policy initiatives. Foreign policy in Turkey is no longer the monopoly of politicians and diplomats. It has been increasingly driven from below by key economic and civil society actors." In other words, economy and trade has turned out to be the practical hand of Turkish foreign policy. The impact of new foreign policy initiatives aimed at a diversification of Turkey's external relations is clearly

reflected in the changing pattern of foreign trade, pointing towards a decline in Figure 1: Turkey's Shifting Trade Patterns in the Global Financial Crisis Era 60 50

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The AKP leadership has been particularly effective in using pro-active foreign policy as a tool for projecting its "globalist" and progressive image

18.8% to almost 30% in the same period (Figure 1). It is vitally important to note that the shift in trade started well before the global financial crisis, which implies a structural transformation. Moving beyond the sphere of economics, considerations relating to culture

and identity, which are seen as a crucial part and parcel of Turkey's "historical depth" by the Turkish foreign minister, have also been seen to be important elements in Turkey's new policy orientations. The AKP, with its Islamist roots, was

naturally receptive to developing strong cultural, diplomatic and economic links with the Arab Middle East and the Islamic world in general. Likewise, Arab countries were more welcoming of developing closer relations with Turkey under an AKP government with its brand of conservative modernization. Arguably, a more

secular government led by the Republic People's Party (Cumhuriyet Halk Partisi, the CHP), for instance, would not have experienced the same degree of popularity in the Arab or Muslim worlds. The AKP's foreign policy activism has proven to be a major asset in domestic politics. It has helped the party maintain its popularity at a time when the country was clearly exposed to the negative effects ofthe global financial crisis, which was inevitably transmitted to the Turkish economy in terms of a contraction of output

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and rising unemployment. The assertive and independent style of foreign policy making has had an appeal to nationalistic sentiments going well beyond the religious conservative core which had previously constituted the backbone of the AKP's support. Prime Minister Erdogans championing of the Palestine cause and his criticism of the atrocities of the War in Gaza echoed the sentiments of a large majority ofthe Turkish population. The AKP's foreign policy approach was therefore in line with the changing mood of public opinion. Hence, what we observe in the recent Turkish context is that domestic politics has become heavily intertwined with foreign policy, and foreign policy has emerged as a major instrument for gaining a competitive edge in domestic politics. The AKP leadership has been particularly effective in using pro-active foreign policy as a tool for projecting its "globalist" and progressive image and thereby gaining advantage over its principal "defensive nationalist" rivals, the CHP and the MHP. The two principal opposition

157

ZiYAONij

their limited and inward-oriented policy visions, have not been in a position to contest the ambitious foreign policy agenda which has also brought the governing party considerable popularity in the domestic political sphere." The Consequences of Turkey's More Assertive and Independent Line of Foreign Policy: Short-term Gains versus Long-term Ramifications It should be stated at the outset that many aspects of Turkey's foreign policy activism in recent years is a positive development and represents a perfectly legitimate response to the changing domestic and global environment. A more confident Turkey, which is stronger in terms of its economic and democratic credentials' is trying to come to terms with its multi-dimensional historical heritage and desires to playa more active role in shaping regional and global developments. In addition, it is a perfectly rational strategy to develop close ties with neighboring countries and to develop ties on the grounds of common economic and security interests as well as cultural proximity. The changing contours of globalization, especially in the economic realm.also calls for a more diversified set ofrelationships. A totaliy opposite version of the current strategy would be focusing on the West at the expense of the rest. This would be an inappropriate response and involve a major failure to capitalize on Turkey's significant geo-political assets. Indeed, following the end of the Cold War, successive Turkish governments have attempted to develop a pro-active strategy towards Russia and the post-Soviet region, the greater Middle East and the Balkans. From this point ofview, foreign policy activism in Turkey is not a novel phenomenon and certainly predates the AKP and the Davutoglu era. Turkey clearly possesses the economic, political and the cultural elements necessary to perform the role of a benign regional power and serve as a role model for many of the countries in neighboring regions.

With these qualifications in mind, there are nevertheless certain aspects in the style of foreign policy activism practiced especially during the later years of the AKP government that merit close inspection and deserve critical judgment. There are certain inconsistencies in the way that foreign policy activism is practiced which may have significant positive pay-offs for the government in the domestic political arena, but which nonetheless may be counterproductive in terms ofTurkey's long-term national interests. The first major criticism is the absence of a firm axis around which the multidimensional and pro-active foreign policy is structured and anchored." The commitment towards a Western orientation and, as a naturally corollary, to ED membership has lost much of its momentum in spite of the frequent rhetoric on the

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Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique

part of key policy makers that EU memThere is a need to maintain bership still remains a key priority of commitment to the Turkish foreign policy. As argued earlier, EU membership process in this is to some extent understandable spite of the manifold problems given the negative mood in Europe and the backlash to this in Turkey both at the that are likely to be encountered elite level and among the citizens at large. on the way There is a need to adopt a long-term perspective on this issue and maintain commitment to the ED membership process in spite of the manifold problems that are likely to be encountered on the way. It needs to be recognized that there is a fairly strong pro-Turkey coalition at the elite level within the EU and this coalition may grow over time in line with Turkey's economic development and democratic consolidation. There is also a need to recognize that a major part of the attractiveness of Turkey to its various neighbors derives from its potential EU membership and its on-going Europeanization process. In the final analysis, both the transformation of the Turkish economy and the consolidation of democratic credentials in Turkey over the last decade were facilitated and catalyzed by the EU membership process, which has in turn underpinned Turkey's role as a model in the eyes of neighboring countries." At the moment, there is a certain inconsistency in Turkey's style of foreign policy activism which is clearly noted by foreign observers. In spite of the inherent : problems in the negotiation process, Turkey is still formally a candidate country. At the same time, it seems to be implementing a unilateral foreign policy style and behaving as a kind of independent regional power rather reminiscent of the democratic members of the BRICs, namely Brazil and India, in their respective regions. The same kind of foreign policy activities could be framed in a different language and could be promoted as a common agenda for the EU by a future member state. Turkey's ambitions to play the role of a benign regional power in its neighboring environment could be perfectly consistent with a Western orientation and future EU membership. Indeed, Turkey's cultural and economic assets could allow it to playa central role as part of the European neighborhood policy in the Middle East, the Balkans and the post-Soviet world which the EU would be far less equipped to play in Turkey's absence. If there is a commitment to ED membership on the part ofTurkish politicians or policy makers, there should also be a commitment towards acting with the rest of the world on issues of common concern. This, in turn, requires a more multilateral, as opposed to unilateral, approach and a certain degree of self-restraint in the way that foreign policy activism is put into practice.

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Tomake the argument more concrete. one may consider Turkeys self-imposed international conflicts, referee role in major regional and interL urkey could contribute national conflicts. Two critical points to further instability as an deserve emphasis in the present context. unintended consequence First, Turkey has the potential to play an important mediating role in key internaofits actions tional conflicts." However. its ability to play this role in a unilateral manner is considerably limited given the economic and diplomatic resources at its disposal. Second, and more significantly, its ability to playa mediating role rests on adopting a neutral position with respect to contending parties. A country cannot claim to be a mediator and take sides in a major conflict at the same time. In the post-200? context, this is exactly the problem that Turkish foreigo policy faced. By adopting active pro-Palestine and pro-Iran positions in these respective conflicts, Turkey progressively lost its ability to play a constructive role as a mediating power. Indeed. by taking sides in key regional and international conflicts, TUrkey could contribute to further instability as an unintended consequence ofits actions.

Even more problematic was the approach towards the Iranian nuclear program, a policy which mayhave significant long-term negative repercussions for Turkey's relations with the West, taking into account the fact that there: is a far greater degree of convergence among the American and the European positions as far as the security threats posed by Iran's nuclear program are concerned. Again, it would have been quite legitimate for TUrkey to propose a different style of engagement with Iran while remaining firmly within the Western alliance. Instead, Turkey preferred to act more independently and pro-actively by going along with Brazil and sigoing a trilateral agreement with Iran. Leaving aside the technical merits of the agreement, which is beyond the scope of the paper, the agreement and the subsequent "no" vote against the proposed sanctions against Iran in the UN Security Council were clearly interpreted as obvious signs of Turkey's shifting course away from the West. The costs of signing such an agreement for Brazil might be minimal. Yet, given the regional context in which it is located and the nature ofits organic ties to the Western alliance, the costs to Turkey might be considerable. In the medium-term, Turkey may find itself increasingly squeezed between Iran and the West. which may lead to a state ofisolation, again an unintended consequence of an excessively assertive and over-confident foreign policy.

Consider the case of the Israeli-Palestinian conflict. Here, many of Turkey's concerns are shared by European elites and the public opinion at large. Indeed, there has historically been a notable divergence in the European and American approaches to the conflict with the Europeans expressing considerable sympathy to the Palestinian position. Much of the criticism concerning the human costs of the war in Gaza voiced by Prime Minister Erdo gan at the Davos Summit could have been framed in a different language. A different style of foreign policy activism by calling for joint action with European and international actors would have been much more consistent with Turkey's aspired mediator role. There is no doubt that the Davos episode helped to enhance the popularity of the prime minister in Turkish domestic politics, in the Arab world, and even among segments of the public in European countries. However, his explicit championing of the Palestinian cause as part of an anti-Western, third world-leader style rhetoric did not help the cause of mediation efforts. At the same time, it inevitably led to a significant deterioration in the historically robust Turkish-Israeli relationship. After the recent "Mavt Marmara crisis" was added to the wobbling relationship, Turkey's mediating role further deteriorated. This point is underlined by the Syrian president, Bashar al-Assad, who said that "if the relationship between Turkey and Israel is not renewed, it will be very difficult for Turkey to playa role in negotiations.?"

Turkey's foreign policy towards Iran raises an even deeper problem concerning the ethical basis of its foreign policy. U It is perfectly legitimate for Turkey to engage with an important neighbor such as Iran on economic, security and cultural grounds. Yet this has to be conducted in a more balanced and reserved manner, especially taking into account the authoritarian nature of the Iranian regime which is at the same time facing major tests of its legitimacy in the domestic sphere. IfTurkey happens to be one ofthe first countries to congratulate President Ahmedinejad for its electoral victory, this raises important question marks concerning its commitment to international norms and democratic values. A similar concern was voiced during the visit of the Sudanese leader, Omar al-Bashir, to Turkey, given his notorious background in terms of human rights violations." These highlight the important point that there are certain trade-offs in foreign policy. A multi-dimensional foreign policy needs to be based on a clearly defined set ofprinciples; otherwise major inconsistencies are likely to arise which in turn may be detrimental to the country's long-term national interests.

j3yt~l
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Concluding Observations From a global perspective, recent changes in Turkish foreign policy highlight two striking developments. First, the changing nature of globalization in the direction of a multi-centric, more pluralistic global order-a pattern that was acceler-

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Multiple Faces of the "New" Turkish Foreign Policy: Underlying Dynamics and a Critique

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ated by the global financial crisis which has represented a clear challenge to American and Western hegemony-has paved the way for the BRICs or the near BRICs like Turkey to playa more active role in regional and international affairs. Second, the distinction between foreign policy and domestic politics has become increasingly blurred. This has two major implications. Foreign policy has become a heavily contested issue in domestic politics and can turn into an important tool for a political party to gain a competitive advantage over its rivals. Identity conflicts in domestic politics can have far-reaching repercussions on the conduct and orientation of foreign policy. Both of these general points apply neatly to Turkey. There is no doubt that the AKP has capitalized on its pro-active foreign policy to maintain and consolidate its broad electoral success in domestic politics. Likewise, the AKP's underlying conservative-religious identity has also been reflected in the spirit of the new Turkish foreign policy in the context of deepening relations with the Arab Middle East and active support for Palestine and Iran in major regional and international conflicts.

Over-assertiveness and overconfidence in international affairs can have significant pay-offs in the short term but can also be detrimental to national interest and to lead to isolation in the long term

Turkey's willingness to pursue a pro-active foreign policy rests on legitimate foundations. During the post-Cold war era, Turkey has been rediscovering its neighbors and trying to capitalize on its geo-political position in three dlstinct, yet interlocking regions. This process of re-discovery has been proceeding at an increasingly faster pace during the AKP era. Furthermore, there are solid economic reasons for a pro-active foreign policy strategy. Turkey has dearly been responding to the changing global context which involves a diversification of economic relations and the opening of new markets, especially at a time when Europe is faced with deep stagnation and the global economic axis has dearly been shifting in the eastern direction with the global financial crisis. What we currently observe is a process involving the transnationalization ofAnatolian capital which has been trying to take advantage ofthe opportunities offered by the Middle East and the North Africa as well as Russia and the broader post-Soviet space. Moving beyond narrow self-interest in economic and security terms, Turkey has the soft power, given its stage of economic and political development, to perform the role of a benign regional power, and to take an active role in global affairs. Turkey has, indeed, been unusually pro-active in recent years in terms of attempting to playa mediating role in regional and international conflicts, contributing to humanitarian aid and peacekeeping operations, as well as taking part in discussions relating 62

1

to the future of the global economic and security order in the context of global fora such as G-20 and the UN Security Council. At the same time, however, certain aspects ofTurkey's recent pro-active foreign policy are open to serious criticism. What is at stake is not a pro-active foreign policy per se, but the nature and style or the language of the pro-activism. There is a need for a more balanced and cautious style of foreign policy activism which would still be a multi-dimensional and multi-regional but structured around a firm Western and ED anchor. Over-assertiveness and over-confidence in international affairs can have significant pay-offs in the short term but can also be detrimental to national interest and to lead to isolation in the long term. This is not to say that Turkey is wrong in drawing attention to the plight ofthe Palestinians or in seeking a diplomatic solution to the dispute involving Iran's nuclear program. However, Turkey, as a rising middle power, would be much better positioned to draw attention to these issues and to playa constructive role in the resolution of longstanding disputes by situating itself firmly within broader international coalitions and acting collectively with Western powers, with which it has long-established historical links, as opposed to taking an over-ambitious independent line.

Endnotes L The author would like to thank Gamze Evcimen and Mustafa Kutlay for their able assistance. 2. The present articles represents a sequel to an earlier contribution, Ziya Onts and Suhnaz Yrlmaz, "Between Europeanization and Euro-Asianism: Foreign Policy Activism in Turkey during the AKP Era," Turkish Studies, Vol. 10, No.1 (March 2009), pp. 7-24. For broadly favorable assessments of AKP's foreign policy initiatives, see in particular, Bulent Aras, "The Davutoglu Era in Turkish Foreign Policy;' Insight Turkey, Vol. 11, No.3 (2009), pp. 127-142; Biilent Aras and Rabia Karakaya-Polat, "Turkey and the Middle East: Frontiers of the New Geographic Imagination;' Australian Journal of International Affairs, Vol. 61, No.4 (2007), pp. 471-488; Biilent Aras and Aylin Gorener, "National role conceptions and foreign policy orientation: The Ideational bases of the Justice and Development Party's Foreign Policy Activism in the Middle East," Journal of Balkan and Near Eastern Studies, Vol. 12, No.1 (2010), pp. 73-92; Ibrahim Kalm, ''US-Turkish Relations under Obama: Promise, Challenge and Opportunity in the 21st century;' Journal ofBalkan and Near Eastern Studies, Vol. 12, No.1 (2010), pp. 93-108. For a critical assessment see Tank Oguzlu, "Middle Easternization of Turkey's Foreign Policy: Does Turkey Dissociate from the West?" Turkish Studies, Vol. 9, No.1 (2008), pp. 3-20. 3. The overwhelming majority of the Turkish experts studying Turkish foreign policy find the "axis shift" argument an exaggeration and crude characterization. For detailed interviews conducted with 47 Turkish foreign policy experts, see Miilakatlarla Turk Dl~ Politikasi (Ankara: USAK Publications, 2010), 3 volumes. 4. On the rise of BRICs, see Dominic Wilson and Roopa Purushothaman, ''Dreaming with BRICs: The Path to 2050;' Goldman Sachs Global Economics Paper No. 99 (2003); Leslie E. Armijo, "The BRICs Countries (Brazil, Russia, India and China) as an Analytical Category: Mirage or Insight?" Asian Perspective, Vol. 31, No.4 (2007), pp. 7-42.

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5. Concerning the problems encountered with the ED the path to accession negotiations and the weakening enthusiasm in Thrkey's domestic politics for ED membership, see Ziya Onis, "Contesting for Turkey's political 'Centre': Domestic Politics, Identity Conflicts and the Controversy over EU Membership;' Journal of Contemporary European Studies, Vol. 18, No.3 (September, 2010), pp. 361-376.

6. Ismail Cern's foreign policy vision is extensively analyzed in his multi-volume study, Ismail Cern, Tiirkiye; Avrupa, Avrasya: Strateji, Yunanistan, Ktbrts (Istanbul: Istanbul Bilgi Universitesi, 2005); Ismail Cern, Turkiye, Avrupa, Avrasya: Avrupa'nm 'Birligi've Tilrkiye (Istanbul: Istanbul Bilgi Untversitest, 2005). 7. See in this context, Tank Oguzlu, "Middle Easternization of Turkey's Foreign Policy': Turkish Studies, Vol. 9, No.1 (2008), pp. 3-20; Bulent Aras, "Turkey and the Russian Federation: An Emerging Multidimensional Partnership': SETA Policy Brief, Brief No. 35, 2009. 8. For a detailed account of Turkey-Israeli relations with a focus on recent developments, see Tank Oguzlu, "The Changing Dynamics of Turkey-Israel Relations: A Structural Realist Account," Mediterranean Politics, Vol. 15, No.2 (2010), pp. 273-288. 9. GlennKesner, "Turkish Foreign Minister: Israeli raid on Gaza aid flotilla 'like 9J11' for his country': The Washington Post, June 1,2010. 10. Steve Bryant, "Erdogan Calls Israeli Gaza Ship Raid 'State Terror": Businessweek, May 31, 2010. 11. For the details of the tripartite agreement involving Brazil, Turkey and Iran, see the report of the International Crisis Group, "Turkey's Crisis over Israel and Iran," International Crisis Group Europe Report, No. 208 (8 September, 2010); Graham E. Fuller, "Brazil and Turkey Shift Global Politics;' New Perspectives Quarterly, Vol. 27, No.3 (Summer, 2010), pp. 23-25; 'Iaha Ozhan, 'Multilateralism in foreign policy and nuclear swap deal: Foreign Policy, June 3, 2010. 12. Ahmet Necdet Sezer during his presidency between May 2000 and August 2007 paid 58 official foreign visits. On the other hand, Abdullah Gill paid 69 official foreign visits with more than 2,000 businessmen even though he has recently completed the first three years of his presidency. 13. Due to Turkey's policy of not extending the Additional Protocol to ten new member countries, and Cyprus Republic inter alia, the European Council decided to freeze the eight negotiation chapters and not to close the others. Moreover, the French decision-makers veto the opening of five other chapters on the ground that "they may pave the way for full membership". The Greek Cypriots also threatens to veto six other chapters due to similar reasons. If one takes into account that there are 35 chapters and Turkey has negotiated 13 of them, there remains just three chapters to be negotiated in the existing conjuncture. 14. The popular support for ED membership process was 73% in 2004, which declined to less than 40% in 2009. For evidence on the decline of public support for ED membership, see Transatlantic Trends 2010 Survey of The German Marshall Fund of the United States available at http:// www.gmfus.orgJtrends/2010J countryprofiles.html; Ian Traynor, "Turks believe focus should be on Middle East and away from Europe," Guardian, 15 September, 2010, available at http://www.guardian.co.ukJworldi2010/sepJI5/turkey-eu-integration-survey-iran. 15. For a broad discussion of the impact of the global financial crisis, see Ziya Outs and Ali Burak Girven, "The Global Financial Crisis and the Future of Nee-liberal Globalization: Rupture versus Continuity;" Koc University GLODEM Working Paper; no. 10-01 (2010). 16. For a detailed discussion of the Turkish response to the global financial crisis, see Ziya Onis and Ali Burak Giiven, "Global Crisis, National Responses: The Political Economy of Delay and Divergence in Turkey," New Political Economy, Vol. 18, No.5, (November, 20ll, forthcoming), Patih

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Ozatay; "Europe: Counter-Cyclical Policies in Light of the Global Financial Crisis: The Case of Turkey,"Journal of Globalization and Development, VoL I, No.1 (2010). 17. On the rising Anatolian elites and the "Anatolian tiger" phenomenon which constitutes the backbone of the AKP, see Evren 'Iok, "Anatolian Cities and the New Spirit of Turkish Capitalism," Turkish Policy Quarterly, Vol. 7, No.4 (Winter, 2008), pp. 81-89; Hasan Kosebalan, "The Rise of Anatolian Cities and the Failure of Modernization Paradigm;' Critical Middle Eastern Studies, Vol. 16, No.3 (2007), pp. 229-240; Sebnem Giimii~s:ii and Deniz Sert, "The Power of the Devout Bourgeoisie: The Case of the Justice and Development Party in Turkey;" Middle Eastern Studies, Vol. 45, No.6 (November, 2009), pp. 953-968. 18. For a detailed discussion of the role of civil society associations and business associations, in particular, in Turkey's foreign policy initiatives, especially in the context of Middle East and North Africa, see Kemal Kinsel, "The Transformation of Turkish Foreign Policy: The Rise of the Trading State," New Perspectives on Turkey, No. 40 (Spring, 2009), pp. 29-57. 19. On the nature and peculiarities of the Turkish political party system and the continuing weaknesses of the principal opposition parties, see Ziya Onts, "Conservative Globalism versus Defensive Nationalism: Political Parties and Paradoxes of Europeanization in Turkey;" Journal ofSouthern Europe and the Balkans, VoL 9, No.3 (December, 2007), pp. 247-262; Sabri Sayan, "Towards a New Turkish Party System?" Turkish Studies, Vol. 8, No.2 (2007), pp. 197-210. 20. For a parallel critique and a proposal to define Turkey's foreign policy priorities at a regional scale, see: Saban Karda~, "Turkey: Redrawing the Middle East Map or Building Sandcastlesf" Middle East Policy, Vol. 16, No.1 (Spring, 2010), pp. 115~136. 21. For a detailed analysis, see Serap Yazrci, "The Impact of the EU on the Liberalisation and Democratisation Process in Turkey': in Richard T. Griffiths and Durmus Ozdemir (eds.), Turkey and the EU Enlargement: ProcessesofIncorporation, (Istanbul: istanbul Bilgi University Press, 2004), pp. 91-102; for the role of the EU on 'Iurktsh democratization, see Zeki Sangil, "Europeanization as Institutional Change: The Case of the Turkish Military", Mediterranean Politics, Vol. 12, No.' 1 (2007), pp. 39~57. 22. For critical accounts and limits of Turkey's effective mediating role in the Middle East, see Me1iha Benh Altumsik, "The Possibilities and Limits of Turkey's Soft Power in the Middle East:' Insight Turkey, Vol. 10, No.2 (2008), pp. 41-54; William Hale, "Turkey and the Middle East in the 'New Era7' Insight Turkey, Vol. 11, No.3 (2009), pp. 143-159. 23. For the details of Bashar al-Assad's speech, see "Syria warns of Mideast instability amid Israel-Turkey crisis", Hurriyet Daily News and Economic Review, July 6, 2010. 24. For a strong emphasis on the ethical basis of Turkish foreign policy-in the new era, see the speech of Prime Mfntster Recep Tayyip Erdogan, "Changing Balances and the Rising Importance of Turkey': a speech delivered at the International Strategic Research Organization (USAK), available at: http:/Jwww.turldshweeldy.netiarticleJ341/ the-changing-balances-and-the-rising-importanceof-turkey.html. At this speech the prime minster defends Turkey's ethical foreign policy as follows: "... this is what we have emphasized in our foreign policy. We defend justice, peace, law, and democracy in every area. We, as a conservative and democratic party, are struggling to hold both real and normative policy together." 25. Carol Migdalovitz, "Turkey: Selected Foreign Policy Issues and U.S. Views," CRS Report for Congress, August 29, 2008. Available at: http://www.fas.org/sgp/crs/mideastJRL34642.pdf; for a supportive account on Turkey's Darfur policy, see Mehmet Ozkan and Birol Akgun, "Why Welcome Al Basheer! Contextualizing Turkey's Darfur Policy," SETA Policy Brief, No. 45 (July, 2010).

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Public Perception of the Kurdish Question in Turkey by BOlent Aras, Ertan Aydin, Selin M. Beirne, lhsan Dagl, Ibrahim Dalrrus, Yilmaz Ensaroqlu, Hatem Ete, Talip KO~Okcan, Taha 6zhan, and Huseyln Yayman October 2009

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Prepared and executed by a committee composed of experts in sociology, political science, international relations, economy and social psychology, SETA and Pollmarks joint survey entitled "Public Perception of the Kurdish Question' displays different aspects of public perception on the Kurdish question and offers new insights for more informed discussions on the issue.

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Turks in Europe

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Edited by 'Ialip Kucukcanand Veyis Gungor This volume provides the most comprehensive picture of Turks in Europe and offers cutting edge ideas, analyses and recommendations on a wide range of challenges that modern European societies cannot avoid paying closer attention. Drawing on original research, Turks in Europe brings together sociologists, anthropologists, political scientists and experts in educational and cultural studies to address issues such as identity, culture, religion, integration and relations between Turkey and the European Union.

Economy as the 'Practical Hand' of 'New Turkish Foreign Policy': A Political Economy Explanation MUSTAFA KUTLAY*

T

urkish foreign policy activism during the last decade has attracted Widespread international attention. Turkey's declared "zero-problems"with-neighbors" policy and rising influence as a "regional power" in Middle Eastern and Central Asian countries under the auspices of the Justice and Development Party (Adalet ve Kalkmma Partisi, hereinafter, the AK Party) has turned out to be one of the most hotly debated issue> among students of Turkish foreign policy. During the AK Party era Turkey has had a more independent and assertive foreign policy strategy in its region. In this new era, Turkey has fixed its problems with Syria, Iran and Iraq. It has become more active in mediating in the Israel-Syria talks, in bringing Balkan leaders together, and in dealing with newly emerging powers like China and Russia.' Accordingly, the underlying dynamics of new Turkish foreign policy activism and the sustainability of the existing multi-dimensional pro-active for-

2009 J ISBN 978-90-77814-13-0 / 625 pp.

Turkevi Research Centre Postbus 58070, 1040 HB Amsterdam, The Netherlands info@turkevLn!

".Department ofInternationalRelations, Kor; University, and InternationalStrategic Research Organization, [email protected]

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Economy as the 'Practical Hand' of'New Turkish Foreign Policy': A Political Economy Explanation

eign policy have come to the fore in this discussion. Mainly due to the strained relations with the Israel- US nexus" and «low profile" negotiation process with the ED in the last couple of years, some commentators have labeled Turkey a country "drifting away from the West:" According to these views, Tnrkey has aligned itselfwith its Eastern neighbors and has turned its back on its traditional Western allies mainly for ideological reasons. If one puts the «axis shift" discussions aside, which is found as a crude categorization by many experts, there are two main conceptual approaches to understand the fundamentals of new Turkish foreign policy.' The first approach regarding the Turkish foreign policy activism can be labeled as "security-based explanations." According to this approach, the emergence of a multi-polar world after the decline ofSoviet Union and the subsequent changes in the Middle East and Balkans over the last two decades has led to a power Vacuum and a power shift in Turkey's neighboring regions.' As a result, Ankara has formulated a pro-active, multi-dimensional and constructive foreign policy to adapt itself to the changing security conjuncture of the new era, which is characterized by a power shift "as the inevitable outcome ofthe end ofthe Cold War and a fact of the new millennium:" Although these explanations do not exclude the changing balances in the world economy, particularly in the aftermath of global financial crisis, they nevertheless do not put enough emphasis on the ways in which economic interactions affect the new activism in Turkish foreign policy," The second approach mainly concentrates on «identity-based explanations." Accordingly, it is argued that the Islamist roots ofthe ruling AK Party government have encouraged it to formulate an identity-based foreign policy toward Muslim countries. Thanks to the 'Muslim identity' of AK Party, the Muslim Arab nations welcomed this approach, as a result of which relations between Turkey and Middle Eastern countries have reached unprecedented levels in history, The identitybased explanations mainly emphasize the assertive role of Ankara in the region in which Turkey has historical claims with 'imperial ambitions: This understanding, also named as 'neo-Ottomanism,' inherently prioritizes
681

eign policy. The multiple faces of Turkish foreign policy obviously deserve multicausal explanations and these explanations are by no means mutually exclusive. The role of the changing economic dynamics in Turkey and the transformation of Turkish financial and industrial capital, however, are not adequately addressed in these studies. In other words, the political economy of the new Turkish foreign policy is an under-studied and under-theorized area in the literature." This study aims to contribute to the recent debates from a political economy perspective. The first part of the article draws upon the political economy framework with special reference to the functionalist and interdependence approaches. The second part depicts the transformation in Turkish financial and industrial capital over the last decade. The third part determines three specific mechanisms (material interests, multiple dialogue channels, and perceptions) through which the domestic political economy transformation underpins Turkish foreign policy activism. The final part exaruines the constraints and limits of utilizing economy as the 'practical hand' of new Turkish foreign policy. A Political Economy Approach to Turkish Foreign Policy Activism: Functionalism and Interdependence This part of the paper aims to put Turkey's recent foreign policy activism into a political economy framework. In doing so, this paper utilizes functionalist and interdependence approaches. Though Turkey's recent foreign policy dynamism has taken place in a very different political economy structure in terms of actors and means in comparison to when these theories were constructed, it is still possible to argue that the basic arguments of these approaches are quite illuminating in explaining the Turkish case. In this context, this part aims to define the fundamentals of integration and interdependence theories in order to put the Turkish case into an analytical context. Among the regional integration theories, Neofunctionalism (hereafter, NF), as developed by Ernst Haas and others, is the first comprehensive approach. The focal point of NF is the interplay between economic and political integration. It is assumed in N eofunctionalist theory that integration in key economic sectors would create functional pressures, first in economic sectors, and this would then pave the way to a new political community via political integration. Haas defines integration as a process from low politics (economic integration) to high politics (political integration) at the end of which a new political community comes into existence. The mechanisms that enable the creation of a new political community via economic actors can be demonstrated in three steps.

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The first step is the sectoral integration in low politics. NF argues that the integration should be started from the areas of low politics (economic sectors) instead of sensitive fields that trigger s~)V­ ereignty concerns of the member states. Yet, Neofunctionalists make a distinction between economic sectors and suggest integration in key strategic economic sectors. Accordingly, it would be possible for these sectors to create further functional expansion than others since they are 'Doth specific and economically important in the sense of containing the potential for spilling over from one vital area of welfare policy into others"!'

In recent foreign policy initiatives, Turkey seems to be following the functionalist framework so as to exploit economic opportunities and interdependence in further institutionalizing its relations with neighboring

The second step is the functional pressures and spill-over. Once integration is kicked-off in a key economic sector, it would yield positive results for interest groups that are taking part in integration. In a pluralist society, these interest groups would push the integration process forward in other economic sectors in order to benefit from decreasing transaction costs and increasing economies of scale. In other words, the integration ofparticular economic sectors/actors would create a functional spill-over in other sectors at the governmental level. Spill-over, in this regard, is defined as follows: [Spill-over] refers to a situation in which a given action, related to a specific goal, creates a situation in which the original goal can be assured only by taking further actions, which in turn create a further condition and a need for more action, and so forth."

The final step is the loyalty shift to high politics. The functional pressure from the integrated sectors into the other economic sectors paves the way for the integration of national economies. The integration of national economies would facilitate the liquidation of political problems and encourage the loyalty shifts of sub-national groups from a purely national orientation to the regional level. The insights of the Neofunctionalist theory in the 1970s were "transferred to the growing and broader dimensions of international economic Interdependence".13 One of the leading theories, in this regard, was the interdependence theory.'! In their study, Keohane and Nye argued that it was not possible anymore to understand world politics just by relying on the security-based realist 70

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Economy as the 'Practical Hand' of 'New 'Iurklsh Foreign Policy': A Political Economy Explanation

understanding of inter-state relations The restructuring of domestic and claimed that «states are by no means business actors and the the only actors in world politics,"!" They emergence of a new competitive put special emphasis on non-state actors capitalist class underpinned (especially business groups) and developed the idea of a 'world politics parathe economic arm of Turkish digm' that aimed to fulfill the lack of a foreign policy state-centric framework. Accordingly; "world politics paradigm, the approach that puts emphasis on the increasing role of transnational relations other than nation-states, is necessary if scholars and statesmen are to understand the current [complex interdependent] problems in world affairs"> While trying to develop the instruments in dealing with existing multilateralism, the interdependence paradigm puts a special importance into three channels, which are highly relevant in Turkey's recent foreign policy activism: multiple channels ofcommunications, an absence ofhierarchy among the issues (the rejection of high politics vs.low politics dichotomy), and the diminished role for military power. In recent foreign policy initiatives, Turkey seems to be following the functionalist framework so as to exploit economic opportunities and interdependence in further institutionalizing its relations with neighboring countries by downgrading military power in favor ofeconomic interactions. From the political economy per- . spective of this paper, the transformation of Turkish industrial and financial capital in the post-200l period enables the functionalist and interdependence theories to become relevant in the recent context. The next part of the paper investigates the transformation of industrial and financial capital and aims to determine the political economy fundamentals of Turkish foreign policy.

Transformation ofIndustrial and Financial Capital after the 2001 Crisis The establishment of the economic fundamentals of the new Turkish foreign policy goes back to the 2001 economic crisis.'? The 2001 crisis was the severest economic disaster in Turkish history, in terms of many indicators. Yet, from another perspective, it created a 'window of opportunity' for the transformation of the political economy structure and state-business relations in Turkey. In fact, the destructive consequences of the crisis influenced almost all classes of society. The intensity of the shock helped in the creation of a broad and strong consensus among different parts of society: People understood very well that the problem regarding the economy was not a simple liquidity shortage or an improper crisis-

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Economy as the 'Practical Hand' of'New Turkish Foreign Policy': A Political Economy Explanation

l:"m'~nage.rnent strategy; instead, there were very deep-seated structural problems in

financial and real pillars of the economy" This clear and broad understandin turn, paved the way for radical reforms in the post-crisis episode. In these SUitable circumstances, reformist <policyentrepreneurs' found large room for maneuver and they were backed by influential business associations like TUSiAD and MDsiAD as well as by other associations named siAns. The progressive/ dynamic fractions of Turkish finance capital also supported a new model of capital accumulation strategy in Turkish economy. The government's determination to implement the economic restructuring reforms was underpinned by its proEuropean stance in the political and foreign policy arena. The pro-EU reforms in this period, and the improved relations with the EU, enabled the government to create a broad-based interclass alliance. Hence, the macroeconomic environment and institutional framework in the country was further consolidated with the help of the Europeanization process. As a result: For the first time in many years, Turkeyfound itself in the midst ofa virtuous cycle With economic and political reforms as well as key foreign policy initiatives feeding into one another. helping to produce a favorable environment for economic growth. 19

During this period, Turkish finance capital and the state's role in the economy Were subjected to Significant changes at least in terms of two qualifications. First, the restructuring of domestic business actors and the emergence of a new competitive capitalist class underpinned the economic arm ofTurldsh foreign policy. SeCond, the rise ofthe Anatolian tigers' as new game-setters in Turkey's economic POliCies and foreign relations has changed the political economy structure.

Bifurcation and Restructuring in Finance Capital The first pillar of the transformation in Turkish finance capital was the develOPments in the financial system, mainly the banking sector, the area in which pro-active state policies played a crucial role. After the 2001 crisis, the structure of the Turkish financial system changed dramatically. Political intervention and the dominance ofthe public sector within the banking sector had increased throughOut the 1990s; this in turn triggered the increase in banking licenses. As a result, the number of banks increased, from 66 in 1990 to 81 in 1999. These banks were not 'doing banking' in any real sense because they were heavily investing in trcaSury bills and bonds instead of disbursing credit to the industrial economy. In other words, the dominant capital accumulation strategy in Turkish financial sector Was based on rennerprofits extracted from the state apparatus." As a result, the 72

credit allocation mechanisms of many The changing economic banks were Significantly politicized and structure affected power irrational. The 2001 crisis put an end to relations in the country, and the rentier strategy of capital accumulainevitably spilled-over into tion and wiped most of these banks off the scene so that the total number of foreign policy banks decreased to 59 immediately after crisis. The consolidation in the sector continued in the mid-2000s with bank numbers decreasing to 49 as of 2009. 21 The consolidation in the financial sector was the result of intra-capital restructuring of finance capital in Turkey. In fact, the exhaustion of the rentier accumulation strategy in the early 2000s required the restructuring of financial firms and their affiliated holdings. In the new context, the dynamic accumulation strategy that was based on internationalization and competition on a world scale instead of state-dependent accumulation model turned out to be the only sustainable way for Turkish finance capital to develop. The Banking Sector Restructuring Program and the financial reforms were developed with this shifting strategy in mind. However, it is crucial to underline at this point that the restructuring in question was by no means a solely state-run project or a project only dictated by the international financial institutions. On the contrary; the diverging paths within finance capital and the changing attitudes ofthe factions within the financial sector turned out to be the crucial non-state factors. For the sake of categorization, the position of finance capital can be classified into two basic groups in this period." Of the first faction, there were the conglomerates that relied on the <primitive capital accumulation' strategy, in the sense that the overwhelming share of their accumulation was realized thanks to the rentier type ofprofits extracted from the investments in treasury bonds and bills." This faction, especially in the industrial sector, was characterized by low-value added and traditional production that had not helped them gain competitive advantage in the world economy. As a result, they were dependent on the state and relied on state protection and subsidies. The holdings in this fraction could not establish a strong capital structure that was sustainable in the long-run due to their concentration in the traditional and fragmented production sectors such as textiles, construction and media. Their survival, in this context, became possible only on the rentier capital accumulation throughout the late 1980s and 1990s. In fact, the high state-indebtedness provided a type of 'financial protection' for these firms to survive without facing real international competition. However, this strategy failed in the late 1990s due to the fiscal crisis of the state. Unsurprisingly, the bankrupted financial inc

173

Economy as the 'Practical Hand' of'New Turkish Foreign Policy': A Political Economy Explanation

MUSTAFAKUTLAY

'The newly rising Anatolian bourgeoisie, thanks to geographical proximity and cultural factors, has pushed policy-makers to reformulate their policies vis-a-vis Middle Eastern and Central Asian countries

stitutions came out of the holdings that overwhelmingly relied upon the 'primltive accumulation' strategy. Accordingly, the banks belonging to Cukurova Holding (Pamukbank), Yasar Holding (Yasar Bank), Nergis Holding (Interbank), Medya lpek Holding (Etibank), Cmgilhoglu Holding (Demirbank), and others, either declared bankruptcy or fell into financial difficulties in the early 2000s.

The other faction in the financial sector were the conglomerates that used the 'dynamic accumulation' strategy in the sense that these corporations did not only rely on the treasury to sustain their financial profitability." It is true that these financial institutions also significantly benefited from crony capitalistic relationships throughout the i 990s, yet they nevertheless succeeded to survive when the fiscal crisis of state hit the economy in early 2000s. These conglomerates realized that the Turkish political economy was on an unsustainable path io the 1990s and systematically improved their capital accumulation modes by iovestiog io highvalue added sectors. In the industrial realm, they veered towards newly emerging sectors and regions by using the 'dynamic accumulation' and internationalization strategies. The most popular sectors for these conglomerates turned out to be the automotive, finance, high-technology, and durable goods sectors. They used their financial arms relatively better than the first faction and invested in their banks to improve their ioternational competitive position. Koc Holding's Kocbank, Sabanci Holding's Akbank, Dogue Holdiog's Garanti Bank and i~ Holding's lsbank became the organic supporters of these holdings io their high-value added investments during the internationalization process in the 20005. For instance, Sabanci Holding divested from the traditional textile sector and concentrated on the high-technology sector by acquiriog DuPont io 2004 for $108 million. Eczacibasi Group acquired 51 % of the ceramic division of Villeroy&Boch; trlker Group acquired the famous Belgium chocolate firm Godiva for $850 million; Anadolu Group acquired the beer firms Krasny Vostok in Russia and Lomisi in Georgia; and the Koc Group acquired the washing machioe producer Blomberg, the electronics firm Grundig, and the white goods producer Artie." In summary, instead of concentrating on the state-dependent growth and accumulation strategy, the second faction of Turkish finance capital preferred global iotegration.

741

In the process, the state (with IMP support) played an active role io liquidating the financial iostitutions that were relying on primitive accumulation and helping in the internationalization of financial conglomerates by promoting the dynamic accumulation strategy. The second faction of finance capital, from the other side, encouraged the state to form a new capital accumulation strategy and encouraged state-business relations. Thereby they supported the post-crisis reforms and internationalization strategies of state actors. This point is implied in the following quotation of Rahmi Koc, the chairman of Koc Holding: The difficulties of 2001 may be likening to cleaning the decks. The strong firms that do sustainable business survived the storm and had become stronger. The firms who grew extraordinarily thanks to political influence and favor were wiped out from the scene due to the harsher market conditions and changing government policies. I see this as an important and promising development for the transformation of business culture in Turkey. The inability of making money ought to be clear for the firms that do not add value to their products and servtces't" From a political economy perspective, the restructuring operation refers to a 'who-gets-what' question io the sense that the old-traditional type of finance capital lost the game and left the scene, while the pro-integrationist fraction succeeded. The power shift in domestic finance capital, in turn, underpinned an active foreign policy engagement. The restructuring of capital had important political economy and foreign policy consequences for Turkey. As a result of the abovementioned transformation, Turkish financial firms first consolidated their position in the economy, and second acted as a change agent in transforming industrial capital in Turkey. The changing economic structure affected power relations io the country, and inevitably spilled-over into foreign policy. The third part of this section will investigate the role of this transformation for Turkish foreign policy. Beforehand, it is important to map out another aspect of the transformation of industrial capital in Turkey as a complementary to the financial transformation in the post -crisis era.

A New Actor of Turkish Industrial Capital: The 'Anatolian Tigers' The aforementioned restructuring of intra-capital in Turkey refers to one aspect of Turkish finance capital. There is another aspect that has the potential to influence the political economy dynamics: The Anatolian tigers;" Starting from the 19805, during the Ozal government, a conservative and self-sufficient group of Anatolian businessmen came to the fore and has gradually increased its influence." MDSIAD, as the main representative of Anatolian capital along with 1

75

MUSTAFA KUTLAY

the SiADs, moved from the periphery to the center of Turkish capitalism." Anatolian cities such as Kenya, Gaziantep, Denizli, Eskisehir, and Kayseri, in which MUSiAD and other siADs are quite active, have become the new powerhouses of the Turkish manufacturing industry." For example, MUSiAD, established in 1990, has 30 nation-wide branches, 92 connection points in 43 countries and 4,700 members all around Anatolia as of 2010." The economic and political power, naturally, started to shift to economic actors that were excluded from the state mechanisms beforehand. This power shift to a certain extent has changed the domestic balances in both the political and social landscape." The shifts in domestic power have foreign policy implications for Turkey in the sense that the newly rising Anatolian bourgeoisie, thanks to geographical proximity and cultural factors, has pushed policy-makers to reformulate their policies vis-it-vis Middle Eastern and Central Asian countries." The way in which these power shifts underpinned the new foreign policy activism is to be elaborated in the following part.

The major driving force for the soft power activism of Turkish foreign policy has been the economy and trade

The Economy as the 'Practical Hand' of Turkish Foreign Policy Activism In line with the new perspective for state-society and state-capital relations, the economic elite have pressured for new policy formulations not only in domestic affairs but also in foreign policy. First of all, Turkey's integration into the global economy and the EU process forced business groups to adapt to the mentality of the new world political economy. Accordingly, the new economic rationality, which necessitated investing in high-value-added products, making long-term strategic decisions, and changing economic mentality from a clientelistic approach to a rule based understanding, turned out to be a major force of change." Once the business associations had internalized the 'hard recipe' that they had no chance but to obey the rules of the game in the new international political economy, they strongly supported the EU membership process as the most appropriate method of economic modernization in Turkey. 'The economic interest groups, mainly TUSiAD, who were quite skeptical about a possible integration with the European Economic Community in the late 1970s started to gradually change their attitudes after the mid-1990s. Most of them lobbied simultaneously on domestic and international fronts." For instance, MUSiAD, which was arguing in the mid1990s that "Turkey was in full contradiction with the 'ED member countries in

761

Economy as the 'Practical Hand' of 'New Turkish Foreign Policy': A Political Economy Explanation

historical, religious and cultural terms", The interaction and mutual changed its anti-Elf rhetoric and became interdependence between a member of the European small and Turkish businessmen and their medium enterprises (SME) network of counterparts have turned into European Confederation of Associations of Small and Medium-sized Enterprises one of the 'practical hands' of "for further Europeanization of Turkish Turkish diplomacy economy';" Since Turkey was given candidate country status in Helsinki in 1999 and the negotiations kicked-off in 2005, business support for Turkey's membership bid peaked in the early 2000s. Apart from the ED membership process, business associations gave vocal support on Turkey's new foreign policy approach towards its neighbors. In this new context, Turkey in the AK Party era, especially after the 2007 elections, said it was to follow a "zero problems" policy with its neighbors. This foreign policy formulation is based on Turkey's soft-power capabilities and foresees a multidimensional approach due to "Turkey's unique space in terms of geography"? In line with the new foreign policy paradigm, Turkey devoted most of its energy in mediating between Syria and Iraq, Israel and Palestine, and facilitating the talks between Iran and the Western world. Recently, Turkey has remarkably improved its bilateral relationships with Syria, Iraq and Iran. What is important in terms of this study is that the major driving force for the soft power activism of Turkish foreign policy has been the economy and trade. Putting it another way, Turkish finance capital has turned out to be the practical hand of Turkish policy-makers in the region. The new mode of capital accumulation that has become more visible in the post-2001 period and the rise of Anatolian capital have encouraged Turkish business groups to invest in abroad. Accordingly, the Turkish business elite have started to explore the economic and financial opportunities in the neighboring countries and have backed the state in its efforts to stabilize the region for the sake of their interests, inter alia. In other words, the finance capital in Turkey has gradually increased its power in foreign policy formulation. According to the broader implications ofthe Neofunctionalist and Interdependence theories, the economy has played an important role in foreign policy formulation via three mechanisms; material interests, multiple dialogue channels, and perceptions.

Material Interests The material interests established between Turkish firms and neighboring countries constitute the first mechanism that underpins the new Turkish foreign

177

MUSTAFA KUTLAY

policy activism. The interaction and mutual interdependence between Turkish businessmen and their counterparts have turned into one of the 'practical hands' of Turkish diplomacy. The leading airline operator in Turkey, Turkish Airlines (THY), for instance, has increased its destinations from 70 to more than 124 points in 80 countries. According to THY's CEO, the demands of Turkish businessmen is one of the reasons for them to increase the number of destinations in the last couple of years." The total annual turnover of the airline industry in 2009 reached more than $8 billion, compared to $2.2 billion in 2002." Turkish constructionfirms, most of which are Anatolian tigers, have invested more than $20 billion in Russia and about $35.5 billion in the Middle East over the last decade. 40

.....

,

Apart from Middle East, Turkish firms have also increased their investment stockgradually in the Turkic republics. For instance, Turkish firms have invested more than $3.6 billion in Azerbaijan and $628 million in Kazakhstan,'! In this environment, the material links between the Turkish economy and the economies of neighboring countries have drawn the attention of the policy-makers to concentrate on the new demands of business circles. Hence, Turkish foreign policy activism has become an area of realizing material opportunities that obviously goes beyond the ideational explanations. The increasing gravity of the economy in new Turkish foreign policy, especially in Middle Eastern and Asian countries, is summarized as follows:

~~

)'~''i", ,'[ ;.,' I,~

'["f

':j

Turkey mainly relies on economic instruments in improving relations with its neighbors. The economic instruments, mainly trade and investment projects, are used as facilitators in foreign policy. In other words, the recent political openings have found their ways via bilateral economic relations. For example, Turkey's recent engagement with Syria [in 2009] resulted in the reciprocal abolishment of visa requirements ... Turkish and Syrian businessmen are preparing for jointprojects in the tourism and industrial sectors. The bilateral trade relations (which expanded to 1.1 billion dollars in 2008 with a 40 percent increase visa-vis the previous year) are expected to further increase in the coming years... The other example is Iraq. Turkey aims to expand bilateral trade relations with Iraq from 5 billion dollars to 20 billion dollars in a short time span. Moreover, Turkish construction firms have been constantly searching for ways to take an active part in the possible construction projects, which are projected to total 500 thousand residences ... The last example is Turkish-Iranian bilateral economic relations. [In 2009], the trade volume between the two neighboring countries reached10 billion dollars; this figure was about 350 million dollars just ten years ago... Turkishinvestors have investments in Tabriz,the focal point ofthe Iranian economy, and they mainly concentrate on textiles, food, chemicals, gas explora-

781

Economy as the 'Practical Hand' of 'New Turkish Foreign Policy': A Political Economy Explanation

tion etc. It is estimated that Turkish investments in Iran have reached up to 1 billion dollars and many other investment plans are waiting to be signed on the negotiation table." In this context, two major economic developments came to the fore. First, neighboring countries have turned into profitable trade partners for Turkish finance capital since 200 I. Parallel to the rise in Turkey's total foreign trade (which increased from $72 billion in 2001 to $333 billion in 2008), Turkey's total trade with Middle Eastern and Asian countries increased from $18.7 billion to $131 billion and Turkey's trade with Gulf Cooperation Council members also tripled in the same period." More importantly, neighboring countries' share in Turkish foreign trade has increased at the expense ofthe EU market. As the figure 1 shows, from 2003 to 2010, the ED's share in Turkish foreign trade declined from 51.38% to almost 42%, whereas Turkey-Asia and Turkey-Near and Middle Eastern foreign trade increased to 26.5% and 12%, respectively.

Figure 1: Turkey's Changing Foreign Trade Structure (% of total)

60

53,6

50 40 30 20 10

o 2003

2010'

2007

IIIEU IlIAsia

~Midd1e

East

*First 7 months Source: TUIK

The second economic development that has improved Turkey's visibility in foreign affairs is the changing outward FDI dynamics (figure 2). Concomitant with rising FDI inflows in the post-200! period, Turkey's outward investment stock has also increased. Accordingly, between 2002 and 2009, Turkey's outward direct investment stock reached at $11.2 billion, $3.1 billion ofwhich was directed to Asian countries (includlng the Near and Middle East). 179

Economy as the 'Practical Hand' of 'New Turkish Foreign Policy': A Political Economy Explanation

MUSTAFA KUTLAY

Figure 2: Turkey's Outward Investment Flows (million dollars)

lobbied the government consistently to facilitate the conditions of their economic interaction with Syrta."

3.000 2.500 2.000 1.500 1.000 500 0

Source: CBRT

2002

2003

2004

2005

2006

2007

2008

2009

II Total outward FDI

251

486

815

1.065

1.677

2.275

2.604

2.041

~

Europe

199

166

315

504

1.104

1.621

1.370

1.538

ill

Asia

4

240

452

504

518

485

490

395

Multiple Dialogue Channels As the Interdependence theory acknowledges, the multiplication of dialogue channels is another way of improving bilateral relations between parties. Since new actors and new priorities affect the relationship, dialogue between the parties cannot be restricted to the traditional security-biased bureaucratic and military channels and spills-over into other functional corporation areas. The economy, again, acts as a facilitator in this context. Parallel to the rise of Anatolian capital in Turkey, the dialogue channels between Gaziantep and Aleppo, for example, multiplied. As functionalist theories argue, the increasing intensity of commercial relations between Anatolian businessmen and Middle Eastern markets has created spill-over effects and facilitated the establishing of new dialogue and cooperation mechanisms. In the Syrian context, the pressure from Anatolian industrialists and exporters has encouraged the government to sign free trade and visa-free travel agreements. The case of Syria is particularly interesting; as many commentators in the Arab world have suggested recently, the alliance between Turkey, now ruled by a party with strong roots in Sunni political Islam, with the widely disliked Alawi community appears unseemly. The motives behind Bashir Al-Assad's emphatic embrace of the new Turkish-Syrian alliance notwithstanding; it is the influence of local business elites, which account for Turkeys move towards Syria.Industrialists in Gaziantep, one of Turkeys leading industrial cities and "Anatolian Tigers': have 80

I

Partially due to the demands and lobbying of industrialists and exporters, Turkey concluded 50 agreements, memoranda of understanding, and cooperation protocols with the Syrian government on September 17, 2009, most ofwhich were directly related to the economic and commercial realms. The agreements also underpinned the institutionalization of dialogue channels via establishing a High Council of Strategic Cooperation." Similarly, Turkey has abandoned its previous visa regimes and signed free trade agreements 'With Iraq, Lebanon, and Jordan in addition to the establishment of more High Councils of Strategic Cooperation." The institutionalization of economic linkages has been further underpinned via "official trade liaison offices, chambers of commerce and trade associations."? In summary; the multiple channels established between businessmen increases the number of interpersonal networks and helps institutionalizing the spill-over effects, As a result, relationships are not restricted to bureaucratic state-state relations anymore. The interaction between non-state actors at different levels and on different issue areas has multiplied the ways in which parties gather information about each other. Consequently, the new logic ofpolitical economy dynamics paves the way to changing perceptions, albeit slowly vis-a-vis the other mechanisms.

Perceptions The third mechanism thorough which the economy serves as a <practical hand' ofTurkish foreign policy is by changing perceptions as a natural corollary ofmaterial interests and multiple dialogue channels. In other words, the spill-over effects of commercial interests and the institutionalization ofmultiple dialogue channels in new relationships gradually changes perceptions. Arguably, perceptions have been the most persistent problem that has hindered Turkey's relations with most of its neighbors, especially during the 1990s. As Altumsik wrote, "throughout most of the 1990s, Turkey was seen largely irrelevant to debate in the Arab world and mutual perceptions of threat and distrust characterized the relations'?" Arab perceptions of Turkey, however, started to change dramatically from the early 2000s and, in 2009, 75% of the Arab population had either very positive or positive views of 'Iurkey," Obviously there are many reasons for this abrupt change, including domestic changes in Turkey and in the Arab world, as well as power shifts in world politics. The economic aspect, within the context of this study, was also important. The increasing economic interdependence paved the way for

I 81

MUSTAFA KUTLAY

more intense interaction and human mobility that changed the historically and ideologically loaded (mis)perceptions. To sum up the argument so far, business-state relations in the Turkish political economy have changed dramatically in the post-2001 period. The new context has enabled the overhauling of the economic and financial structure and has introduced a new perspective for the international presence of Turkey, especially in its neighboring region. The improvements in the domestic structure have, in turn, provided fertile ground for financial and industrial capital to push for a more dynamic and pro-active foreign policy formulation via establishing material interests, multiple dialogue channels and positive perceptions. Yet, is this trend sustainable in the incoming years? What are the limits and constraints of the political economy dynamics in Turkish foreign policy? The next part aims to make a constructive critique of the political economy of the new Turkish foreign policy. The Political Economy of the New Foreign Policy Activism: Limits and Constraints The functionalist and interdependence political economy approaches are highly relevant in explaining the existing nature of activism in Turkish foreign policy. However, in order to take advantage ofthe economy as the 'practical hand' of foreign policy in the long run, there are certain parameters that need to be satisfied. In this part of the article, three major parameters will be defined, namely industrial capacity in terms of competitiveness, the state-business and businessbusiness synergy, and the societal coherence in terms of domestic and foreign policy priorities. Then, Turkey's position will be assessed accordingly. First of ali, Turkish industry has an important competitiveness problem (see table 1). It is true that Turkish firms have developed an outward-oriented perspective and have internationalized to a certain point. Research and development (R&D) activities, for instance, have increased in the post-2001 period, with R&D expenditures increasing from $3 billion in 2002 to $6.8 billion in 2008. During the same period, R&D expenditure per capita increased from $46 to $98. The number of full-time equivalent R&D personnel increased from 28,964 in 2002 to 67,244 in 2008, which corresponds to 132% increase. By another measure, the number of scientific publications increased from 10,314 in 2002 to 22,738 in 2008. Similarly, the number of international patent applications a year rose to 361 from 85 in the same period. 50 In the final analysis, however, the comparative figures are still far from being promising. For example, while Malaysia, South Korea, and China

82[

Economy as the 'Practical Hand' of 'New Turkish Foreign Policy': A Political Economy Explanation

devote 55%, 32% and 31% of their total exports to high-technology products, the ratio in Turkey is just 2%, which in fact depicts the competitiveness problem of the Turkish export sector." The following table tabulates the relatively dismal picture for the competition ability ofTurkey in which Turkey is ranked 61"'out of 133 countries in 2009. Table 1: Turkey's Competitiveness Performance (2009-2010) Rank

Main Indicators -

GCl20092010(outof133) Gel 2008-2009 (out of 134) GCl20072008(outof13l)

61 63 53

~"

" L ',',-,

2nd pillar: Infrastructure 3rd pillar: Macroeconomic stability 4th pillar: Health and primary education ~" ,

.

-----.-~

,

'.

..

-

5th pillar: Higher education and training 6th pillar: Goods market efficiency 7th pillar: Labor market efficiency 8th pillar: Financial market sophistication 9th pillar: Technological readiness 1Othpillar: Market size

• mot."

""J

~',.'"

.-,.'-

l Ith pillar: Business sophistication 12th pillar: Innovation Source: World Economic Forum, Global Competitiveness Index,

'.'

96 62 64 74

l st pillar: Institutions

:.,

.-

.'

.",

73 56 120 80 54 15 ,,~';,.-,'-

,.- i.:, ;.-:

52 69 2009~20l O.

The other aspect of the competitiveness problem of the Turkish industrial sector is the lack of productive links between froancial institutions and the industrial sector. Access to credit sources had always been one of the main problems for small and medium enterprises (SMEs) in Turkey. This situation became more difficult following the surge of foreign capital into the Turkish banking system. Actually, "one of the obvious limitations of the new environment is that it cannot make a sufficient contribution to the financing of the real economy, as evidenced in the weak share of savings and fixed capital investments in GDP, whilst a considerable amount of household disposable income was transferred to the banking sector"? Foreigners' participation in the Turkish financial system makes it difficult for Turkish SMEs to access credit since they are not adequately equipped to fulfill the necessary credit and rating standards. From a foreign policy perspective, the competitiveness problem is especially serious for the Anatolian ti-

[83

Economyas the 'Practical Hand' of 'NewTurkishForeignPolicy':A PoliticalEconomyExplanation

gersinvesting in Middle Eastern and Asian countries. Obviously, without the strategic planning of investment strategies in neighboring countries, sustaining the economy as the <practical hand' offoreign policy activism has certain limits and constraints. The second problem concerns state-business and business-business synergy. According to the functionalist and interdependence approaches the institutionalization of cooperation mechanisms is required for creating sustainable spill-over effects into high politics. Similarly, as Rodnk" and Evans" argue, the effective industrial policy of the 21 st century requires an active and continuous state-private sector dialogue implemented by means of proper coordination mechanisms and institutions. The dialogue in question has two dimensions. On the one hand, state-private sector cooperation is essential. However, Turkey has not developed the proper dialogue channels between the state and private finance capital to overcome information shortages and bureaucratic bottlenecks. Also private-private sector cooperation (what Susan Strange calls "firm-firm diplomacy") is sine qua non. Business associations in Turkey "have been quite reluctant to enter into alliances and have been careful to maintain a distant, arm's length relationship both with other business associations as well as wider segments of the civil society";" Although there are signs that influential business organizations in Turkey have started to engage in dialogue, the level of cooperation is still rudimentary and fledgling. As a result, the possible expansion of Turkish financial and industrial capital in neighboring countries is hindered and the ability of Turkish finance capital to act as an economic arm of Turkish foreign policy may be further curtailed in the long run. The third constraint in Turkish foreign policy from an economic point ofview relates to the fragmented identity politics and fragile democracy. The single-party government in its first term (2002-2007) succeeded in creating relative stability. Yet, the political arena has started to become more polarized, especially after 2006. In this context, identity politics, rather than the politics of service, has started to dominate the political agenda. The escalation of political tension undermines economic stability and creates new fault-lines in the sustainability of economic growth. The formulation of a comprehensive strategy and active state coordination in guiding finance capital require common denominators that unify the society. This common denominator and the 'glue' of social cohesion was a desire for a strong democracy. Yet, this is not the case for Turkey even in the first decade of the 21 st century. As the synergy among state-business and businessbusiness relations is vitally important to create competitive advantage in foreign policy issues, the lack of coordination, maiuly due to the lack of consensus on the

841

major common issues, is likely to constraint Turkey's foreign policy potential in the medium-term. Conclusion Turkish foreign policy has been more assertive and independent in the first decade of the 21" century. Accordingly many studies have devoted herculean efforts to understand the basic dynamics and the driving logic of this new Turkish foreign policy activism. Apart from the crude "axis shift" discussions, which is rightly discarded as being simplistic and ideology-loaded, to capture the complexity of the emerging multi-polarity paradigm in question there has emerged two basic explanations. The first concentrates on the changing balance of power in world politics and tries to explain the new Turkish foreigu policy within the context of new security conceptions. The second approach sees Turkey's rising influence in the neighboring region in terms of the changing identity perceptions under the AK Party era. Since Turkish foreign policy is composed of multiple facets, the explanations presented above contribute to our understanding. However, this paper has argued that one crucial aspect, the political economy of Turkish foreign policy, has been relatively neglected in the recent literature. Accordingly, this paper has utilized the functionalist and interdependence approaches to reveal the driving logic of new Turkish foreigu policy. In this context, the cooperation in the low politics (or the trade and economy-related issues) is operationalized as the practical hand of Turkish policy makers to solve the disputes in high political issues via junctional spill-overmechanisms, which can be seen as material interests, multiple dialogue channels and perceptions. Finally, this paper has also discussed the limits and constraints of the functionalist political economy logic in Turkish foreign policy in the new era. Three main constraints, namely the industrial capacity in terms of competitiveness, the state-business and business-business synergy, and societal coherence in terms of domestic and foreign policy priorities, are the principal political economy challenges for the future. Endnotes >I- I want to express my special thanks to Prof. Ziya Onis and Assoc. Prof. Dr. M. Fatih Tayfur for their invaluable comments and contributions. I also benefitted from illuminating opinions of Insight Turkey editors. 1. For a concise articulation of Turkish foreign policy in the new era by the president of the Republic of Turkey, see the speech of Abdullah Gill, Turkish Foreign Policy in the New Era (Ankara: USAK Publications, 2010). 2. For details, see Gokhan Bacik, "Turkish-Israeli Relations after Davos: A View from Turkey," Insight Turkey, VoL 11, No.2 (2009), pp. 31-41; William Hale, "Turkey and the Middle East in the 'New Era," Insight Turkey, Vol. 11, No.3 (2009), pp. 143-159.

185

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I MUSTAFA KUTLAY

3. For crystal clear examples of this kind of approach, see Soner Cagaptay, "Is Turkey Leaving the West?," Foreign Affairs, October 26, 2009, retrieved from http://"WWVl.foreignaffairs.com/artides/65661/soner-cagaptay/is-turkey-leaving-the-west. 4. For detailed discussions, see Ziya Onis and Suhnaz Yilmaz, "Between Europeanization and Euro-Asianism: Foreign Policy Activism in Turkey during the AKP Era;' Turkish Studies, Vol. 10, No.1 (2009), pp. 7-24; Btilent Aras, "The Davutoglu Era in Turkish Foreign Policy," Insight Turkey, Vol. 11, No.3 (2009); Habibe Ozdal, D. Bahadir Dincer and Mehrnet Yegin (eds.), Miilakatlarla Turk Dlf Politikas: (Ankara: USAK Publications, 201_0), 3 volumes. 5. For the increasing impact of Middle Eastern-related developments on Turkey's security, see Tank Oguzlu, "Middle Easternization of Turkey's Foreign Policy: Does Turkey Dissociate from the West? ;' TurkiSh Studies, Vol. 9, No.1 (2008), pp. 3-20. 6. Cengiz Candar; "Turkey's 'Soft Power' Strategy: A New Vision for a Multi-Polar World," SETA Policy Brief, Brief No. 38 (2009), p. 10. 7. For example, see Fuat Keyman, "Turkish Foreign Policy in the Era of Global Turmoil;' SETA Policy Brief, Brief No. 39 (2009). 8. For example, see Tank Oguzlu and Mustafa Kfbaroglu, "Is the Westernization Process Losing Pace in Turkey: Who is to Blamet ," Turkish Studies, Vol. 10, No.4 (2009), pp. 577-593. 9. Hasan Selim Ozertem, "The Limits of Zero Problem Policy in the Caucasus: The Impasse in Turkish-Armenian Relations," Journal ofCentral Asian and Caucasian Studies, Vol. 5, No. 10 (2010), pp.146-156. 10. For exceptions, see Kemal Kirisci, "The Transformation of Turkish Foreign Policy: The Rise of the Trading State," New Perspectives on Turkey, No. 40 (2009), Pp- 29-57; Ziya Onis, "Multiple Faces of the 'New' Turkish Foreign Policy: Underlying Dynamics and a Critique," Insight Turkey (this volume). 11. Ernst B. Haas, "International Integration: The European and the Universal Process:' International Organization, Vol. 15, No.3 (1961), p. 372.

20. Melda Yaman-Ozturk and Fuat Ercan, "1979 Krizinden 2001 Krizine Tfukiye'de Sermaye Birikim Silled ve Yasanan Donusumler," Praksis, Vol. 19 (2009), pp. 55-93; Derya Giiltekin-Karaka9' Hem Hasmuz Hem Hsstmsz: 'Iiirkiyede Finans Kapitalin DonUjumu ve Banka Reformu (istanbul: lletlsim Yaymlan, 2009). 21. CBRT, Financial Stability Report, May-20ID, Vol. 10, p. 39. 22. For details of this kind of categorization, see Derya Gultektn-Karakas, "Sermaye'nin Uluslararasrlasmasi Surecfnde Tiirkiye Banka Reformu ve Finans Kapltal-ict Yeniden Yaprlanma," Praksis, Vol. 19 (2009), pp. 95-13123. Gultekin-Karakas, "Sermaye'nin Uluslararastlaemasr Surecinde

," pp. 106-112.

24. Gultekin-Karakas, "Sermaye'nin Uluslararasilasmasr Surecinde

;' p- 113.

25. Niliifer G6ziitok, "T~kiye'nin Smrr Otest Sirketlerl," Capital, Vol. 17, No. 200917. 26. Quoted in Gultekin-Karakas, Hem Hassmiz; Hem Htstmiz... , p. 246. 27. Hakan Yavuz, "Introduction: The Role of New Bourgeoisie in the Transformation ofthe Turkish Islamic Movement;' in Yavuz, H. (ed.}, The Emergence of a New Turkey: Democracy and the AK Party (Salt Lake City: The University-of Utah Press, 2006), p. 1; Sennur Ozdemir, MUSiAD: Anadolu Sermayesinin Doni1?umu ve Turk Modemlesmesinin Derinlesmesi (Ankara: Vadi Yaymlan, 2006). 28. For a comprehensive account of Ozal period from a foreign policy perspective, see Sedat Laciner; "The Ozal Period in Turkish Foreign Policy: Ozalism," VSAK Yearbook ofInternational Law and Politics, Vol. 2 (2009), PI'. 153-205. 29. Ergun Ozbudun and Fuat Keyman, "Cultural Globalization in Turkey: Actors, Discourses, Strategies;' in Berger, P. and Huntington, S. (eds.), Many Globalizations: Cultural Diversity in the Contemporary World (Oxford: Oxford University Press, 2002), pp. 296-319. 30. Berrin Lorasdagr and Fuat Keyman, Kentler: Anadolu'nun Diinusiimii, Tilrkiye'nin Geiecegi (Istanbul, Dogan Kitap, 2010). 31. See lYrOstAD's official website http://wwvv.musiad.org.tr.

12. Leon N. Lindberg, The Political Dynamics ofEuropean Economic Integration (London: Oxford University Press, 1963), p.10.

32. Orner Demir, Mustafa Acar and Metin 'Ibprak, "Anatolian Tigers or Islamic Capital: Prospects and Challenges," Middle Eastern Studies, Vol. 40, No.6 (2004), pp. 166-188.

13. Joseph Nye, "Neorealism and Neoliberalism," World Politics, Vol. 40 (1988), pp. 239-240.

33. See, for example, Landon Thomas, "Turning East, TUrkey Asserts Economic Power," The New York Times, July 5, 20ID.

14. This part is partially built upon my previous work in which Turkish-Greek relations were analyzed within the context of Interdependence theory, see Mustafa Kutlay, "A Political Economy Approach to the Expansion of Turkish-Greek Relations: Interdependence or Nett" Perceptions: Journal ofInternational Affairs, Vol. XIV; (Spring-Summer, 2009), pp. 91-119. 15. For a detailed account on interdependence theory, see Robert O. Keohane and Joseph S. Nye., "An Introduction," in Robert O. Keohane and Joseph S. Nye (eds.), Transnational Relations and World Politics (Massachusetts: Harvard University Press, 1973). 16. Robert O. Keohane and Joseph S. Nye, [r., "A Conclusion...:' p. 371. 17. This part is partially based upon my unpublished Msc. Thesis. See Mustafa Kutlay, "Transformation ofthe Finance Capital in Spain and Turkey: A Comparative Political Economy Perspective;' Unpublished Msc. Thesis, METU Graduate School of Social Sciences, 2010. 18. Ziya Onis, "Domestic Politics versus Global Dynamics: Towards a Political Economy of the 2000 and 2001 Financial Crises in Turkey;" in Onis, Z. and Rubin, B. (eds.), Turkish Economy in Crisis (London: Frank Cass, 2003), pp. 1-30. 19. Ziya Onis, "The Political Economy of Turkey's Justice and Development Party," in Yavuz, H. (ed.), The Emergence ofa New Turkey: Democracy and the AK Party (Salt Lake City: The University of Utah Press, 2006), p. 208.

86

Economy as the 'Practical Hand' of 'New Turkish Foreign Policy': A Political Economy Explanation

34. Berrin Koyuncu, "Kttresellesme ve Turk Isadamlan Dernegt," Uiuslararasc ili~kiler, Vol. 3, No.9 (2006), pp. 125-149. 35. For details of TUSlAD's EU perspective, see Mehmet Ugur and Dilek Yankaya, "Policy Entrepreneurship, Policy Opportunism, and EU Conditionality: The AKP and TUSiAD Experience in Turkey:' Governance; An International Journal ofPolicy, Administration, and Institutions, VoL 21, No.4, pp. 581-601; for details onM0siAD's EU perspective, see Yankaya, "The Europeanization of

MUSiAD..." 36. Yankaya, "The Europeanization ofMUSiAD...;' p. 10, 11. 37. Ahrnet Davutoglu, "Turkey's New Foreign Policy Vision: An Assessment of 2007," Insight Turkey, VoL 10, No.1 (2008), p. 78. 38. Nevin Donat, "Arcelik Misir'a Ortadogu'nun En Biiyiik Pabrtkasmi Kuracak'; Milliyet, June 22,2010. 39. For details, see Mehmet Babacan, "Whither Axis Shift: A Perspective from Turkey's Foreign Trade," SETA Policy Report, Report No.4, November 2010, p. 14. 40. Yevgeni Primakov, "Ttirkiye Ortadoguda 'Bolgesel Devlet' Oldu," Cumhuriyet, June 24, 2010.

I

Q~

MUSTAFA KUTLAY

41. For details on the issue, see www.treasury.gov.tr. 42. Mustafa Kutlay, "Is Turkey Drifting Away from the West? An Economic Interpretation (1/2)", Journal of Turkish Weekly, October 28, 2009. 43. Figures are calculated from the data provided by Undersecretariat of Foreign Trade. 44. Kerem Oktem, "Turkey's Foreign Policy in the MidIle East," IslamOnllne, December 7, 2009.

45. For the full list of agreements, see "Ioint Statement of the First Meeting of the High Level Strategic Cooperation Council Between the Syrian Arab Republic and the Republic of Turkey, Damascus;' retrieved from http://london.emb.mfa.gov.tr/ShowAnnouncement.aspx?ID=1900. 46. For details, see "joint Political Declaration on the Establishment of the High Level Cooperation Council among Turkey, Syria, Jordan and Lebanon': retrieved from http://www.mfa.gov.tr/ joint-political-declaration-on-the-esthablishement-of-the-high-Ievel-cooperation-council-amongturkey_-syria_-jordan-and-Iebanon.en.mfa.

Turkey's Neighborhood Policy: An Emerging Complex Interdependence]" KADRl KAAN RENDA*

47. Mehmet Babacan, "Whither Axis Shift: A Perspective from Turkey's Foreign Trade;' SETA Policy Report, Report No.4, 20ID, p. 14. 48. Meliha Benli Altumstk, "Turkey: Arab Perspectives;' Foreign Policy Analysis Series (Istanbul: TESEV Publications, 20ID), p. 8. 49. Altumsik, "Turkey: Arab Perspectives...,"p. 11. 50. The figures are retrieved from Turkish Statisticial Institute's database, TURKSTAT. 51. Ziya Orris and ismail Emre Bayram, "Temporary Star or Emerging Tiger? Turkey's Recent Economic Performance in a Global Setting:' New Perspectives on Turkey, No. 39 (2008), pp. 47-84. 52. Caner Bakir and Ziya Onis, "The Regulatory State and Turkish Banking Reforms in the Age of Post-Washington Consensus;' Development and Change, Vol. 41, No.1 (20ID), p. 103. 53. Dani Rodrik, "Uluslararasi Uygulamalar Isrgmda Tiirkiye Icin Sanayi Stratejisi Arayislari," TUSiAD-KOl; University Economic Research Forum Conference, December 25, 2010, IstanbuL 54. Peter Evans, in Search ofthe 21st Century Developmental State," CGPE Working Paper, Working Paper No.4, 2008. 55. Ziya Onis and Umut Tiirem, "Business, Globalization and Democracy: A Comparative Analysis of Turkish Business Associations;' Turkish Studies, Vol.2, No.2 (2001), pp. 94-120.

T

urki sh foreign policy is by no means immune to either the influence of the international system or the effects of its neighborhood's transformations. Given this background, after the end of the Cold War, the neglected historical and geographical reality of interconnectedness between Turkey and its environs resurfaced. Interconnectedness did not only open up new. horizons and create opportunities but also posed new problems and conflicts for Ankara. With the turn ofa new century, Turkey became more able and willing to benefit from increasing interconnectedness in its vicinity. Hence, this paper emphasizes the signiiicance of the interplay between domestic and regional dynamics and the effects of the unprecedented level of economic interdependence in contemporary Turkish foreign policy. The paper starts from the proposition that Turkish foreign policy went through two concomitant yet conflicting transformations after

,.. Department afEuropean Studies, King's College London, [email protected]

881

189

KADRi KAAN RENDA

the Cold war. The first transformation is defined in this paper as the "renationalization"? of Turkish foreign policy led by security concerns, which arose from regional turmoil and domestic conflicts. The renationalization of foreign policy refers to the revival of nationalism in the political discourse and the rise of security concerns regarding the preservation of the territorial integrity and national unity of the Turkish state in the new world order. Owing to renationalization, we witnessed the predominance of a securityfirst "assertive new activism"? in Turkish foreign policy throughout the 1990s. The second transformation, which Turkish foreign policy vaguely underwent in the 1990s, was the rise of "internationalism?" due to the concerns about Turkey's new role in international politics. Starting with the Helsinki summit in 1999 but perhaps even more profoundly after the twin economic crises of 2000 and 2001, internationalism was accompanied by economic liberalization and surpassed the renationalization process. This economic orientation already towards a liberal economy began in the late 1980s under the leadership of Turgut Ozal. Since the end of the 1990s Turkey has been pursuing liberal international policies based on commerce, cooperation, and soft power. In this paper, it is mainly argued that in the Turkey of the 2000s, an economy-oriented "new activism'" has prevailed over the security-first activism of the 1990s. This is due to the changes in domestic political structures and the increasing importance of economic growth and trade not only for Turkey but also for its neighbors. Hence, instead of finding conflict with its neighbors, recently at the top of Turkey's foreign policy agenda is a move to promote interstate cooperation.

Instead of finding conflict with its neighbors, recently at the top of Turkey's foreign policy agenda is a move to promote interstate cooperation

, )

t i ~

~ •

Against this historical background, this paper aims to explain mainly Turkey's relations with its neighbors through a liberal framework, which underlines the importance of interdependence and international cooperation among states. Robert O. Keohane and Joseph S. Nye put forward three defining characteristics of complex interdependence: i) the absence of a hierarchy among issues, if) increasing use of multiple channels of interaction between states, and iii) declining primacy of military force. I argue that recent developments in Turkish foreign policy, particularly Turkey'srelations with its neighbors resemble the characteristic features of complex interdependence. I further argue that the new activism in Turkish foreign policy seems, at least to me, to facilitate international cooperation among regional actors and to create a complex interdependence between Turkey and its neighborhood. 90

I

Turkey's Neighborhood Policy: An Emerging Complex Interdependence?

The paper proceeds as follows: The first part is devoted to the description of the main premises of the liberal model put forward by Keohane and Nye. The second part gives a brief overview of the main determinants of Turkish foreign policy and the relationships between Turkey and its neighbors directly after the sudden end of the Cold War. In the third part, I apply the analytical framework to the Turkish case and try to explain to what extent the characteristic features of complex interdependence can be observed within contemporary Turkish foreign policy. In the concluding part, I discuss the analytical deficiencies of complex interdependence and the practical handicaps in Turkish foreign policy's new activism. Complex Interdependence and International Cooperation Robert O. Keohane and Joseph S. Nye, in their seminal book Power and Interdependence, took interdependence seriously and brought forth a new liberal model that would help the students ofinternational relations to explore the transforming relationship among Western democracies. First and foremost, Keohane and Nye challenged the realist assumption that states are unitary and the major, or rather the only actors in the international arena. The authors pointed to the rise ofmultilateralism in interstate relations and the emergence of new interaction channels." Keohane and Nye's pluralist conviction of domestic politics attaches a paramount importance to nongovernmental actors. These new actors have gained a greater voice not only with regard to issues falling under low politics such as trade but also regarding issues at the level ofhigh politics such as decisions to send troops abroad. Second, Keohane and Nye viewed the high politics-low politics divide of the realist school incompatible with to days highly complex and diverse political agendas. The authors argued persuasively that military .security does not necessarily occupy the top of the foreign policy agenda anymore.' Looking through a liberal prism, contemporary students ofinternational relations are able to observe that the protection of citizens from fluctuations in the world economy and the promotion of the welfare of societies are nowadays regarded as the top priorities of democratic governments. In line with the second argument, Keohane and Nye also cast doubt on the realist assumption that anarchy in international relations inclines states to use military force whenever necessary. For them, power has evolved from brutal military force to "soft pow~r,"8 which implies political persuasion and cultural and social

191

Turkey's Neighborhood Policy: An Emerging Complex Interdependence? KADRi KAAN RENDA

attraction. Keohane and Nye suggested two analytical concepts, namely sensitivity and vulnerability to comprehend how power politics works between mutually dependent states. The authors explained that sensitivity is the "liability to costly effects imposed from outside before policies are altered to try to change the situation,"whereas vulnerability refers to "anactor's liability to suffer costs imposed by external events after policies have been altered,"? The main conclusion drawn by the authors is that "less vulnerable states will try to use asymmetrical interdependence in particular groups of issues as a source of power'?" In this respect, power is not one dimensional and material power is useful only if it reinforces an actor's ability to swiftly adapt to the new circumstances. Furthermore, power is not considered fungible because possession ofmilitary power does not automatically give leverage in every issue since the application of force among issue areas is too complex in interdependence. Of course, this does not mean that there is no room for power politics in their model. Military force can still be useful as a "bargaining tool" and an instrument for deterrence."

,,

",-

i KI

!~"

I~ •

Keohane, in another ground-breaking book, defines international cooperation as a reciprocal process which "takes place when the policies actually followed by one government are regarded by its partners as facilitating realization of their own objectives, as the result of a process ofpolicy coordination."" Cooperation is, thus, intrinsically reciprocal and highly political. In order for cooperation to flourish, a few conditions need to be satisfied. First, the perceptions of policymakers ought to shift from "myopic national conceptions of self-interest"!" to an enlightened and far-sighted use of national interests. The logic of a zero-sum game should be replaced by the logic of a positive sum strategy. Furthermore, uncertainty about other states' behavior should be alleviated by enhanced coordination and effective communication between states. What makes the political setting conducive to coordination and communication is each state's "reputation for reliability?" and the consistency between their words and deeds. In summary, changes in the perceptions of policymakers, reduction in uncertainty; and building a reputation or a new image in the eyes of others are prerequisites for effective international cooperation. It should be noted that the neoliberal school of international relations does neither overlook the role of state nor disregard anarchy in international relations. Nonetheless, unlike realism it puts emphasis on the possibility of long-lasting cooperation among states under anarchy and underlines the role of a myriad of actors and new kinds of interaction in international relations. Prior to the empirical analysis done in the remainder of the paper, the main characteristics of

921

Turkish foreign policy in the early post-Cold War period are outlined in the next section.

The Post-Cold War Era in Turldsh Foreign Policy The euphoria which spread among some Turkish politicians owing to the collapse ofthe Soviet Union vanished quickly when it was ascertained thattheir grandiose and political romanticism to make Turkey a regional superpower was at best yet to be accomplished, at worst an illusion. IS After the initial disappointment there came the reinstatement of the type of geopolitical thinking blended with power politics, which had overwhehningly dominated Turkish foreign policy since its foundation. To put it differently, in the 1990s increasing sensitivity of Turkey to its neighborhood forced Turkish policyrnakers to "regionalize" their policies, whereas increasing vulnerability of 'Iurkish society and particularly the Turkish state led to the "renationalization' of its foreign and security policies. Thus, the vulnerability of Turkey mounted in the early 1990s up until it reached a peak when Ankara resorted to the coercive diplomacy to deal with Greece over the KardaklImia Crisis in 1996 and Syria over its support for the Kurdistan Workers' Party (PKK) in 1998. The main driving force behind the assertive activism of Turkey during the 1990s was the renationalization of Turkish foreign and security policies. It is argued that due to the security-first approach and distrustful attitudes of the Turkish hardliners," good neighborly relations could never be maintained even though there was . a political will to do so in some circles ofTurkish politics. As a result, some scholars defined Ankara's attitude in the 1990s as one of a «coercive regional power;'1? which was poised to confront its neighbors with unilateral and military measures. From a neoliberal institutionalist point of view, throughout the 1990s, states in the region found themselves in a situation of political market fallure. Keohane defines market failure as "situations in which [... ] agreements that would be beneficial to all parties are not made'?" The optimal outcome for Turkey as well as for other states in the region would be enhancing interstate relations and facilitating cooperation as much as possible. Because of myopic self interests, deep mistrust and a lack of effective communication, any commitment to international cooperation from Ankara waxed and waned quickly. The initiatives which had succeeded in forming institutional entities such as the Organization of the Black Sea Economic Cooperation and the Economic Cooperation Organization eventually

proved futile throughout the 1990s. Two main reasons for the failure to achieve an optimal outcome in the region should be highlighted. First of all, there was an uncertainty across the region and

193

Turkey's Neighborhood Policy: An Emerging Complex Interdependences

mistrust between states. Uncertainty was high because each state lacked reliable information about the intentions of its neighbors. Turkish traditional republican policymakers were, thus, extremely ~us­ picious and cautious about their neighbors," most of which were perceived to be the usual suspects who were not only giving political support to secessionist and fundamentalist terrorist organizations in Turkey but also clandestinely supplying them arms, hosting terrorist training camps, and even providing refuge to militants. In an era of great uncertainty and recurrent hostilities, and even though the political aspirations to become a regionalleader were floating around, Turkey pursued an extremely cautious, if not paranoid, foreign policy that favored a security-oriented heavy-handed approach over a welfare-oriented cooperative approach.

replaced its longstanding security-driven objectives of foreign policy with ones stemming from an economy-oriented pragmatic mindset

Secondly, myopic self-interests shaped by a zero-sum mindset were predominant among Turkish policymakers. The repercussion of myopic self-interests was the resurgence of security concerns and the reinforcement of the high politics versus low politics divide inherited from the Cold War. In the parlance ofcomplex interdependence, because of the widely-held perception of a rigid hierarchy between military and political issues on the one hand and economic and social ones on the other TUrkey lacked linkage strategies that might incorporate several issues into one package. Had the states in the region diversified their priorities and been more prone to sealing package deals by making trade-offs, the ultimate outcome could have been the development ofa cooperation on solid and even institutionalized foundations.

•

According to Keohane, states are able to redefine their self interests so as to associate their own well-being with other states'." However, Keohane is also cognizant of the fact that "Commerce by itself does not ensure peace, but commerce on a nondiscriminatory basis within an orderly political framework promotes cooperation on the basis of enlightened national conceptions of self-interest that emphasize production over war'?' Therefore, without suitable milieu conditions trade and interdependence would not result in cooperation. The capture of the leader of a terrorist organization, the PKK, the influence of the European Union (EU) on Turkish domestic political structures since Turkey was granted candidate status in 1999, and the coming of a new ruling elite to power are the key factors that initially eased the psychological state of emergency and the feeling 94

of insecurity prevalent in Turkish foreign policy in the 1990s." This eventually rendered the Turkish state less vulnerable and paved the way for the advent of new actors, new channels of interaction, and new strategies in the making of foreign policy.

Restructuring Domestic Politics and Repositioning Turkey in Regional Politics Turkey has been undergoing two complementary transformations. One of them is democratization and the other is economic Hberalization. Both had their inception and were put in place during the Ozal era but were disrupted in the 23 1990s and apparently gained new momentum in the early 2000s. As free trade and democracy became the main pillars of Turkish politics soon after Turkey was granted candidacy status by the EU in 1999, Ankara replaced its long-standing security-driven objectives offoreign policy with ones stemming from an economyoriented pragmatic mindset. The remainder ofthe paper will analyze the effects of free trade and democratization on Turkish foreign policy and its repositioning in

the center of regional politics.

Variation ofactors and issues A very significant dilemma for Turkey has long been how to become more influential in regional politics while putting her own house in order. The can - . didacy status given by the ED at the Helsinki European Council in 1999 helped TUrkey out by heralding a new phase oftransformation in Turkish politics. Thus, democratization during the EU accession process altered the roles of several political actors in the domestic arena. Ofthese actors, it was most of all the military that had to relinquish its power. The Turkish Armed Forces (TAP) was indeed considered by many observers to be the most influential institution in setting the pace and direction of Turkish foreign policy since the Cold War. The military's hard-line approach impinged on foreign policy and manifested itself through an increase in the military budget and an enhanced role of the National Security Council (NSC) throughout the 1990s. The primary reason behind the erosion of the military's clout is without doubt the reforms demanded by the EU regarding the civilian control of the military. The reforms inevitably curbed the military's power in the foreign policymaking process as well. This paved the way for an increasing civilian influence in the field of foreign policy.24 As a matter of fact, the Europeanization process in the post-Helsinki era has belatedly transformed the civil-military relations in accordance with the socio-political dynamics of the post-Cold War. 1

1

95

- - - - - - - - - - -_ _IIIIIIIIliliiii_-

KADRI KAAN RENDA

The change in civil-military relations, the transformation of the interaction between state and society, and the division of labor and authority among different state institutions infused a new vigor and enthusiasm into Turkish foreign policy. This opened up new windows of opportunities, which domestic actors availed themselves of in order to be better heard on the national stage. Seldom had non-governmental organizations (NGOs) played a significant role in the policymaking ofThrkey. The non-state actors could only exert trivial influence on the decision-making process since the national interest was very strictly defined and solely articulated by an exclusive circle of foreign policy elites within the state. The formerly excluded actors of civil society and a new middle class willing to interact with neighboring countries much more than ever slowly but steadily have gained leverage in foreign policy; as Turkey's democratization and liberalization processes have been furthered. A new class of businessman no longer buys the overselling of threats by hardliners. Indeed, they tend to establish close economic ties and then perhaps social bonds with the neighboring countries. The highly defensive and cautious approach of the traditional foreign policy elite in the foreign ministry and the military was abandoned by the Justice and Development Party (JDP), which came to power with a landslide victory in 2002. The JDP's avowed intent is to increase economic growth and trade with the country's neighbors." In this new era of Turkish foreign policy the meaning of security, welfare, and democracy are inextricably intertwined. The ultimate dominance of high politics over low politics was challenged, with the outcome being the abandoning of hierarchy among issues and an increasing variation in foreign policy preferences, as assumed by the complex interdependence model. Ahmet Davutoglu, the foreign minister of Turkey, also underscores the prominent role of private sector firms in driving the country's foreign policy and strategic vision." An example of this new perspective in practice is the "Industry for Peace" initiative proposed by the Union of Chambers and Commodity Exchanges of TUrkey; which aimed to revitalize industry in Gaza, Palestine in order to provide jobs and livelihood for the people of Gaza. The second transformation is observed in the transformations in Turkey's economic structures and a new mentality in economic policy making. The twin economic crises in 2000 and 2001 urged Turkish statesmen to stabilize the economy and find new markets so as to expand trade volume which would yield the economic growth that Turkey desperately needed. Having been an "emerging market economy; Ankara was left with no choice but to enhance trade relations with its neighbors. Thus, Turkey has evolved into a "trading state":" and its quest

961

Turkey's Neighborhood Policy: An Emerging Complex Interdependence?

for new markets and new business partners has continued since then. It is noteworthy that the Customs Union between Turkey and the EU contributed to the liberalization of the Turkish economy more than anything' else. Several sectors of the Turkish economy have virtually reached the standards of the EU and have become ready and eager to find new trading partners elsewhere. Consolidation and stabilization ofthe economy encouraged good relations with Turkey's crucial environs. The trade statistics in table 1 and table 2 give strong evidence of the crucial role of trade for the Turkish economy in general and in particular of the importance of trade with the neighbors. Table 1 highlights the openness of the Turkish economy and its integration in international trade. More than one fourth of the gross domestic product of Turkey came from international trade in 2008, whereas the share of international trade was approximately 17.5 percent in the mid of the 1990s. Table I: International trade in goods and services as a percentage of GDP

Year

Share

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

17.5% 19.5% 21.8%

20.8% 19.4% 21.6%

25.4% 24.4% 23.5%

24.9% 23.6%

25.1% 24.9% 26.1%

Source: QEeD Factbook201O. Retrieved December 15, 2010, from http://www.oecd-ilibrary.org/economtcs/oecd-factbook_18147364

Table 2 depicts the detalls of Turkey's trade volumes with its neighbors plus with Africa, the EU, Israel, the Middle East, and Russia for the years between 1999 and 2008. The data for 2009 is deliberately excluded from the table as the international trade volumes fell dramatically owing to the recent recession in the world economy. The trade volume in some cases has increased more than ten

Turkeis Neighborhood Policy: An Emerging Complex Interdependence? KADRi KAAN RENDA

times since 1999. The volumes of trade with Greece, Iran, Iraq, Russia, and Syria in 2008 are respectively around Jive,ten, four, and three times higher than in 1999. In addition, Turkey as a foreign direct investor has increasingly financed various infrastructure and engineering projects in its neighborhood. According to a report published in April 2010, "As of September 2009, 500 Turkish companies had invested in Iraq, and Turkey as a country was among the top ten foreign investors,"" Table 2: Trade volumes with selected countries (US dollar at current prices bflli Year Partner

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Export

n,a

n.a

na

n.a

n.a

n.a

n.a

n.a

n.a

na

Import

n,

n.a

n.a

n.a

n.a

n.a

0.391

OAOO

0.560

1.489

Flow

Azerbaijan

Export

0.248

0.230

0.225

0.231

0.315

0.403

0.528

0.695

1.046

1.667

Import

0.440

0.956

0.780

0.646

0.122

0.135

0.272

0.340

0.329

0.928 2.151

Export

0.233

0.252

0.299

0.380

0.621

0.892

1.179

1.567

2.060

Import

0.295

00465

0.393

0508

0.689

0.955

1.190

1.661

1.949

1.840

Georgia

Export

0.114

0.131

0.144

0.103

0.155

0.199

0.271

00407

0.645

0.997

Import

0.932

0.155

0.127

0.137

0.273

0.302

0.302

0.344

0.289

0525

Greece

Export

0.406

0.437

0.476

0.590

0920

1.166

1.126

1.602

2262

2.429

Import

0.287

0.430

0.266

0.312

0.427

0592

0.726

1.044

0.950

1.150

Iran

Export

0.157

0.235

0.360

0.333

0.533

0.810

0.912

1.066

1.386

2.029

Bulgaria

Iraq

Syria

Russia

Israel

EU Africa

Middle

Import

0.635

0.815

0.839

0.920

1.860

1.961

3.469

5.626

6.613

8.199

Export

n.a

n.a

n.a

n.a

829

1.815

2.748

2589

2.811

3.916

Import

n.a

n.a

n,

n.a

112

00467

0.458

0.375

0.644

1.320

Export,

0.232

0.184

0.281

0.266

0.410

0.393

0.551

0.609

0.797

1.l15

Import

0.307

0.545

0.4{}3

0.506

00413

0.357

0.272

0.187

0.376

0.639

Export

0.588

0.643

0.924

1.172

1.367

1.858

2.377

3.237

4.727

6.483

Import

2374

3.886

3.435

3.891

5.451

9.027

12.869

17.806

23.506

31364

Export

0.585

0.650

0.805

0.861

l.083

1.309

10466

1.529

1.658

1.935

Import

0.298

0.505

0.529

0.544

0.459

0.714

0.803

0.782

1.081

1.447

Export

15.420

15.664

17.545

20.416

27.397

36.524

41.365

47.930

60.406

63.394

Import

22.529

28.526

19.823

25.688

35.140

48.077

52.629

59.338

68.589

74.803

Export

1.049

0.901

1.031

1.203

1.527

2.150

2.558

3.365

40429

6.558

Import

1.075

1.787

1.879

1.823

2.075

3.012

3.786

4.714

5.702

6.490

Export

2.225

2.031

2.575

2.735

4.511

6.797

8.986

9.881

13.186

23.330

Import

2299

3.543

3221

3.310

4.861

6.194

8.836

11.790

12.017

16.003

Ea"

Source: Compiled from the IMP and WTO databases by the author.

981

The democratization process coupled with liberalization and internationalization in the Turkish economy made certain that at the international level, Ankara is no longer able to pursue a heavy-handed policy with a security-first mindset. In addition, the failure of the Turkish Grand National Assembly to ratify a motion that would give permission to the U.S. to use Turkish military bases during the Iraq War on March 1, 2003 can arguably be considered as a turning point where credibility of Turkey as a reliable partner increasedsigniJicantly in the eyes of its southern neighbors." These two complementary processes and the Significant historical event gave the boost to a new activism in Turkish foreign policy and provided ample room for repositioning Turkey at the center of

regional politics.

country Armenia

Multiple channels of interaction

To Turkish politicians, the only way to improve welfare and maintain security in the region seems to be the development of long-lasting stability and peace through advancing collaboration with various political actors, and the enhancement of political cooperation with neighboring states via different channels of interaction. Ankara has been trying to reduce uncertainty and alleviate the distrust that overshadows it relations with Turkey's neighbors by forming trans governmental relations between the state institutions of Turkey and their counterparts in other states. These new channels reinforce and complement interstate relations, even if they also challenge the power of the traditional foreign policy elites. In· this paper, it is not possible to give every detail of Turkey's relations with each neighbor. A few examples should suffice to illustrate the change in the conduct of foreign policy. Greek-Turkish relations entered a new phase with the lifting ofthe Greek veto over Turkey's ED bid at the Helsinki European Council in 1999. From then on, confidence-building measures between Turkey and Greece were taken, and the interstate and societal interaction between the two countries developed further. A Turkish delegation visited Greece on May 14-15, 2010. The Turkish delegation included cabinet ministers, bureaucrats, and more than 100 husmessmen." During the visit a high level cooperation council between the cabinets ofthe two countries convened for the first time and several bilateral accords were signed Similar meetings and high level strategic cooperation councils held between Turkey, Syria, Iraq, and Russia exemplify the variety of interaction channels and different mechanisms for conducting foreign policy. In the council meetings, cabinet ministers, and bureaucrats from different ministries gather around a table to discuss several issues ranging from trade to agriculture, tourism, energy; and

199

Turkey's Neighborhood Policy: An Emerging Complex Interdependence?

KADRI KAAN RENDA

J

! ::! J The driving objective for Turkey seems to be to cultivate a new image as a peace-promoting and security-providing country.

transportation. The first meeting of the Turkey-Syria High Level Strategic Cooperation Council of Ministers was held on December 22-23, 2009." Moreover, Turkey, Syria, Jordan, and Lebanon formed the "Quadripartite High Level Cooperation Council" (HLCC) and expressed their political will to create a zone of free movement of goods and persons." As a result of these meetings. a series of agreements and protocols on cultural exchange, education, health, security. trade, and transportation were signed between Turkey and Syria, Iraq, Greece and Russia. In addition to these transgovernmental yet bilateral mechanisms of foreign policy, Turkey organized and hosted multilateral meetings. The European UnionOrganization of Islamic Conference summit, the Neighboring Countries of Iraq Conference, the Caucasus Stability and Cooperation Pact, and the Trilateral Balkan summits are to name but a few. Of these initiatives, the Neighboring Countries of 100

I

Iraq Conference is very well-known. The Even though Turkey remains a initiative started in 2003 within a small state preoccupied with regional group of countries neighboring Iraq and turmoil in the Middle East then expanded and included the repreand the Caucasus recently, sentatives of the UN and G-S countries. it has been pursuing soft Alongside regional engagements, Turkey also aims to improve the relations power policies that are more between the East and the West. The Almultilateral, cooperative, and liance of Civilizations, co-sponsored by diplomatic than ever before Spain and Turkey, epitomizes Turkey's efforts to enhance dialogue aud cooperation between different cultures and religions. The primary aim of the Alliance is to "improve understanding and cooperative relations among nations and peoples across cultures and religions, and to help counter the forces that fuel polarization and extremism'?" To this end, the Alliance of Civilizations facilitates interaction among different social groups from different countries through several projects on civil society; youth, migration, and media. Turkey is also intent on fostering relationships between societies. tbrahim Kahn, adviser to the Prime Minister, underlined this objective in an interview by stating that "Rather than state to state relations, it is more a question of improving people to people relationsf'" In line with this approach the visa exemption protocols signed between Turkey and Syria, Lebanon, Jordan and Libya, exhibit Turkey's resoluteness to facilitate transnational activities in the region. Furthermore, in order to increase the level of interaction among societies and between economies of the region new transportation projects were undertaken. For instance, the railway line built before the First World War to connect Istanbul and Baghdad was re-opened in February 2010. 35 These various bilateral and multilateral meetings and other initiatives underpin the agenda-setting power and facilitator role acquired lately by Turkey in regional politics. As a result, Turkey has become more connected to its environs and more able and willing to benefit from the peaceful interactions in its neighborhood.

Primacy ofsoft power The third characteristic feature of complex interdependence is the minor role of military force. The change in Turkish strategic thinking and its perception of regional politics rendered the use of military force inappropriate on the way to realizing the new strategy envisaged by former scholar Ahmet Davutoglu,

1101

KADRi KAAN RENDA

Foreign Minister Davutoglu, in his book called "Strategic Depth'?" draws up the blueprints of a new doctrine for Turkish foreign policy. The Davutoglu doctrine conceives Turkey as a central country, comparing it to Germany, Russia, and Japan. According to Davutoglu, Turkey had not been wielding influence on the regional politics as she should be." Starting with this assumption, he puts forth a new strategic framework, which helps Turkey's bid in playing a major role in the post-Cold War international system. The Davutoglu doctrine incorporates the principles of protecting and widening civil liberties, a zero-problems policy with neighbors, a proactive and preemptive peace diplomacy; a multidimensional foreign policy, and a rhythmic diplomacy." All together, this aims to enhance Turkey's presence and influence, and ultimately redress its image on the international stage. Even though Turkey remains a state preoccupied with regional turmoil in the Middle East and the Caucasus recently; it has been pursuing soft power policies that are more multilateral, cooperative, and diplomatic than ever before." President Gill, for instance, envisages a Turkey which is "responsible to take care of the region around us. Some problems are directly related to us. With some we don't have a direct link. We want to contribute to a resolution of them alI:'4D President Gill's statement underscores that Turkey has turned into a responsible power, which not only possesses military strength but is also able to use political, diplomatic, and cultural instruments to create a favorable environment in which cooperation can last longer.

At this point it should be noted that the secondary role for military force does not mean that security is no more one ofthe top priorities of Turkey. On the contrary, security maximization is still a dominant concern for Turkey; however, the way to maximize security is now the creation of relations of interdependence. For Davutoglu, Turkey has to find the balance between security and democracy. The use of military force in any occasion should be the last resort, should conform to the soft power of Turkey and not impair civil liberties and human rights." A strong army is, thus, not an end in itself; it is rather one of the means that helps Turkey to maintain its international image and credibility. The implications ofthis change in the use ofmilitary force are twofold, namely a decrease in the military expenditure/gross domestic product ratio and transformation of military strategy. Table 3 illustrates the steady decline in military expenditure since 1999. Whereas Turkey spent approximately four percent of its GDP on the military in 1999, the allocation ofGDP to the military was virtually halved in 2008. 1021

Turkey's Neighborhood Policy: An Emerging Complex Interdependence?

Table 3: Military Expenditure/Gross Domestic Product ratio for the period 1990-2008

Year

Value%

1990

3.5%

1991

3.8%

1992

3.9%

1993

3.9%

1994

4.1%

1995

3.9%

1996

4.1%

1997

4.1%

1998

3.3%

1999

4%

2000

3.7%

2001

3.7%

2002

3.9%

2003

3.4%

2004

2.8%

2005

2.5%

2006

2.5%

2007

2.2%

2008

2.2% Source: SIPRIdatabase

Retrieved December 15, 2010, from http;llmilexdata.sipri.orglresult.php4

Apart from the military budget cuts, another implication of Turkey's new understanding of power is the transformation of its military strategy. Turkey today tends to establish flexible alliances. The country's new civil and economic power needs more room to maneuver easily in regional politics. This is why the principle of collective security was reevaluated and the dominance of the concept of alliance, which originates from the Cold War, was challenged. A new understanding of the notion of collective security as cooperative rather than conflicting fully conforms to the current priorities of Turkish foreign policy because "Collective security arrangements are inclusive, since they are designed to deal with threats among members; alliances are exclusive because they deter and defend against external threats."? Ankara's willingness to playa mediator and a peace-maker role 1103

Turkey's Neighborhood Policy: An Emerging Complex Interdependence? KADRi KAAN RENDA

Turkey has evolved from a coercive power into a non-aggressive and cooperative state, or rather a soft power

in the Middle East in the talks between Syria and Israel, and its contribution to the negotiations between the West and Iran over the Iranian nuclear proliferation, are the highlights of Turkey's inclination towards collective-cooperative secnrity arrangements and flexible alliances. Nevertheless, NATO and the relations with the U.S. per se will most probably remain vital to Turkey in the future, due to instrumental reasons (I.e. modernization of the military) and political reasons (i.e. Western support for Ankara's international image as a mediator and securityprovider). Thus, it remains to be seen whether Turkey can achieve complete flexibility without alienating itself from the West.

Tnrkey's new political-military strategy partly accounts for the deterioration of relations with Israel too. It is argued that Turkey no longer needs Israel as an ally against imminent threats coming from its neighbors." Besides, the Israeli government's attitude on the Palestine question fuels domestic outrage against its policies in Turkey, and the heavy-handed approach to addressing the issue of Iran's nuclear proliferation collides with Turkeys priority of promoting collective security that encompasses every state in the region. These changing dynamics of TUrkey-Israel relations notwithstanding, Israel remains a strong economic partner of Turkey and a key actor in the regional eqnation for the establishment of enduring peace and continuous economic development across the region. Overall, Turkey and its neighbors have found themselves in economic interdependencies. 1hrough this Turkey wields greater influence in different issue areas such as trade, energy policy, foreign direct investment, and transportation. All of the initiatives and new mechanisms ofstate to state relations strive for the promotion of interaction and cooperation across the region. The driving- objective for TUrkey seems to be to cultivate a new image as a peace-promoting and securityproviding country. The new preferences, or rather redefined national interests, of Turkey correspond well to the liberal school's emphasis on the importance of reputation and image in today's world politics and the vital role of credible information and enhanced interaction in reducing uncertainty and forging cooperation among states. As Wallander and Keohane put it succinctly "being able to provide credible information to others is a source of Influence'?" Turkey, to a certain extent, gives the right signals and provides credible information, which in turn increases the chances of arriving at an optimal choice through the correction of market failure across the region. All in all, with the assistance of those initiatives and new mechanisms of foreign policy, Turkey has earned credibility and a new 1041

image in the international arena, which can be turned into economic, diplomatic and political capital. Conclusion

The new activism in foreign policy has deepened interdependence between Turkey and its neighborhood

Tnrkish foreign policy has lately transposed to a liberal and cooperative standpoint owing to the transformation of domestic politics through the process of democratization and the assumption of power by a new political elite espousing neoliberal ideas and a conservative interpretation of modernization. Dialogue with, rather than deterrence of, neighbors has become the primary objective of contemporary Turkish foreign policy. Hence, Turkey has evolved from a coercive power into a non-aggressive and cooperative state, or rather a soft power. Of course, it is better not to jump to the conclusion that complex interdependence between Tnrkey and its neighbors has been achieved. Nor has Turkey become a regional hegemon. The purpose of this paper was to show that the neoliberal perspective of Keohane and Nye can shed light on the change in recent years of Turkey's relations with its neighbors. However, this economy-oriented neoliberal analysis is best seen as a snapshot of Turkish foreign policy from one angle, rather than a comprehensive analysis.

, I

As for the analytical handicaps of complex interdependence, it should be kept in mind that complex interdependence was proposed at first as a model and an ideal type that gave a liberal account of the changing relations between Western democracies. Thus, complex interdependence grows to maturity if and only if pluralist democracy is institutionalized with all its aspects. Second, the complex interdependence model is heavily economy-oriented and neglects ideological and cultural factors. However, it is generally argued that Turkey's new activism in the region has cultural-religious motivations too. The JDP's conservative democratic political ideology, supported by a new middle class whose social and economic values and beliefs are a mixture of Islamic interpretation of modernization and globalization, is considered by many to be the foremost catalyst behlnd Turkey's policies vis-a-vis its neighbors.

~

The new activism in foreign policy has deepened interdependence between Turkey and its neighborhood. However, there may be some drawbacks of and impediments to the promotion of complex interdependence in the region. Of these, the most important is the interplay between the futnre of Iraq and the prospect of a solution for the Kurdish issue in Turkey exemplifies how a domestic issue can \105

Turkey'sNeighborhoodPolicy:An EmergingComplexInterdependence?

Turkey has gained a strong foothold in regional politics through the new mechanisms .of interaction and its soft power

remain a roadblock on the road to further development of regional cooperation. Secondly, cooperation in the region depends on how much Turkey will persevere with its efforts to foster friendly engagement and peaceful change. The perseverance of Turkey is commensurate with the political will of Turkish politicians and the economic capabilities ofthe state to back activism in foreign policy. Thirdly, the policy of making friends even with erstwhile adversaries such as Armenia and Iran has the potential to deteriorate relations with closed allies such as Azerbaijan and Israel." Lastly, Turkey is still cautiously welcomed by quite a few regional actors. The neighbors remain wary ofTurkish intentions and the new activism in foreign policy might generate unintended results and a backlash against the country's dynamic policies.

~II

f~

"""

n

In conclusion, it seems that Turkey has gained a strong foothold in regional politics through the new mechanisms of interaction and its soft power. Nonetheless, being a soft power is a much more burdensome task and at times frustrating than is widely believed. Keohane points out that any state which aspires to be a soft power needs not only to attract "the desire of people in one country to imitate the institutions and practices prevailing in another, but also [to enhance] their ability to do SO:'46 If Turkey wants to wield a power within the region, it needs i) to assist other countries to develop their democratic institutions, and ii) to increase economic growth and promote fair distribution of welfare across the region. This could be done by eliminating "public bads" such as terrorism, fundamentalism, and proliferation of nuclear weapons as well as providing "public goods" such as economic assistance, conflict free environment and regional institutions that can reach out to every actor in the neighborhood. Endnotes 1. Previous drafts of this paper were presented at the Graduate Conference of the European Consortium for Political Research held in Dublin, August Su-September 1, 2010 and at the Annual Conference of the University Association for Contemporary European Studies held in Bruges, September 6-8, 2010. I would like to thank anonymous referees for their useful comments.

2. On this point I draw on Jan w. Honig. Jan w. Honig, "The'Renationalizatiori' of Western European Defense;' Security Studies, Vol.2, NO.1 (Autumn, 1992), pp.122-138. 3. For instance, see Alan Makovsky, "The New Activism in Turkish Foreign Policy;"SAIS Review, Vol.19, No.1 (1999), pp.92-1l3; Sabri Sayari, "Turkish Foreign Policy in the Post-Cold War Era: The Challenges ofMulti-Regionalism;' Journal ofInternational Affairs, Vo1.54, No.1 (Fall, 2000), p.170. 4. Internationalism is generally defined as "a set of beliefs to the effect that if there is more law, organization, exchange, and communication among states, this will reinforce peace and security." 106

Kje1l Goldmarm, The Logic of Internationalism: Coercion and Accommodation (London and New York: Routledge, 1993), p.2. 5. For the new activism during the Justice and Development Party era, see Ziya Oni~ and Suhnaz Yilmaz, "Between Europeanization and Euro-Asianism: Foreign Policy Acttviam in Turkey during the AKP Era;" Turkish Studies, Vo1.10, No.1 (March, 2009),pp.7-24. 6. Robert O. Keohane and Joseph S. Nye, Power and Interdependence: World Politics in Transition (Glenview, 11: Scott Foresman and Co., 1989), 2nd Edition, pp.24-25. 7.1bid., pp.26-27. 8. Joseph, S. Nye, Bound to Lead: The Changing Nature of American Power (New York: Basic Books, 1990). 9. Keohane and Nye, Power and Interdependence, p.13.

10. Ibid., p.32. I!. Ibid., p.2S. 12. Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton, New Jersey: Princeton University Press, 1984), pp.51-52 (italics original).

13. According to Keohane, "Myopic self-interest refers to governments' perception of the relative costs and benefits to them of alternative courses of action "With regard to a particular issue, when that issue is considered in isolation from others." Ibld., p.99 (italics original). 14. Robert 0. Keohane, "International Relations and International Law: Two Optics," Robert. 0. Keohane (ed.), Power and Governance in Partially Globalized World (London, New-York: Routledge, 2002), p.12!. 15. Mustafa Aydm, "The Determinants of Turkish Foreign Policy, and Turkey's European Vocation;' The Review ofInternational Affairs, Vol.3, No.2 (Winter, 2003), p.323. 16. Sevgi Drorlan, "Turkey: Security, State and Society in Troubled Times," European Security, Vol 14, Issue 2 (June, 2005), p.262. 17. Ziya Onls, "Turkey and the Middle East after September 11: The Importance of the EU Dimension," Turkish Political Quarterly, Vol.2, No.3 (Winter, 2003), p.2. 18. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy, p.82. 19. William Hale and Ergun Ozbudun, Islamism, Democracy and Liberalism in Turkey: The Case ofthe AKP (London and New York: Routledge, 2010), p. 120. 20. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy, p.Ll I. 21. Robert O. Keohane, "International Liberalism Reconsidered;' Robert O. Keohane (ed.), Power and Governance in Partially Globalized World (London, New York: Routledge, 2002), pA9 22. Philip Gordon and Orner Taspmar, "Turkey on the Brink;' The Washington Quarterly, Vo1.29, No.3 (2006), p.60. 23. Kemal Kirisci, "Transformation of Turkish Foreign Policy: 'The Rise of the Trading State," New Perspectives on Turkey, Vol. 40 (Spring, 2009), p.33. 24. Kemal Kirisci, "Turkey's Foreign Policy in Turbulent Times;' Chaillot Paper No.92 (Paris: Institute for Security Studies, September, 2006), p.49. 25. Hale and Ozbudun, Islamism, Democracy and Liberalism in Turkey: The Case of the AKP, p.12!. 26. AhmetDavutogIu cited in Turkey and the Middle East: Ambitions and Constraints, International Crisis Group Europe Report No.203 (April, 2010), p.10.

1107

27. Kemal Klrisci, "Transformation of Turkish Foreign Policy: The Rise of the Trading State:' p.42-52. 28. Turkey and the Middle East: Ambitions and Constraints, p. 10. 29. Ramazan GOzen, "Causes and Consequences of Turkey's Out-of-War Position in the Iraq War of2003:' The Turkish Yearbook ofInternational Relations, Vo136 (2005), p.86. 30. Helena Smith, "Turkish Prime Minister in 'revolutionary' visit to Greece:' The Guardian, May 13, 2010. 31. The joint statement of the meeting is available on the official website of Turkish Ministry of Foreign Affairs, retrieved December 15, 2010, from http://www.mfa.gov.tr/turkiye---suriye_ydsik_ C -toplantisi-ortak-bildirisC-22- za-eraltk-sam.en.mfa.

Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Economic Policy

32. The details of the High Level Cooperation Council are available on the official website of Turkish Ministry of Foreign Affairs, retrieved December 15, 2010, from http://www.mfa.gov.tr/ joint-political-declaration-on-the-esthablishement_of_the_high-Ievel-cooperation-council-among_ turkey_ -syria~-jordan-and-lebanon.en.mfa.

1:1

ALTAYATLI*

ii,

I

33. See the official website of the United Nations Alliance of Civilizations. Retrieved December 15,2010, from httpv/wwwunaoc.org.

:1

I;

34. Nicolas Birch, ']\ Neo-Ottomanism: Interview with Ibrahim Kalin," The MajalIa, November 26,2009.

',i I

~

35. Jonathan Head, "Iraq-Turkey railway links re-opens," BBe News, February 16, 2010.

!ii

36. Ahmet Davurogln, Stratejik Derinlik [Strategic Depth) (istanbul: Kiire Yaymlan, 2001).

:'

37. Davutoglu, "Turkey's Foreign Policy Vision: An Assessment of 2007:' pp.78-79. 38. Abmet Davutoglu, "Turkey's Zero-Problems Foreign Policy;" Foreign Policy, (May, 2010). 39. Tank Oguzlu, "Soft power in Turkish foreign policy:' Australian Journal ofInternational Affairs, Vo1.61, Issue 1, (2007), pp. 81-97. 40. Gill quoted in Turkey and the Middle East: Ambitio~s and Constraints, p. 4-5. 41. Ahmet Davutogln, "Turkey's Foreign Policy Vision: An Assessment of2007:' Insight Turkey, VoI.10, No.1 (January-March, 2008), p.79. 42. Celeste A. Wallander and Robert O. Keohane, "Risk, Threat, and Security Institutions," Robert O. Keohane (ed.), Power and Governance in a Partially Globalized World (London, New York: Routledge, 2002), p.92. 43. Tank Oguzlu, "The Changing Dynamics of Turkey-Israel Relations: A Structural Realist Account," Mediterranean Politics, Vol.I5, No.2 (July, 2010), p.280. 44. Wallander and Keohane, "Risk, Threat, and Security Institutions:' p.95. 45. Hale and Ozbudun, Islamism, Democracy and Liberalism in Turkey: The Case of the AKP, p.146. 46. Robert o. Keohane, "The Globalization ofInformaI Violence, Theories ofWorld Politics, and the "Liberalism of Fear':' Robert O. Keohane (ed), Power and Governance in Partially Globalized World (London, New York: Routledge, 2002), pp.282-83.

n inescapable feature of the current era of globalization is the increasing dependence of the state on capital, which, among numerous other effects, has influenced the way we think about the patterns of interaction between the state and business.' Until the early 1990s, the state was thought to be subject to the domestic pressure of the business community since it depended on capital for the pursuit of any objective that required material resources. However, with the emergence of a greater interconnectedness brought about by globalization, international dynamics began to be highlighted as the leading factor influencing the policies of the state. It was the dawn of a new type ofeconomic space called by Manuel Castells as the "space of flows" whereby the functioual integratiou of production and trade units across boundaries through information networks enabled increased flexibility and decentralization in production and management."

A

* Department of Political Sdence and International Relations, Bogazifi University, [email protected]

1081

1109

Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Economic Policy

These two arguments, one emphasizing the influence ofdomestic actors on the state and the other nnderlining the influence of global forces, have two features in common. First, they both argue that the economic policies of a country are shaped through the interaction ofthe state and business, and second, both assume that this interaction is seen to occur between two separate, monolithic-entities. This second point was widely refuted by scholars such as Timothy Mitchell, who argued that the distinction between the state and society has to be drawn within the network of institutional mechanisms through which a certain social and political order is maintained.'1his approach blurs the business-state distinction and consequently neither the state nor the business is seen as a distinct entity. Whereas the former is regarded as "a complex network of heterogeneous and overlapping concerns'< the problem with the latter is that "businessmen seldom, if ever, speak with a single voice." Business as an entity interacting with the state is by no means a homogeneous one since it brings together different interests, different goals and different attitudes. One of the most crucial components of the interaction between the state and business is the role of business associations that translate common interests into collective action. As Stephan Haggard and his colleagues have stated, business associations can "maximize the positive effects ofgovernment-business collaboration by limiting the pursuit ofparticularistic benefits" and "promote collective self-governance ofbusiness, or private interest governance, that can be equally if not more efficient and effective than direct state interventjonve Over the past two decades, the way that business associations were viewed by scholars has been influenced by the changes brought about by globalization. The traditional view, which implied that business associations were transmitting information and expressing opinions in order to influence the decisions of policy makers, changed dramatically in the face of the rapid economic and political transformation that the world has been going through. Business associations, which have hitherto been studied within the larger context of interest or pressure groups, have come to be taken as separate entities with particular characteristics and, more importantly, the emphasis has shifted to functions other than transmitting information and expressing opinion.

,

J

Stephen Bell offers a typology of roles assumed by business associations: (1) Limited quasi-public roles or state service functions: collecting information and passing it on to policy makers, expressing the opinion ofthe business community, sitting on state advisory bodies, explaining public policy decisions to members, and trialing proposed new legislation; (2) Policy formulation: the association is entitled to a public status and in collaboration with public officials and politicians, it plays a formal role in the shaping of public policy; and (3) Policy implementa-

no

I

tion: a formal quasi-public role In impleBusiness community emerged menting public policy.' The roles that are as an actor in Turkey's assumed by business associations form foreign policy at a time when different patterns ofinteraction, i.e, poligreater economic liberalism cy networks, between the state and business. According to Michael Atkinson and coexisted with strong political William Coleman, the mobilization level authoritarianism ofbusiness interests on the one hand and state capacity (measured as the concentration of authority and bureaucratic authority) on the other, are the two factors conditioning the policy networks and depending on the degrees of both the state relinquishes part of its authority to business actors."

In a similar vein, Ay~e Bugra dedicated a special chapter to business associations in her seminal work State and Business in Modern Turkey and pointed out that the nature of interest representation also takes place under certain domestic constraints, and when state officials and business leaders are aware of these constraints, they tend to act in cooperation and eventually business associations acquire a quasi-public role extending beyond the simple pursuit of material gain. "When this happens, business associations are both servants ofthe state and advocates of business interests. An important observation made by Bugra is that when business leaders feel that they do not have a sufficient say in policy matters, they, do not ask for a more limited state, rather they volunteer to take part in the policy process." This theoretical framework on state-business relations will help us formulate questions to ask in order to understand the role ofbusiness associations in formulating Turkey's foreign economic policy. The main question this article deals with is to what extent Turkish business associations are able to take part in the foreign economic policy-making process, which in turn leads to two sub questions: (1) Through what kind of mechanisms is a structured pattern of interaction established between the state and the business associations, and in this regard, to what extent do Turkish business associations fit into Bell's typology? And (2) following Atkinson and Coleman, do these mechanisms require the state to transfer a part of its authority and/or administrative functions to the private sector? Foreign Policy and Business Associations in Turkey The institutionalized participation of the business community in Turkey's foreign policy can actually be traced back to 1965 when the Economic Development Foundation (1ktisadi Kalkinma Vakf' - jKV) was founded as a joint initiative ofthe

1111

Businessmen as Diplomats: The Role of Business Associations in Thrkey's Foreign Economic Policy

Istanbul Chamber of Commerce (lstanbul Ticaret Odasi - iTO) and the Istanbul Chamber of Industry Ustanbul Sanayi Odasi - iSO). However, the purpose of this organization was limited to Turkey's relations with the European Economic Community (the predecessor to the European Union) following the Ankara Agreement of1963. It was with the liberalization wave ofthe post-1980 period when the business community increased its role in Turkish foreign policy. It is important to note that the business community emerged as an actor in Turkey's foreign policy at a time when greater economic liberalism coexisted with strong political authoritarianism. On the one hand, the 1982 Constitution imposed severe restrictions upon interest group associations, both voluntary and public professional organizations." On the other hand, the same period also witnessed a remarkable move towards economic liberalism and integration with the world economy, motivated by the pro-business attitude of the ruling Motherland Party (Anavatan Partisi - ANAP) and Prime Minister Turgut Ozal, who enjoyed the support and loyalty of the business community. In his pursuit of integrating Turkey's economy with the world, Ozal preferred the business community as his partner than the bureaucracy. According to Sedat Laciner, Ozal, who himself was from the business world, thought that the bureaucracy was "conservative, far from being creative and slowing down the business" and the foreign policy bureaucracy was especially so. This was why he was frequently bypassing the bureaucracy by making use of the lacunae in the state apparatus."

Through changes in legislation, incentives provided for exporters, and Ozals personal initiatives, such as taking businessmen with him to official visits abroad, Turkey began to experience a remarkable increase in its participation in global economic flows, with a substantial role played by the private sector. It is important to note, however, that in this process, Ozal was "instructing" the businesses and their interest groups rather than "exchanging views" with them.'> As Ergun Kalaycioglu remarks, "the role of commercial interest groups in the economic policy-making process ofthe government was either minimal or non-existantyu During the early 1980s, despite being organized around both public professional associations such as the Turkish Union of Chambers and Commodity Exchanges (Turkiye Odalar ve Borsalar Birligi - TOBB) and voluntary associations such as the big-business representative, the Turkish Industry and Business Association (Turk Sanayicileri ve Isadamlari Dernegi - TOSLAD), Turkey's business community possessed no institutionalized channels through which they could communicate their interests with respect to the foreign economic policies to the state. TOBB and TUSiAD did not have such a function then, and it was Turgut

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Ozal himself who saw this shortcoming in the institutional framework. In those years, foreign economic policy making was under the joint responsibility of three public institutions: the Ministry of Foreigu Affairs, the State Planning Organization, and the Undersecretariat of Treasury and Poreign Trade.'These institutions were responsible for negotiating with the relevant institutions of other countries and formulating policies; however, they could not impose policies on the private sector and could only make recommendations, which the private sector had the freedom to follow or to ignore. Since the private sector is by definition motivated by profit maximization rather than the state's concerns, this was a problem for there was usually a mismatch between the two. There was the market, but there also existed a lack of state involvement in Turkey in the Keynesian sense, an involvement seen in other countries with, for example, the US Department of Commerce in the United States, or related agencies in East Asian countries, such as the Japanese Ministry of International Trade and Industry (MITI). This was the reason why Turgut Ozal embarked upon establishing a novel institutional framework, through which the state would maintain its central position but at the same time allow the business community to playa role in Turkey's foreign economic policies. 14 DEiK: The Foreign Economic Relations Board of Turkey The first step towards the model that Ozal had in mind was taken in a bilateral context when the Turkish-American Business Council was established in 1985, followed by the Turkish-japanese Business Council and the Turkish- French Business Council. However, in time these business councils, which were mainly operating through the personal efforts of the businessmen involved, came to be seen as a waste oftime and resources and a consensus emerged that a larger and deeper institutional setting was needed in order to provide a stronger initiative. Consequently, in November 1986 the decision was taken for the establishment of the Foreign Economic Relations Board of Turkey (Dl~ Ekonomik Iliskiler Kurulu - DElK) as a business association responsible for "compiling information on opportunities of commercial and economic cooperation and presenting it to entrepreneurs; providing coordination at international level for various forms of commercial and economic cooperation; ensuring the appropriate political environment for the realization of the existing potential"!" This new organization was to be an affiliate of TOBB, and it was Ozal himself who decided this way, since he believed that TOBB's semi-official legal status and wide representative basis would enable DEiK to reach entrepreneurs allover the country and, at the same time, to gain recognition at the international level. 16

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Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Economic Policy

As the government used

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DEiK started in 19S6. However, since the Law of the Turkish Union of Chamgreater volumes of trade and bers and Commodity Exchanges (the investment as an instrument TOBB Law), which was then in effect," of its foreign policy, it also did not have the appropriate provisions, needed a partner to operate DEiK's official establishment took place this instrument with, and the with the issuance of the Principles of Esnatural choice was the business tablishment, Duties and Working ofBusiness Councils that was ratified by the community TOBB Board of Directors on February 26,1988. It has to be noted, however, that since there Wasno law, this document provided only de facto legal personality to DEiK. For this reason, DEiK had for years to perform certain official transactions through TOBB. The problem was solved when a new TOBB Law" paved the way for the Regulation on the Working Procedures and Principles of the Foreign Economic RelationsBoard and Business Councils (the DEiK Regulation), which was eventually issued by the Ministry of Industry and Commerce and entered into effect upon its publication in the Official Gazette on November 27,2005. 19 Accordingly, DEiK was defined as a legal personality subject to private law established for the purpose of "pursuing the foreign economic relations of the private sector and assisting the concrete business development activities ofthe business community." In short, it was the state that established DEiK in partnership with the business commnnity and charged it with coordinating the business community's foreign economic relations. New Actors Entering the Scene During the 1990s, DEiK retained its monopoly as the sole private sector organization actively playing a role in Turkey's foreign economic policies, and this role was shaped by both international and domestic factors then influencing the Turkish economy. At the international level, the early 1990s were marked by the dissolution of the Soviet Union and the beginnings of an unprecedented growth in cross-border movement ofgoods, services and capital. Turkey's leaders, such as Turgut Ozal and Siileyman Demirel, were aware of the untapped potential in new markets like the newly independent states in Central Asia and the Caucasus, and in order for Turkey to benefit from this potential, they needed the collaboration of the business community. In other words, the international environment provided the conditions for DEIK to increase its role. However, at the same time, domestic factors proved to have an opposite effect. During the 1990s the Turkish political scene was marked by serious instability with a series of coalition governments

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j The new business class produced its own business associations, which were established with the purpose of exploring new market opportunities and creating business partnership networks for their own clientele.

taking office as the country struggled to cope with both armed violence and eco- . nomic turmoiL Although all coalitions govermuents formed between 1991 and 1999 shared to a large extent the same pro-business stance, instability in both the political and economic sense limited the business community's access to the foreign economic policy-making process. As a result, after the initial boom in the number and scope of activities undertaken by DEiK there has been a relative decline since 1993-94. Party ideologies have also played a role in the government's attitude to partnering with the business community in matters related to foreign economic policy. After a series of coalitions led by centre-right parties, another coalition government, this time formed by Biilent Ecevits centre-left Democratic Left Party (Demokratik Sol Parti - DSP), took office in 1999. In this period, DEiK was kept relatively at a distance by the government and was often denied access to the state actors.-? It is natural to expect a left-leaning government to keep the business community at an arms length, but it should also be kept in mind that Ecevit's coldness towards businessmen had its origins in the past Back in 1979, he faced severe attacks from the business community, which considered him as an obstacle to the transition to

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a free market economy. Ecevit responded to the businessmen's campaign against him by claiming that it was the large capital holders themselves who were to be held accountable for the economic slump that Turkey was in." In other words, there was already a certain level of bad blood between Ecevit and the businessmen. In 2002, the political setting changed dramatically in Turkey. After elections

brought the center-right Justice and Development Party (Adalet ve Kalkmma Partisi - AKP) into government, two important developments affected the way business associations. functioned as foreign policy actors. The first development was the new foreign policy paradigm adopted by the AKP government, which invalved «constructive engagement in its neighborhood and beyond"22 and relied on the improvement of bilateral economic and commercial relations as a tool of en-

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gagement. As the government used greater volumes of trade and investment as an instrument ofits foreign policy, it also needed a partner to operate this instrument with, and the natural choice was the business community as it had been back in

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the 1980s and the early 1990s. In contrast with their immediate predecessors, both President Abdullah Giil and Prime Minister Recep Tayyip Erdogan adopted the Ozalian model of active state-business partnership in foreign economic relations.

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For instance, President Giil alone has carried out 70 visits during his first three

years in office, and according to the data released by the office of the President's Chief Economy Advisor, these visits were attended by a total of 2,670 businessmen and created a business volume of around 20 billion dollars.> The second development was the emergence of a "conservative bourgeoisie" as a result of the simultaneous rise of political Islam and the evolution of new industrial centers in Anatolia. The new business class produced its own business associations, which were established with the purpose of exploring new market opportunities and creating business partnership networks for their own clientele. One such association was the Turkish Confederation of Businessmen and Indus-

trialists (Tiirkiye Isadamlarr ve Sanayiciler Konfederasyonu _ TUSKON) founded in 2005. In contrast with DEiK, TUSKON Is a purely private-sector initiative, and whereas its field of activities is not limited to foreign economic relations, this organization has a special emphasis on external trade and investment. TUSKON defines its purpose as "making the Turkish economy and businessmen an effective

part ofglobal economy by considering the local conditions and sensitivities while serving to these aims"> Despite similarities in their goals and activities, DEiK and TUSKON have two major differences. First, in contrast with DEiK, which was founded as an

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Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Econornjc Policy

initiative of the Turkish government to collaborate with the business community

in this area, TUSKON is a purely private-sector initiative. Second, there are also structural differences between the two organizations. DEiK operates through bilateral business councils established with counterpart organizations in respective countries, which are usually a representative body of the corresponding country's private sector. On the Turkish side, business councils are joined by member companies that are either doing business in the respective country or planning to do

so. As of September 2010, there were 84 business councils subscribed to by 700 companies, and since a company can join more than one business council, there

were 1,400 company representatives taking part in the activities of DEiK's business councils." The sectoral distribution ofDEiK's members shows that they are mostly from the foreign trade sector (35% of all members), followed by construction (22%); tourism, logistics and health (12%); foreign investment (9%); banking and finance (8%); and agriculture and food (4%)." A large majority of DEiK's member companies can be classified as small- and medium-sized enterprises

(SMEs). TUSKON, on the other hand, is the nmbrella organization of seven regional federations (corresponding to Turkey's seven geographical regions), which in turn cover a total of 151 voluntary businessmen associations and around 15,000 entrepreneurs. TUSKON's members are the regional federations, not the associations or individual companies." In this pyramid structure, any individual company or entrepreneur who joins a local business association, which is in turn linked to one of the seven regional federations, is regarded as a member of TUSKON." Information on the sectoral distribution of companies associated with TUSKON is not available; however, it is safe to state that these companies are mostly SMEs from the manufacturing, construction, transportation and financial industries.

The Mechanisms of Foreign Policy Participation Through what kind ofmechanisms is a structured pattern of interaction established between the state and the business associations? Stephen Bell's classification of policy participation roles of business associations will be useful for answer-

ing this question. As discussed earlier in this article, Bell's first item was "limited quasi-public roles or state service functions", wherein business associations collect

information and pass it on to the policy makers, express the opinion of the business community, serve on state advisory bodies, explain the public policy deci-

sions to members, and trial proposed new legislation. Both DEiK and TUSKON perform these duties, through two different mechanisms: (1) Large scale international business events; and (2) participation in state leaders' official visits to other countries.

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Large-scale international business events should be considered an instrument offoreign policy participation, on the grounds that they bring together the executives of business associations, as well as representatives from member companies, together with policy makers, both from Turkey and abroad. Every year, DEiK organizes several business events, both in Turkey and abroad. Among these events, the "Joint Annnal Meeting" is the flagship event of each business council that operates under DEiK. These meetings are organized in collaboration with DEiK's counterpart organization. Although it is stated that joint annual meetings are held at least once every year, this is not the case in practice because only a certain portion of DEiK's business councils hold their joint annual meetings during the year. For instance, in 2009, when DEiK had 84 business councils, and held a total of 505 events, only 18 joint annual meetings were organized." Another event that resembles the joint annual meetings in terms of scale is the "Business Forum", which is organized not with the counterpart organization in the respective country but with other Turkish stakeholders. On the other hand, TUSKON's principal event is the "Foreign Trade Bridge" summit held in Istanbul. Since 2006, TUSKON has organized trade summits with Eurasian, Asia-Pacific and African countries, where each summit covers a whole continent rather than one particular country. It has to be noted that both DEiK's and TUSKON's events are supported by the official foreign economic policy makers of Turkey, the Ministry of Foreign Affairs and the Undersecretariat of Foreign Trade, in the sense that these government institutions recognize the business associations as a partner and have their senior bureaucrats participate at these events. Not only is it a common practice for the Turkish government to be represented, mostly at the ministerial level, but it is also often the case that intergovernmental agreements related to economic issues are signed during these events. For instance, during 2009, 23 intergovernmental agreements concluded by Turkey were signed during DEiK's events." TUSKON's events have recently begun to serve in this way as well,"

This high-level participation gives DEiK and TUSKON the opportnnity to report problems experienced by the Turkish business community and their policy suggestions directly to the statesmen and bureaucrats ofTurkey and the respective foreign country and enables business communities of both sides to have direct contact with these statesmen. Additionally, through these events business associations also provide the opportunity for the state officials and bureaucrats of both sides to exchange opinions and ideas with each other within a semi-formal and business-oriented setting.

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Businessmen as Diplomats: 'Ihe Role of Business Associations in Turkey's Foreign Economic Policy

The practice of groups of businessmen accompanying Turkish state leaders on official state visits began during the ANAP government when in 1984 then Prime Minister Turgut Ozal traveled to the Turkish Republic of Northern Cyprus in the company of a business delegation. Since then, DEiK has been the main institution organizing the participation of business delegations on official state visits abroad, whereas TUSKON is relatively a newcomer in this field. In 2009, DEiK organized business participation in 21 such visits, including 10 presidential visits, three visits of the prime minister, and eight visits of other ministers." The numbers have significantly risen during the AKP government and recent figures can be compared to just one visit in 2001 and two visits in 2002 (until the formation of the new government on November 18). These two years coincided with a coalition government led by the DSP and the term of Ahmet Necdet Sezer as president, who was rather unsympathetic towards the participation of businessmen in official matters of the state." Business participation in state leaders' visits to other countries is an efficient instrument in foreign economic policy participation, not only because events such as the joint annual business council meetings and business forums are organized within the framework of these visits, but also because they provide for a greater acquaintance with the economy of the particular country and the chance to create more contacts with the representatives of that country's government and business community. Mehmet Erdal Eren, the chairman ofthe Turkish Constructors Association, argues that traveling with the president is "not absolutely necessary, yet extremely useful" because it provides the opportunity for businessmen to communicate directly with the state." On the negative side, there is often a problem from the state's perspective with business participation in official visits, which is related to the businessmen's occasional divergence from the common goals, and their tendency to use these visits for other purposes. Ambassador Rafet Akgunay, a career diplomat who served among other posts as the senior diplomatic adviser to the prime minister, refers to Erdogans visit to China in 2003, during which a tourism seminar was organized for Turkish and Chinese companies but "nobody discussed tourism' and most of the business representatives used the opportunity to communicate their personal problems to Erdogan. Akgiinayargues that DErK's involvement is crucial for improving the efficiency of such visits, because it is DEiK that knows both the state and the business community and thus is in a position to "bring only those who are really interested in doing business with that country."" In other words, DEiK provides the knowledge, which is required by the state in order to increase the efficiency of the visits.

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While the business community is significantly mobilized, there exists a high concentration of bureaucratic authority as well

Having businessmen in delegations on official state visits carries risks as well since the businessmen's activities during the visit, motivated by the pursuit ofselfinterest, can cause problems vis-a-vis the relations between the Turkish state and the respective country. Ambassador Ender Arat, a career diplomat who also served as the senior diplomatic adviser to the prime minister, argues that there are indeed risks, but these are clearly outweighed by benefits."

It has to be noted that business associations also make use of direct contacts with state leaders to express the opinions of the business community. Senior executives of both DEtK and TUSKON frequently visit high-level state officials in Ankara, and the Turkish state is almost always presented at the general council meetings of these organizations, mostly at the level of the president or the prime minister."

The second item in Stephen Bell's typology is "policy formulation" wherein the business association is given public status and plays a formal role in shaping policy. Due to its legal status, this area is monopolized by DEtK and the main mechanism is the Joint Economic Commission (JEC) meetings, which are held on a bilateral inter-governmental basis with foreign countries. These meetings offer a platform for the two countries to negotiate a road map for the future of their economic relations and formulate their policies. As specified in the related circulars of the prime ministry, DElK is always represented at JEC meetings, which is evidence of the public status given to DEtK." DEtK has a policy formulation role at the multilateral level as well. DEtK has relations with several organizations, but these are mainly based on information sharing and cannot be evaluated as a mechanism ofpolicy implementation. However, its links with the Black Sea Economic Cooperation Organization (BSEC) should be dealt with separately. BSEC was founded in June 1992 for the purpose of "achieving the integration of the Black Sea region into the world economy within the principles of market economy and democracy"> This required the mobilization of business communities since nine of the II member countries of the BSEC were post-communtst transition economies. The Turkish Ministry of Foreign Affairs contacted DEtK one month after the foundation of BSEC to inquire about possible collaboration, and eventually the BSEC Business Council was founded under the auspices of DEiK with the purpose of improving the business environment in the BSEC region and promoting individual and collective initiatives ofthe 120

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Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Economic Polley

private sector in the member countries." It was founded as a non-governmental, non-profit organization (such as DEtK itself), but at the same time it was provided with observer status at BSEC with the right to attend all its official meetings. Currently, the BSEC Business Council is no longer operating under the auspices of DEtK and instead DEtK represents Turkey on the board of directors of the BSEC Business Council. In sum, business associations take part in the foreign policy-making process by creating platforms of interaction with the state, such as large-scale business events, participation in state leaders' official visits and direct contacts with policy makers, as well as by directly contributing to the formulation of policy by representing the business community in intergovernmental meetings and negotiations. However, Bell's third item, "policy implementation': remains the weakest link in Turkish business associations' participation in foreign economic policy. Whereas they actively take part in the process of formulating policy, implementation is undertaken by the relevant public institutions. The quasi-public status entitled to business associations does not cover the realm of implementation, and it is the state which puts the policy into effect and enforces the policy.

Does the State Transfer its Administrative Fnnctions? The question that remains to be answered is whether the state transfers some , ofits administrative functions to these business organizations, and this question is especially relevant for DEiK, given its special legal status. As discussed earlier in the theoretical part of this article, the extent to which the state relinquishes part of its authority to the business community depends on both the level of mobilization of business interests and state capacity in terms of the concentration of bureaucratic authority. In Turkey, while the business community is significantly mobilized, there exists a high concentration of bureaucratic authority as well. Cigdem Tiiziin, former director ofDEtK, recalls that back in the 1980s, Turgut Ozal had intended to place JEC meetings under the sole responsibility of DEtK but had to give up the idea in the face of a strong negative reaction from the state bureaucracy. Instead, it was decided for JEC to be organized by the state and DEiK was to be given a seat." What Ozal wanted was to transfer part of the state's administrative functions to DEiK, but the bureaucracy resisted, and no transfer took place. As seen in this example, the bureaucracy recognizes the capacity of the business community; yet it is also determined to maintain control. As a result, instead oftransferring its functions, the state subcontracts them to business associa1121

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tions in the expectation that they would perform these duties in a more efficient manner and the state determines the conditions of the contract itself. Under this corporatist setting, the state chooses the associations to work with, and to what extent they get involved depends on to what extent the state needs them to do so. For example, the DEiK Regulation states that the organization is "to represent the private sector in international or intergovernmental negotiations if and when it is invited to do SO:'41 This "if" conjunction clearly illustrates the limits imposed on DEiKs involvement. In the case of TUSKON, although its participation in official intergovernmental negotiations is out of question, the same argument holds as well. Which business associations the state chooses to collaborate with depends on the degree of the willingness these associations have to play by the rules set by the state. DEiK is an institution specially established for coordinating foreign economic relations, but this does not necessarily mean that the state is obliged to entitle DEiK to a privileged position. Instead there has been a bargaining, which has been carried out under the terms dictated by the state. Accordingly, the state gave DEiK the task of representing business interests in terms of foreign economic policies because it was not in a position to be in direct contact with the companies itself as that would have been too costly. In return DEiK gained the privilege of taking part in the policy-making process, under the condition that it did not challenge the policies of the state, remained within the framework of the policies set by the state, and did not get involved in actions that would contradict state policies. As suggested by the empirical evidence, this bargaining worked (and is working) very well for both sides, and both sides have joined forces around the common goal of improving Turkey'sforeign economic relations.

The bargaining between the state and DEiK is apparent in several incidents. In cases where the business community's opinion contradicts with the policies of the state, DEiK reports this opinion, makes suggestions to the state, and lets the state know what the business community thinks; however, it also refrains from exerting pressure and does not risk violating the rules of the game. One concrete example in this context was the proposed free trade agreement with the United States advocated by DEiK in 2000-01. Turkey's Customs Union agreement with the EU makes it impossible for Turkey to enter into such agreements with countries that do not already have the same agreement with the ED. DEiK argued that an agreement could still be concluded with the United States, with a slightly different content and format; however, the Ministry of Foreign Affairs was clearly against towards DEiKs proposal and the idea was shelved." DEiK did not insist.

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Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Economic Policy

There are also cases when, upon the Whereas business associations request of the state, DEiK stretched its have a role in Turkey's foreign own rules. One example is the establishpolicy-making process, ment of the Turkish-Pakistani Business their role is to a large extent Council in 1987. Although the prerequisites for the establishment of a business instrumental council were not in place, the council was established after a direct request from President Kenan Evren following the official visit to Turkey by the then president of Pakistan, Muhammad Zia-ul-Haq."

With regard to political issues, two important remarks should be made. First, DEIK strictly refrains from getting involved in domestic issues, unlike other business associations such as TDSIAD. Second, with regard to Turkey's foreign policies in the political realm, DEIK actively supports the government's line. One good example is the position of the Turkish-American Business Council at times when claims about the Armenian genocide are discussed by the US Congress. The Turkish-American Business Council actively and effectively contacts senators and congressmen in order to explain Turkey'sposition with regard to the Armenian issue. In some cases, the council has taken even more assertive steps to that end. For instance, in October 2007, the council cancelled the Turkey in 2008 and Beyond conference to be held in New York at the last minute as a reaction against the decision ofthe US House ofRepresentatives' Foreign Relations Committee to recognize the Armenian genocide allegations." This involvement in political issues is not only accepted but also welcomed by the state. Ambassador Rafet Akgiinay states that in certain problematic issues, such as the Armenian issue, the Ministry of Foreign Affairs calls for the support of the business community since "the businessmen's involvement can change the outcome'< There are also several other cases when DEIK supported the governments policies. For instance, on February 26, i999, the Turkish-Greek Business Council decided to indefinitely suspend its operations in protest of Greece's support for the Kurdish separatist organization the PKK. Following the meeting between the foreign minister oftwo countries in New York on June 30, 1999, and the Greek contribution to earthquake relief efforts in Turkey, the business council was reactivated. In both cases, DEiK provided a chaunei of informal diplomacy, which reinforced the efforts on the formai diplomacy side. Wby TUSKON was empowered to take part in the foreign economic policy making process when there was already an organization specifically established for the purpose, i.e. DEiK, is a story that can be explained from both pragmatic and political perspectives. Ruling out the indispensability of any single business association, Ambassador Ender Arat says that "DEIK does its job perfectly, but if

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it fails to do so, someone else can do it in its stead":" Arat'swords clearly indicate the ministry's pragmatic approach, and it can be argued that from the state'sperspective, having TUSKON involved can allow for the diversification of partners and avoid overdependence on one single organization.

On the political side, however, there is a different story. In contrast with DEIK, TUSKON does get involved in domestic politics, albeit only through expressions of opinion, which always support rather than challenge the government's positton." While it might appear that by stepping into the political field TUSKON has moved outside the bargain with the state, the organization's pro-government stance can be thought ofas a reason why it gained the privileged status. In a recent study, Ayse Bugra and Osman Savaskan argue that TUSKON owes its close relations with the government to its large local support base, and none of the other business organizations that have emerged with the rise of the new conservative bourgeoisie in Turkey has closer relations with the AKP govemment.v' Thanks to its pyramid shaped organizational structure, TUSKON has a large membership base mainly consisting of SMEs from the conservative camp, i.e. members of the newly emerging conservative bourgeoisie, which is at the same time the main component of the government's electoral support base at the grassroots level. Despite the absence of organic links between the AKP and TUSKON, this situation appears to have created a mutually beneficial relationship between AKP partisanship and TUSKON membership. Concluding Remarks In the current era of greater economic interdependence, the business community has an increasingly important place in economic relations between nations and it is no longer possible for governments in liberal economies to formulate their foreign economic policies without the feedback and active participation of the business community. However, since the state cannot be expected to have the resources to maintain direct contact with businessmen, it cooperates with business associations, which voice the interests of business and provide a platform for business-state interaction in an effective manner, for the purpose of attaining the common good.

This article has evaluated business associations' role in foreign economic policy within the corporatist context ofTurkey, where there are several business associations and the state is an arbiter of group influence deciding which groups get favors and which groups are excluded. DEIK has been given a privileged position by the state in the foreign policy-making process. This privileged position is the qua-

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Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Economic Policy

si-public governmental status acquired Business associations such by DEiK, which, despite being a private as DEiK and TUSKON are sector organization, can have direct acimportant actors in Turkey's cess to state leaders, allowed to have a foreign economic policy, and say in policy issues, and to participate in intergovernmental meetings. Recently they are likely to maintain this TUSKON has begun to receive some of position as long as they remain the same privilege, which, according to loyal partners to state actors some observers, has led to competition between DEIK and TUSKON. For instance, columnist Serpil Yilmaz, who has been closely following the activities of business associations in Turkey, argues that for several years DEIK had been in charge of coordinating bilateral foreigu economic relations and guiding the government in this respect; yet in recent years its ability to represent the business community has been questioned as TUSKON, despite its relatively smaller business volume, has defined its policy and action plan independently from DEIK and has begun to assume a role in international economic relations." According to Metin Heper, each pattern of business-state interaction has a "particular logic behind it, which closely fits one type ofstate, or government, and not others'':" Turkey has a strong and dominant state, which has led to a particular form of business-state relationship, where the state maintains its central position, exercises its authority, determines the rules of cooperation, and effectively uses the business associations as an instrument to advance the nations interests. Remarks made by the then Prime Minister Tansu Ciller at a meeting with business representatives in 1994 clearly illustrates this approach: "Get ready. We are transferring the power to the public sector. We will determine the rules of the game as much as we can":" In the meantime, Heper's argument also helps to explain why different governments have had different attitudes toward cooperating with the business community. In sum, whereas business associations have a role in Turkey's foreign policymaking process, their role is to a large extent instrumental. Business associations do not have an autonomous role in shaping Turkey's foreign economic policies since they remain within the policy framework set by the state and refrain from challenging the policy objectives of state actors. This, however, does not necessarily mean that their role is frivolous. By establishing a platform of interaction between the state and the business community, business associations communicate the private sector's demands, needs and positions in different issue areas to the state as a vital input for the formulation of policy. On the other hand, business1125

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state interaction is also instrumental in facilitating the policies that are already in effect. Business associations' mobilization behind the policies formulated by the state serves to provide greater legitimacy for the policies in question and help to turn policies into concrete results in the form of higher trade and investment figures. Business associations such as DEiK and TUSKON are important actors in Turkey's foreign economic policy, and they are likely to maintain this position as long as they remain loyal partners to state actors.

Endnotes 1. The term "businessmen" as used in this article refers to the members of the business community in general, regardless of gender. 2. Manuel Castells, "The Informational Economy and the New International Division of Labor," Manuel Castells, Martin Carnoyand Stephen S. Cohen (eds.), The New Global Economy in the Information Age (University Park. PA: Penn State University Press, 1993), p. 20. 3. Timothy Mitchell, "The Limits of the State: Beyond Statist Approaches and Their Critics;' American Political Science Review, Vol. 85, No.1 (March, 1991), p. 78. 4. Evaleila Pesaran, "Business-State Contestations and Shifting Economic Policies: The Case of Iran;' 57th Political Studies Association Annual Conference, University of Bath, Aprilll~13, 2007. 5. Arthur M. Johnson, Government-Business Relations (Columbus, Ohio: Charles E. Merrill Books Inc., 1965), p. 14. 6. Stephan Haggard, Sylvia Maxfield and Ben R. Schneider, "Theories of Business and BusinessState Relations;' Sylvia Maxfield and Ben R. Schneider (eds.), Business and State in the Developing Countries (New York: Cornell University Press, 1997), p. 49. 7. Stephen Bell, "Between the Market and the State: The Role of Australian Business Associations in Public Policy;' Comparative Politics, Vol. 28, No.1 (October, 1995), p. 27. 8. Michael M. Atldnson and William D. Coleman, "Strong States and Weak States: Sectoral Policy Networks in Advanced Capitalist Economies," British Journal of Political Science, Vol. 19, No.1 (January; 1989). pp. 50-59. 9. Ay§e Bugra, State and Business in Modern Turkey: A Comparative Study (Albany: State University of New York Press, 1994), pp. 9-11 and 229. 10. According to Article 135 of the Constitution, public professional organizations were not allowed to engage in political activities of any kind; they had to remain within their legally prescribed areas of activity and they were subject to the administrative and financial supervision of the state. Moreover, as Ergun Ozbudun argued, nine ordinances issued by the National Security Council on August 5, 1983 specified and greatly increased the tutelary powers of the relevant ministries over professional organizations, thus further restricting their autonomy. Ergun Ozbudun, "The Post-1980 Legal Framework for Interest Group Associations," Metin Heper (ed.), Strong State and Economic Interest Groups: The Post-1980 Turkish Experience (Berlin, New York De Gruyter, 1991), p. 49. 11. Sedat Laciner, "Ozal Donemi Turk Dis Pclitikasi, Turgut Goksu, Hasan Hiiseyin Celfk, Abdillkadir Baharcicek and All Sen (eds.), 1980-2003 Ticrkiyenin Dis. Ekonomik, Sosyal ve Idari Politikalan (Ankara: Siyasal Kitabevi, 2003), pp. 25~48. 12. Interview with Ctgdem Tliziin, former Director ofDEiK, May 24, 2008. 13. Ersin Kalaycioglu, "Commercial Groups: Love-Hate Relationship with the State," in Heper (ed.), Strong State and Economic Interest Groups: ThePost~1980 Turkish Experience, p. 83. 126

Businessmen as Diplomats: The Role of Business Associations in Turkey's Foreign Economic Policy

14. For a discussion of the developments that led to the establishment of DElK, see Mehmet Altun, Dl~ Dunyanm Anahtan DEiK (Istanbul: Kurumsal Yaymlar, 2009), pp. 80-83. 15. "Dl§ Ekonomik Iliskiler Kurulu," introductory brochure, 1988. 16. Altun, Dl? Diinyanm Anahtart DElK, p. 115. 17. Law No.5590, issued on March 8,1950. 18. Law No.5174, issued on May 18, 2004. 19. This regulation was later revised through a new text, which entered into effect upon its publication in the Official Gazette on June 23, 2008. 20. A good example is from Ecevits visit to the United States in January 2002. In the aftermath of the financial crisis of 2001, when Turkey relied on increasing exports for recovery, DEIK contacted the Prime Minister's Office suggesting a business delegation to accompany Ecevit in this visit. The answer received was a plain refusal. Funda Ozkan, "1l,' Dunyasr Ecevit'ten Davet Bekliyor," Radikal, December 20, 2001. 21. "Ecevit: Bazr Isadamlannm Muhtrrasi ile Hiikiimet Oldurttlemez," MiIliyet, May 16, 1979. 22. Ahmet Davutoglu, "Turkish Foreign Policy and the EU in 20ID;' Turkish Policy Quarterly, Vol. 8, No.3 (Fall, 2009), p. 13. 23. Vahap Munyar, "Gul, 70 DIl,'Seyahate Cikn, 194 Giinliik Tur 20 Milyar Dolarhk Il,'i 'Ietikledi," Hiuriyet, August 27, 2010. 24. TUSKON web site, retrieved September 26, 2010, from http://www.tuskon.org/ hakktmtzda/Iidehistory 25. DEIK web site, retrieved September 26, 2010, from http://www.deik.org.tr:80/pages/TRI DEIK_DeikHalckinda.aspx?IKID=lO. 26. "2010 YllI Sunumu," DEiKweb site, retrieved December 9, 20ID, from http://www.deik.org. tr:80/Pages/TRlDEIKJaydaliBilgilerDetay.aspx?fbDetId=40&IKID=10 27. TUSKON web hakkimizdal?id=tuskon.

site, retrieved September 26, 2010, from http://www.tuskon.orgl

28. Information received from DEIK secretariat. 29. "2010 YIh Sunumu" DEIK web site. 30. For instance, seven intergovernmental agreements between Turkey and Indonesia were signed during the 'Iurklsh-Indonesian Trade and Investment Forum organized by TUSKON on June 30, 2010, with the participation of the Presidents from the two countries. "Endonezya ile Yedi Il,'birligi Anlasmaer lmzalandi, lhlas Haber Ajansl, June 30, 2010. 31. Information received from DEll< secretariat. 32. Some businessmen even regarded to Sezer's term as the 'lostyears: "Sezer'in 7 yih Kazakistanda Elestiri Konusu," Aksom, December 16, 2007. 33. "Cumhurbaskaru Sezere 16 Acidan Balas" Milliyet, August 27, 2007. 34. Telephone interview with Ambassador Rafet Akgiinay,May 28, 2008. 35. Written interview with Ambassador Ender Arat, May 29, 2008. 36. Prime Minister Recep Tayyip Brdogan attended the most recent general council meetings of both DEIK (held on December 27, 2009) and TUSKON (held on March 6, 2010). 37. Circular of the Prime Ministry General Directorate of Personnel and Principles, September 25, 1996. This circular states that the chairman of the respective business council of DEIK is to attend the JEe meetings.

1127

•• I! 11

Ii

ALTAYATLI

u

U 38. "The Black Sea Region;' DEiK Bulletin, 1993. 39. Altun, Dtj Dunyanm Anahtari DElK, p. 328. 40. Interview with Ctgdem Tiiziin, former Director of DEll<, May 24, 2008. 41. Article 6c ofthe Regulation On the WorkingProcedures and Principlesofthe Foreign Economic RelationsBoard and Business Councils published in the Official Gazette on June 23, 2008. 42. "1~ Dunyasr, ABD ile Serbest Ticaret Anlasmasr Yapmak icin Bastmyor," Diinya; October 24,2001. 43. Altun, Dl$ Dunyanm Anahtan cets: pp. 162-164. 44. "Scykmma ilk Tepld 1~ Diinyasmdan:' Sabah, October 14, 2007. 45. Telephone interview with Ambassador Rafet Akgiinay, May 28, 2008.

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

46. Written interview with Ambassador Ender Arat, May 29, 2008. 47. A good example is the openly pro-government stance adopted by TUSKON before the referendum on constitutional changes held on September 12, 2010. In contrast with TUSKON, both DEll< and its parent organization TOBB refrained from expressing their opinion on the proposed changes in the constitution. "Bitaraf Olmayanlar Tesekkur Alamadr," Referans, September 14, 2010. 48. Ay~e Bugra and Osman Sevaskan, "Yerel Sanayi ve Bugiiniin Tlirkiyesinde 1§ Dunyasi," Toplum ve Biiim, No. 118 (2010), pp. 92-123. 49. Serpil Yilmaz, "Amerika, TtirIdye ile Bkonomfk llieldlerfnde Kurumsalhgt Belirginlestirryor," Milliyet, October 21, 2010. 50. Metin Heper; "The State and Interest Groups with Special Reference to Turkey," in Heper (ed.), Strong State and EconomicInterest Groups: The Post-1980 TurkishExperience, p. 6. 51. "Ciller Patronlara Umut Dagitn," Milliyet, December 10, 1994.

MEHMET BABACAN*

T

he traditional advice given to the prince in the Ottoman Empire (late fifteenth century) was:

"Look with favor on the merchants in the land; always care for them; let no one harass them; let no one order them about; for through their trading, the land becomes prosperous and by their wares, cheapness (or inexpensiveness) abounds in the world:" Turkish economyhas been subject to a variety of analyses, based on different perspectives. Depending on the analytical tools employed, however, the scope of and the inferences from the analyses change dramatically. Based on an assessment of Turkey's new foreign policy orientation through its foreign trade performance, this paper is focused on the specific arguments around trade policies and takes on a political economy perspective. The period of 2002-2008 under the AK Party's administration is regarded as a significant landmark in

* Faculty of Commercial Sciences, Istanbul Commerce University, [email protected]

128

I

1129

Whither an Axis Shift: A Perspective from Thrkey's Foreign Trade

Turkey's changing foreign trade structure also fits the new global economic trends that b egan in t h e 1990s

terms of Turkey's foreign policy as well as its trade orientation. A new multi-dimensional approach grounded in a theoretical background re-defining the coun, .. al h try S position as a centr power -rat er than peripheral- power thrust Turkey into a new era. The country has engaged in new bilateral relationships, strongly motivated by economic and commercial demands in the last decade, particularly during the AK Party's term.

Along with many other aspects> Turkey's increasing economic performance manifested itself in the continuous surge in the volume of its export which reached 36 billion US Dollars in 2002, 47.3 billion US Dollars in 2003, 63.2 billion US Dollars in 2004, 73.5 billion US Dollars, and 85.5 billion US Dollars by 2006. During the period of2004-2006, the AK Party government undertook the Exports Strategic Plan, which was a roadmap for Turkey's new export orientation as well as rising targets. The Plan targeted a total export volume of 75 billion US Dollars by the end of 2006, which it exceeded by more than 10 billion. Turkey nd ranked 22 in terms of exports during the period of 2004-2006, compared to its previous position of 25 th in 2002, according to the World Trade Organization statistics." Exports witnessed robust growth rates, with 25.3 percent in 2007 and 23.1 percent in 2008. Therefore, the total volume ofTurkey's exports reached 107.2 billion US Dollars and 132 billion US Dollars in 2007 and 2008, consecutively. The share of industrial sector exports was 115.2 billion US Dollars as of 2008. The main export destination for Turkey in 2008 remained by far the EU-27, as the exports to the EU members reached 63.4 billion US Dollars, with an increase of 4.9 percent and a share of 48 percent out of the total. Due to the global financial crisis that erupted in 2008, however, Turkey's main export markets as well as the world economy as a whole Were negatively affected, so the total export volume decreased by a Significant 22.6 percent. The total export volume dropped down to 102.1 billion US Dollars in 2009, as shown in Figure 1 below. Nevertheless, it was still above the previously targeted 98.5 billion, envisioned by the Mid-term Economic Program (2010-2012). Exports to the EU-27 countries faced a sharp decline of 25.8 percent in 2009, dropping to 47 billion US Dollars. However, two significant developments emerged within the second half of the decade. Turkey's exports to the Middle East -especially to the Gulf Cooperation Council (GCe) _ and African countries witnessed dramatic increases.The share of African economies as a 130

I

destination for Turkey's exports, for instance, witnessed a strong increase of 12.3 percent, reaching 10.2 billion US Dollars in 2009, where trade volume in almost all main export destinations fell drastically.'

...

Figure 1. Turkey's Trade Volume by Years, 1980-2009

..2 ,••.. "i: 12. a

;;;

m w

3« >

•• ••

01--····-

2.

~~~~~~~~~~~~~~~~~

~ ~

~~

~

~

~ ~ ~ ~ ~~ ~

~

~

~

~

YEARS Source: Undersecretariat for Foreign Trade, 2009

This analysis argues that the basic motivation behind Turkey's emergence as a 'rising star' is foremost its economic, rather than political, cultural or religious orientation. '~ major shift in the Turkish economy occurred in the 1980s with the adoption of neo-liberal economic policies. Despite several crises, the Turkish economy has developed to a considerable degree, making it the 16th largest in the' world (in terms of total GDP by 2010). Turkey's vibrant economy and the raising democratic standards (Le. recent constitutional amendments) in the EU negotiation process have increased its soft power in the region and made it particularly attractive for reformers." The argument of Turkey's so-called "axis shift" appears to fit Turkey's changing foreign trade scheme because the number of new export destinations and the Significant rise in Turkey's bilateral trade volume with Latin American, African and Mid-eastern countries as well as China illustrate this new orientation. However, Turkey's changing foreign trade structure also fits the new global economic trends that began in the 1990s. A simple while careful analysis of the world merchandise trade and Turkey's export-import dynamics in the last decade show a considerable overlap. This is particularly true when it comes to the emergence of the East in the early 21 st century as a new economic player and trade partner on the world scene. The exponential growth in Turkey's economic figures needs to be placed in this context and qualified. The globally favorable investments, capital flows, and trade climate for emerging economies alongside Turkey's politically

1m

MEHMET BABACAN

stable domestic environment are arguably major contributing factors to Turkey's robust economic performance. The increasing structural efficiencies and the lowcost margins coupled with product and market differentiation strategies are also some of the components behind the rapid expansion witnessed through bilateral and multilateral trade. Record-high amounts of foreign direct investment (FOls) are considered as other sources of economic growth, which attained 84 billion US Dollars during the period of2002-2009, including mergers & acquisitions as well as privatization revenues." With its strong economic development over the decade, Turkey has become the focus of global interests, including major events such as the IMF-World Bank Annual Meetings in October 2009, globally important energy projects like the Nabucco gas pipeline, and strategically significant issues such as the Iranian nuclear standoff. In addition, Turkey's regional significance is also on the rise as it is heavily involved in mediating Mideast peace efforts, resolving Balkan disputes, and attenuating rivalries in the Caucasus region. Trade, or in more general terms, business has been one of the driving forces of increased Turkish attractiveness in its region, particularly the Middle East. Turkey's prolonged desire for becoming a full EU member and its harmonization efforts with the EU acquis led to extensive political, judicial, and economic reforms in the last decade. From the far east to the west, the baiting
1321

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

'Axis Shift' Debate and the Unbearable Lightness of its Reasoning This study asserts that the ongoing 'axis shift' debate is at the very least groundless, provided Turkey's multi-dimensional and multi-layer foreigu policy setup, implemented effectively during the AK Party's ruling term. The axis shift debate is not neutral and possesses a hidden negative connotation, as it carries with it an accusation that Turkey intends an expansion into new regions, as "those who accuse Tur~ key of changing axis confuse the transformation of global politics with that of values and (ideological) trends. And this is where the question of axis shift is perceived as a threat and there is a ringing of alarm bells. But Turkey is Simply continuing the broad trends and values begun in 1839 during the period of the Tanzimat (Reorganization) reforms," according to moderate observers. Whether Turkey's current policies are a continuation of the Tanzimat reforms or not, Turkey's new orientation both at home and overseas deserves a more profound analysis. The frontiers of limitations ofan axis shift, however, are not well defined and the arguments around it are based on perceptions rather than realities. Therefore, a robust definition for the term should be introduced for each epistemological and actual domain that would legitimize the ongoing debate. Since our analysis takes Turkey's foreign trade as the central perspective, however, the subsequent arguments regarding the debate will be put forward accordingly. It is certain that the 'axis shift' debate is multi-dimensional, as it has political, historical, military and security, strategic, economic, and cultural aspects. The paper's reading of the debate is, however, built upon the question ofwhether there is an axis shift on economic and specifically foreign trade grounds. Therefore, the descriptive economic data provided throughout the paper in the subsequent sections aims at providing an insight to the changing nature of the global economy as well as Turkey's foreign trade orientation and (in the last section) its lack of proper strategies in the long-term. Other aspects of the debate will intentionally be left to the experts. This section will take a quick look at the rise of the Eastern economies at the dawn of the 21" century while analyzing Turkey's position with reference to its trade relations in the last decade.

A Global Axis Shift: The Rise ofthe East Global economic relations have considerably changed in favor of the Eastern countries or in more general terms the emerging market economies over the last couple decades (i.e. the 90s and 2000s). The share of developing countries -or emerging market economies- has consistently increased both in terms of financial-capital inflows as well as trade-commodity flows. A quick look provides the necessary insight on the issue as observed in the course of world merchandise trade, based on the World Trade Organization (WTO) statistics. As Russia and

[133

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

MEHMET RABACAN

China, two giants ofthe world commodity trade, have intensively engaged in the WTO meetings in the last decade with the latter already being a member since 2001, they still constitute a major part in world's trade as well as investments. The so-called BRIC (Brazil-Russia-India and China) countries, the ASEAN+3 countries (Indonesia, Malaysia, Philippines, Thailand, Singapore, Brunei, Vietnam, Laos, Myanmar, Cambodia plus China, Japan, and South Korea), and the developing economies within the G-20 group are the rising stars ofthe global economy in the post-2008 financial crisis period and of the new globai economic system. Despite the comparatively low levels ofcapital and FDI stocks or world trade shares, compared to the EU-27 and North American Free Trade Agreement (NAFTA) economies, the Eastern powers emerged as the representatives of a multi-polar global economy," To provide an understanding of the great potential born by the recent giants of the world economy, Chinas non-financial FDI outflows -not inflows- reached 48 billion US Dollars in 2009 aione, according to the UN's 2010 World Investment Report. Chinas total outbound FDI stock is expected to hit some 500 billion US Dollars as of2013, according to Chinese authorities."

'The rise of the East' is gradually becoming a factual rather than a perceptional phenomenon where Turkey is re-positioning itself accordingly

For a meaningful comparison in the case of Turkey (I.e. the axis shift debate), the above and below figures (Figure 2 and Figure 3) provide a depiction of the

evolving shares of the EU-27 countries (including intra-EU trade) and the Asian economies, including Middle Eastern countries. Accordingly, the total share of the EU-27 block in world merchandise trade is steadily declining over the period of2002-2008, from 41 percent down to 37 percent in exports and from 40 percent down to 38 percent in imports. Meanwhile, the share of Asian exports witnessed an increase from 10 percent up to 12 percent while imports were up from 8 percent to 10 percent.P Therefore, if the term is applicable, it is quite evident that a slow but gradual 'axis shift' towards the East is in place on a global scale. Figure 3. World Merchandise Trade Shares (Imports), 2002-2008 World Merchandise Trade, Imports 0,42 0,41 0,41 0,40 0,40 0,39 0,39 0,38 0,38 0,37 0,37

-

"..". /'

'\,

......

'\,

" '\,

0,12

0,10 0,08 0,06

--EU (%)

0,04

- - Mideast and Asia {%)

0,02 0,00 2002

2003

2004

2005

2006

2007

2008

Years Source: World Trade Organization, 2009

Figure 2. World Merchandise Trade Shares (Exports),

2002~2008

World Merchandise Trade, Exports 0,42 0,41

0,14

,-

/"'-...

"\. '\.

0,40 0,39 0,38

0,12 0,10

<,

0,08 - - EU (%)

<, ,

0,37

0,04

0,36

0,02

0,35 0,34

0,00 2002

2003

2004

Source: World Trade Organization, 2009

1341

0,06 --Mideast and Asia (%)

2005 Years

2006

2007

2008

it should be no surprise to see the declining trend continue in the total trade

share of the EU countries coupied with the rising share of Asian economies as of today, particularly given the financiai crisis of 2008. Capital flows to the US and the EU markets have Significantly siowed down while the inter-trade volume among the developed nations (i.e. the G-7 members) was hit considerably over the last couple years. In addition, global FDI figures imply that the developed economies, such as the US and the UK, were severely affected by the crisis as total FDIs declined by 68 percent and 85 percent, respectively in 2009. Overall drop in the FDI flows to the 20 deveioped nations reached 54 percent while the 34 emerging market economies suffered from a 40 percent decline in the FDi flows in 2009, due to the crisis. The aforementioned 54 countries account for more than 90 percent of the world's total FDI flows -which witnessed some 49 percent decrease in 2009." Recent data that provides a projection for the mid-term also suggests that China is expected to surpass all G-7 members, except the US as of2015, in terms 135

MEHMET BABACAN

of its economic size.14The IMF's World Economic Outlook (WEO) 2010 report also suggests that the Emerging and Developing Economies' stake in world trade has increased from a total volume of3.2 trillion US Dollars (approx.) up to around 11.8 trillion US Dollars in 2010. During the same period, however, IMF data suggests that the total trade volume of advanced economies witnessed an increasefrom 9.5 trillion US Dollars in 2002 up to 18.2 trillion US Dollars in 2010.15 All in all,
Turkey's Eastward Shifting Axis: Integration or Penetration? For more than half a century, Turkey's traditional trading markets include the EU, Russia, the US, and parts of the Middle East. The EU has the highest share due to its market size in terms of geography, population (i.e. demand) as well as its GDP. Increased involvement in bilateral trade with the European Union (EU) economies implies that Turkey's export sector needs to maintain its competitiveness while being regionally oriented westward. Trade between Europe and Turkey has blossomed, especially after Turkey'saccession to the EU Customs Union at the end of 1995. Total trade volume hit 81 billion Euros (104 billion US Dollars) in 2009. However, the Customs Union agreement was signed without concluding a free trade agreement. Therefore, Turkey still suffers certain losses due to the lack of a Free Trade Agreement (FTA) or because it is not a full member ofthe ED.

1361

Whither an Axis Shift: A Perspective from Turkeys Foreign Trade

This has led Turks to increasingly The share ofEU markets in question the current status ofEU-Turkey terms of Turkish exports trade, despite the free trade of certain declined significantly from goods and preferential access to the EU 56 percent in 2002, down to markets, since «this relationship remains 46 percent in 2009 while Asia's overly complex and discriminatory toward Turkey in two respects. First, as share increased from 14 percent a precondition of joining the customs up to 25 percent during that union (CU), Turkey was required to period adopt the EU's existing FTAs with partner countries, including the European Free Trade Area. However, arrangements between the EU and third countries since 1995 automatically extend to Turkey; even though Ankara is excluded from the decision-making process. Second, Turkish markets are automatically opened to these third countries under the customs union agreement, but Turkey is not automatically granted reciprocity by the third country. Reciprocity depends on Brussels' goodwill and willingness to include a 'Turkish clause' in their final agreement. 'This arrangement is unsatisfactory. Turkish commercial policy has essentially been seconded to Brussels without any gain in voting rights. Trading away its sovereignty might be a price worth paying if EU membership was assured, but membership is not assured. Therefore, the EU should adopt a full and comprehensive FTA with Turkey to replace the customs union agreement:' 18 A new wave offree trade agreements with neighboring countries is expected to take place, as stated in the EU's 2007 Market Access Strategy. Under such terms, Turkey expects to be included in an expanded FTA scheme, such as the EuroMediterranean Free Trade Area (EMFTA), as a current member of the Union for the Mediterranean. Sectors previously excluded from the EU-Turkish Customs Union, including agriculture should therefore be included under such an FTA. Although the US is relatively a staunch supporter of Turkey's EU bid to become a full member, the US still gains from Turkey's advanced ties with the EU as a recent analysis puts it: "A bold and comprehensive FTA with Turkey could set a precedent for achieving greater volumes of trade than the EU Customs Union and would create an enduring basis for EU-Turkish integration separate from the highly politicized question of EU membership. Establishing an FTA with Turkey in place ofthe customs union should not remove the prospect ofEU membership for Turkey. Nor should the EU withdraw its financial aid to Turkey as designated under the Instrument for Pre-Accession Assistance. However, if Turkey is ultimately denied EU membership, Ankara will still be in a position to benefit from

1137

'Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

MEHMET BABACAN

an enduring trading relationship with the EU and its Mediterranean partners. If Turkey's accession to the ED remains as unlikely as it appears today, Europe needs a fallback position to ensure that Turkey still has a reason to maintain good relati ons."19 Figure 4. Turkey's Trading Partners (Export Shares), 2002-2009

Turkey's Exports by Country Groups 0,7

-I

10,3

0,6

)C~

0,5 0,4

I _

0,15

0,3

--EU(%)

0,1

0,2 0,1 0

0,25 0,2

-

members in a period of declining intra-EU trade figures while talcing advantage of outbound capital and commodity flows as it attracted significant amounts ofFDls and boosted its trade volume over the last decade. According to the relevant figures above and below (Figure 4 and Figure 5), Turkey's trade with the Asian economies, including the Mideast countries, is constantly rising while there is a gradual decline observed in the trade with EU-27 during the period of 2002-2009, despite the slight correction for the imports from the EU in 2009. The share ofEU markets in terms of Turkish exports declined significantly from 56 percent in 2002, down to 46 percent in 2009 while Asia's share increased from 14 percent up to 25 percent during that period. For the imports, ED's share declined from roughly 50 percent down to 40 percent over the period of2002-2009 while the share ofAsian countries surged from around 19 percent in 2002 up to 27 percent in 2009.

Asia (Mideast included, %)

Figure 5. Turkey's Trading Partners (Import Shares), 2002-2009

0,05

-1

I0

Turkey's Imports by Country Groups

2002 2003 2004 2005 2006 2007 2008 2009

Years Source: TurkStat, 2009

0,2

Turkey's trade with the EU-27 block has been consisteutly subject to limited declines over the period of2002-2009 in terms of its share in total, as observed in the figures above aud below. This phenomenon is partly due to the above-mentioned problems over the customs union agreement and Turkey's prolonged quest for joiuing the 'club' as a full-member while the ED's most weighty members, like Germany and France, are still resistant to Turkey's inclusion. It is crystal clear that the customs union in practice for instance has not yielded along-run 'trade creation' in terms of percentage change but- rather a 'trade diversion' on behalf of Turkey." The recent comparative shift in Turkey's trade with its neighboring countries aud 'clubs' has also to do with the globally risiug performance of the East, as stated in the previous sub-section. Iu addition, "the share of the EU-27 group in the Turkish exports decliued from 48 percent down to 46 perceut between 2008 and 2009, which is considered as a setback in Turkey's traditional trade markets and an indicator of both a shift of axis in the EU markets and Turkish exports, by some circles. Accordingly, a recent global shift away from the EU-27 block to the rest ofthe world is taking place in terms of multi-national firm operations, investments and capital and commodity flows during the crisis period of2008-2009~" Turkey however missed the opportunity of both increasing its exports to the EU 13 8 1

I

---------+. 0,15 1

+-.1

I

I

J , , , , , , ,

0,1

t

-EU(%)

-Asia (Mideast included, %)

:05

2002 2003 2004 2005 2006 2007 2008 2009 Years Source; TurkStat, 2009

Another significant development in Turkish trade is observed in the relative changes in the shares of Turkey's domestic regions in the context of its total trade volume. Turkey's South-Eastern Anatolian and Mediterranean regions as well as the Eastern Anatolian region gained comparative advantages in the period of 2002-2009 where a significant overall increase was witnessed (see Table 7). Crossborder trade also made a substantial contribution to the recent increase in trade activities in the Southeastern provinces, thanks to the visa-free travel regimes and reduced bureaucracy since 2002. Turkey's recently improving ties with Middle

1139

MEHMET BABACAN

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

Eastern and North African countries as well as Russia and other Eastern economies are in part due to the overall development in the Turkish trade sector's performance and also in part due to the EU-Turkey political issues (including the visa disputes). Therefore, it is still too early to speak about an axis shift, as the EU-27 block will remain the main trading partner for Turkey for the foreseeable future, even if its full-membership bid fails to produce the successful outcome Turkey has been working towards achieving in the next decade. Turkey has successfully managed to increase its total trade volume as well as the diversity of its destinations in the period of 2002-2009 while the main axis of its foreign trade partners remained unchanged. The figures from OEeD -provided in the Table 1 below- imply that Turkish trade has witnessed a significant decline almost in all fronts, except the group of African countries, during the recent global financial downturn. However, during the whole period of2002-2009, the weight ofthe EU-27 countries has seen a relative decline while the rest of the world accounts for an increasing share of Turkey's total trade in terms ofpercentages. That alone does not indicate a shift of axis but rather the effective utilization of potential markets, i.e, in Africa.

----

Table 1. Turkey's Trade by OEeD Country Group Classification, 2002-2009 iJl)ll.uu~mE5 1101"

P..... ,O>
N"'.QKDIl
Import>

'0.

9.W.6Z!U46

l.044.l>l9.lllS

4.~94.lSUn

1.111.2114.161

'"'

,..

~,

'"'

6.1!ll.B71U77

,0> 7.1S13llUSB S.384.ll5.7Sl

'-

.u47.71D.41l 1.9J7.37l.6S6

""

IlmpoFl>

:lCOl

1'I.909.lllUl15

Uoo.7l0.l88

10.685.776.121

HO-tzIl7.11.5

UI'.8«.l1lS

,m

-

3.l3lI.413.1Il 2.l1s.ssa.m

l.08UIlU~7

..

,~

19.ool.49S.l14 i.l5SSOO.ll77

""

lJi4l.Irni.lOl

"'" -,,0.

>000

U10.lSl.28:l 4.717.9SU60

-

-

3-410.147.917 NooOO])""i>

Importl

-

~,

4.~9S.01llW

1!o000])"",1"

Import>

~o.

1001 ~n.1&1.1illl

Gulfmbl'n'.,1Itrfts 2001

"'

145.0:34.\123

1:l3i.14l1.410

U16.!lS.1n

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••

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,", 16.104.l01.00 •.m.Oi4.571 2001

-

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r

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4.810.lJa~

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I

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,~

24.l1UWW 10.104./01.716

,~

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I

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3.S
Source: DEeD Statistical Database, 2010

The above table provides insight on Turkey's commodity trade, which clearly indicates a decline both in Middle Eastern and European trade volumes during the recent crisis period (2008-2009) while during times of the world trade 140

Trade Booms and Busts: Signs of an 'Axis Shift'? Turkey has witnessed periods of trade booms and busts for decades. However, all are associated with periods of political stabillty or instability which had their corollary economic repercussions. In this section, the theoretical foundation of Turkey's so-called axis shift from a trade perspective is questioned. Empirical evidence and recent data are employed in the analysis when necessary: Relevant links between the recent political orientation and its economic consequences will also be reflected under the following sub-sections. The increasing influence ofTurkey's new diplomatic assertion in its region is argued to be coupled with deepening economic ties manifesting itself in the number of free trade agreements, visa-free travel agreements, and even in new flight routes between Turkey and its partners. Turkey's increasing relations with its neighbors will be analyzed first through the 'gravity equation tool in the new trade theory which focuses on the geographic as well as cultural proximity of countries engaging in bilateral trade. The second sub-section will underline the important transition ofthe political and diplomatic dimensions into the economic dimension. Finally, last sub-section will discuss the lack of a long-term economic strategy to maximize Turkey's foreign trade potential with its neighbors as well as its other trading partners.

lOOl I~OL4lW9

111l47.276.0ZiJ

U/l.m.m

lS.665~OO.m

booms (2002-2007) there was an increase. Significant determinants of an 'axis shift' should have also revealed themselves in terms of services and labor flows. Although the latter is still far from being accomplished in today's world, the first is increasingly developing, particularly with the ED. As underlined in the previous sections, Turkey's service industry has strong ties with its European counterparts, in telecommunications, tourism, and finance. Therefore, bilateral trade in services which reached 46.5 billion US Dollars in 2008, mostly with the EU members is yet another indicator of a broadening axis, rather than an 'axis shift:"

Turkey's PTAs and the New Gravity Equation Gravity (equation) models are considerably new to the theory of international trade though they have been in use for more than a decade now. In general, new trade theory takes economic size, geography or rather proximity, culture, common language or borders and other such issues into account in order to estimate the role oftrade in cross-country growth forecasts. In the case of Turkey, the FTAs created more than the customs union with the EU, as they are increasingly effective in diversifying and magnifying Turkish exports. The table below and the map provide an insight into Turkey's new trade dimensions, taking the common elements in bilateral relations into account. 1141

MEHMET BABACAN

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

--

Table 2. Turkey's Free Trade Agreements (FTAs) and Regional Trade Agreements (RTAs)

:£4~-~~~.

'

<;(1:

Country

r)' 'Q ,.

-\

IIlI

IlIII

In NegDtiation Process

Il!i.I

Trade Protocol

~";L;r~.,

r: u

,

"

/

Source: Undersecretartsr for Foreign Trade, March 2009

Turkey's new trading partners are not only in the Greater Middle East but also in Latin America, Asia and North America as well as Africa as shown in the above Map 1. It depicts the countries that Turkey has engaged with in terms of FTAs. Although common language (as seen in bilateral relations with Central Asian and Caucasian countries), cultural heritage and ties (observed in Middle Eastern, Caucasian, and Balkan regions), and shared borders (in all cases) are important elements of the rapprochement to the aforementioned regions, Turkey has managed to establish a widespread network of bilateral trade relations even with very distant (both geographically and cnlturally) countries via governmental and private initiatives since 2002. The history ofthe preferential trade agreements signed by Turkey, however, dates back to before the first FTA was established with the European Free Trade Association (EFTA) -represented by Austria, Finland, Switzerland, Iceland, Liechtenstein, Norway, and Sweden in 1992. Since then, Turkey has realized more than a dozen of FTAs (excluding the customs union agreements) with varying countries as indicated in Table 2 below. While establishing FTAs and RTAs throughout different regions in the world, Turkey has managed to establish visa-free travel regimes at all levels with more than a dozen countries within the last decade. Countries that Turkey signed mutual visa-free travel agreements on different levels or visa holder-status include: Tajikistan (2003 and 2009); Uzbekistan (2003); Romania (2004); Guatemala (2004); Venezuela (2005); Paraguay (2006); Colombia (2006); Latvia (2006); Vietnam (2007); Kuwait (2007); Afghanistan (2007); Montenegro (2008); India (2008); UAE (2008); Kosovo (2009); Djibouti (2009); Syria (2009); Pakistan (2009); Albania (2009); Kenya (2009); Qatar (2009); Libya (2009); Jordan (2009); 142

I

TvD.

Agreement

Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral Bilateral

CU CU FTA FTA FTA FTA FTA FTA FTA FTA FTA FTA FTA FTA FTA FTA FTA

EFTA EC

"

Infor<e

Free Trade Agreements

Israel FYR Macedonia Bosnia and Herzegovina Croatia Tunisia Palestine Morocco Egypt Syria Albania Georgia Montenegro Serbia Chile Jordan

Date of Sie:natur 1991 1995 1996 1999 2002 2002 2004 2004

2005 2005 2006 2006 2007 2008 2009 2009 2009

Date of entrv into force 1992 1996 1997 2000 2003

2003 2005 2005 2006 2007 2007 2008 2008 2009 2010 --- in progress --- in progress

Regional Trade Agreements*' " Protocolon Trade neectrettcos PTN and Economic coccerencn orseonetton ECOI Countries Agreement Date of Signature Date of entrv into force TvD. Bangladesh- Brazil- Chile-EgyptIsrael- Korea- Mexico- PakistanRTA 1971 1973 Plurllateral Paraguay- Peru- PhilippinesSerbia- Tunisia- Uruguay Afghanistan- Azerbaijan-lranKazakhstan- Kyrgyz RepublicRTA 1992 1992 Plurilateral Pakistan- TajikistanTurkmenistan- Uzbekistan Source: World Trade Organization (WTO) and Turkish Undersecretariat for Foreign Trade, 2009

Azerbaijan (2009); Lebanon (2010); Tanzania (2010); Cameroon (2010); Russia (2010); Serbia (2010); Portugal (2010); and Greece (2010).23 One could assess the reach and diversity of Turkey's new foreign policy and thus trade relations via established free trade agreements, new flight routes, and visa agreements which indicate a multi-polar geographic orientation rather than a clear-cut axis shift. In addition, the Turkish Undersecretarlat for Foreign Trade documents reveal that the government is in negotiations to finalize the establishment ofFTAs with Lebanon, the GCC countries, Ukraine, MERCOSUR countries, Libya, Mauritius, Seychelles, and Faroe Islands while initiating talks with Mexico, Algeria, South African Customs Union, ASEAN, South Africa, ANDEAN, India and 36 countries under Africa Caribbean Pacific Group of States (ACP).23Therefore, the relatively unexploited nature of Turkey's bilateral trade with the aforementioned countries or groups offers a unique opportunity to rapidly develop further economic and 143

MEHMETBABACAN

commercial ties. This list of countries, on its own, is irrefutable evidence that the argument for an axis shift is weak and it has much more to do with providing some insight into Turkeys future vision of diversifying its trade destinations. The role of The distance between countries that have bilateral trade and the country sizes are used as instruments which are seemingly unrelated to any other factor affecting their income levels, respectively. While using one of the instruments, however, one should control the other since they are negatively correlated. Constructing an instrumental variable for trade and estimating the effects on income suggest that the trade share may not have a positive significant effect on income growth while in some cases trade variables have insignificant positive or again insignificant negative coefficients. In general, however, using geographical variables as instruments for both bilateral and international trade alone could be said to eliminate statistically relevant problems issues but it does not always provide satisfactory results in explaining the effects of trade on income.

The Role ofPolitics on Turkey's Trade Policy At the dawn of 21" century, Turkey has become increasingly a global actor while still revealing that its capacities are mostly regional and it possesses internal weaknesses. Nevertheless, many argue, more powerful than a decade ago, Turkey has emerged as a key member in international organizations, including the United Nations Security Council, Organization of the Islamic Conference (OIC), the OECD, even in the International Monetary Fund (IMF), and the World Bank. The latter two, however, should be read under the context of the increasing influence of emerging market economies altogether. Along with the increasing weightin the IMF and the World Bank Group, Turkey's G-20 membership (1999) also becomes more critical and operational nowadays, thanks to the gradually evolving nature of the global economy and governance since 2008." Regarding Turkey's relations with and its position in the Middie East particularly, Foreign Minister Ahmet Davutoglu underlined the importance ofpaying attention to the region at least in terms ofits potential strategic assets while showing efforts to put the pieces together in the 'geo-economically torn apart' Mid-eastern 1441

"Whitheran Axis Shift: A Perspective from Turkey's Foreign Trade

countries." On economic ties with the European Union (ED), Turkey's foreign policy chief stresses that due to the uncertainties regarding the future track ofTurkey's EU membership processes, the country should formulate a new development strategy based not only on its domestic potential but also to support the potential opportunities originating from its geographic location." In an assessment of the foreign policy developments of2007, Davutoglu asserted that Turkey's diverse regional composition or unique central position gives her a capacity to maneuver in several regions simultaneously, which in turn creates an area of influence in its immediate envtrons.w The five pillars of Turkey's new foreign policy vision have been delineated as follows: i) balance between security and democracy; ii) 'zero probiem policy toward Turkey's neighbors'; iii) development of relations with neighboring and distant regions; iv) adherence to a multi-dimensional foreign policy; and v) rhythmic diplomacy. Within the framework of these five pillars, Davutoglu refers to the role of individuals, corporations, and civil organizations as complementary in the pursuit of Turkey's foreign policy." Diplomatic efforts for increasing regional political and economic stability included mediation in the indirect peace talks between Israel and Syria, diplomatic engagement in Iraqi politics, and the mediation of nuclear talks between Iran and the PS+ 1 countries (five permanent members of the UN Security Council, EU and Germany) together with Brazil. Turkey's pursuit for stability on the domestic, regional, and global fronts is accompanied by its increasing economic presence in its own region and the world. Turkey is asserting its new gee-strategic position through a series of policies and instruments within the theoretical cadre of strategic engagement accompanied by practical and often tactical moves to enhance regional and bilateral diplomatic and economic relations. An emerging business group, TUSKON, which is largely comprised of exporters, has been actively engaged in African and East Asian markets while another business group, the Independent Industrialists and Businessmen's Association (MUSIAD) is in search for increased cooperation with the Gulf countries. In the meantime, Turkey's oldest business group, the Turkish Industrialists and Businessmen's Association (TUSIAD), continues to actively lobby for the eventual EU membership of the country. Given such a diversified composition of efforts to promote Turkey's global position, one should also note the dramatic rise in the number of direct or indirect flight routes of the national flagship carrier, Turkish Airlines (THY), since 2002. Between 2002 and 2010, the distribution of the newly opened routes is also informative, as 14 out of the total 58 new routes are to European cities, while 18 routes are to Asia. THY meantime has opened 14 flight routes to the Middie Eastern and North African cities, along 1145

MEHl\tIET BABACAN

with eight new routes in Africa." Businessmen are now easily traveling and conducting business witb tbeir counterparts via direct flights to the capitals ofAfrica, Asia, and Europe. Turkey's increased economic influence in its region manifested itself in the volume of trade witb neighboring countries, as observed in TUrkish-Iranian bilateral trade figures (up from 1.2 billion US Dollars in 2002 to around 5.4 billion US Dollars in 2009); Turkish-Russian bilateral trade figures (up from 5.1 billion US Dollars in 2002 to 22.7 billion US Dollars in 2009) and Turkish-Syrian bilateral trade figures (up from 773 million US Dollars in 2002 to 1.8 billion US Dollars in 2009), despite the negative effects of the recent global financial crisis." Similarly, the total trade volume with the Latin American and Caribbean countries rose from 735 million US Dollars in 2002 to more tban 4 billion US Dollars as of 2008. As tbe study aimed to demonstrate, all of tbe figures illustrated are practical indicators reflecting Turkey's changing foreign policy structure from an international trade perspective. Economists often argue that political outcomes or the type of the state can effectively create an 'efficient' trade policy scheme. The interplay of economic! commercial actors in a country or at the global level has a significant result on potential trade games and even trade wars." The relationship between trade and growth and their impact on income distribution within and across countries has been intensively discussed in a vast body of literature. The relative changes in the income levels among different business groups or industrial segments in Turkey also result from the interplay between politics and trade policies. In shaping a country's trade policy, the size of its domestic market, the variety of its products (i.e. amount of capital or intermediate goods), and geographic proximity are among several important elements. Trade laws and the efficiency in doing business are otber components to impede or speed up the country's trade performance. As politics are important in shaping trade policies, the latter is also effective on income creation and redistribution mechanisms." Trade policies are usually correlated witb other factors related to income (growth), for instance, tbe adoption of free market trade policies as is tbe case with Turkey in tbe 1980s, as in other developing countries, brought about subsequent policy measures such as financial liberalization. The aim of tbis paper is, however, to isolate the rest of the factors other than trade that would explain Turkey's current economic policies. Therefore, the recent developments on the political scene and its reflections on trade policy will be at tbe focus of this analysis. Since tbe early '90s, the emerging business groups can be described as tbe economic face ofTurkey's changing polit146

I

~

'whither an Axis Shift: A Perspective from Turkey's Foreign Trade

ical environment. Despite tbe continuing role of TUSIAD in tbe political sphere, MUSIAD and export unions such as tbe Turkish Exporters' Assembly (TIM) or formations like TUSKON in recent years are increasingly effective in shaping the country's trade policies. Traditional conglomerates mostly represented under TUSIAD are mostly clustered in automotive, chemicals and metals, construction and energy, finance and pharmaceutical industries while relatively smaller size firms -mostly represented in MUSlAD- operate in textiles, retail, consumer electronics and food sectors. TUrkey's emerging trade destinations provide a relative advantage for the smaller size entrepreneurs due to their firm size while yielding Significant amounts of positive externalities for the conglomerates in their increased bilateral economic ties as well. Turkey's new trade orientation or re-balancing act has been, therefore, beneficial to all parties at tbe domestic level while providing cyclical results -beside Africa- at the international level. The latter argument is evident in Turkey's significant losses in European, North American, Asian and Middle Eastern -rncluding Gulf countries- bilateral trade volumes (see Table 5 and Table 6). Despite the increasing trade volume with its neighbors in recent years, Turkey has not adopted a well-structured long-term export strategy though its new pro-active foreign policy aims at creating regional economic zones. An ad hoc ratber tban a systematic approach is embraced in trade policy while the role of aforementioned business groups earns increasing weight. The inter-governmental relations pave the way for exporter to reach new markets while a comprehensive trade strategy is still far from being implemented. Turkish exporters are still highly dependent on state policies and tbe possible agency problems might hinder further economic development as bureaucratic and administrative quality are key to success in such a framework. Despite the recent rise in Turkey's trade performance, we may conclude, it is too early to suggest an 'axis shift' in the modes of production and the relative roles of small and middle sized entrepreneurships (SMEs) versus conglomerates. TUSIAD in tbat sense continues to be tbe leading club botb in terms of its total trade volume and tbe value-added.

Prospects for Turkish Trade in a Changing Global Economy Due to the structural comparative advantage and the country's increasing competitiveness, Turkey is expected to remain as one of the foremost trading partners for the ED countries. It is quite natural for a pivotal state like Turkey to develop new ties witb tbe global economies' rising stars and its neighboring 1147

MEHMET BABACAN Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

Turkey's recent rise, based on its rapid economic growth, is reinforced by its strong ties to the ED, as it obligates Turkish exporters to function with a high level of standards

countries due to several reascns.. increasing economic power (GDPs etc.), dynamic population (driving the demand), and common ties (I.e. geography; history; religion and culture). Therefore, an axis shift debate becomes obsolete when studying the facts and once the negative and skeptical perceptions over Turkey's new foreign (trade) policy are removed. Such a debate reveals the remnants of the old compartmentalizing mentality of the Cold War in the minds of Turkey's Western allies.

Table 3. Turkey's Export Structure, 2000-2009 (in terms ofBEC) Mlllian us Dollars

BREAKDOWN OF EXPORTS BY BEC (*)

The differences in the rate of economic growth are often observed to depend on the relative sizes of the countries under the endogenous growth models -which imply that positive gains or increasing returns of scale are possible provided that endogenous factors are driving the rate ofgrowth among countries. Therefore, increasing the size ofa country leads to expanding the variety in intermediate goods and results in efficiency gains in production of the final goods. This increased diversity in exported goods is found to have a positive effect on trade volumes and thus growth rates, as shown in numerous empirical works. Another implication is the decreasing fixed costs of innovative new intermediate inputs. This is the cause of a permanent increase in the output due to a larger country size. Therefore, we may conclude that Turkey's trade with its neighbors and other short-distance partners will yield relatively bigger gains for itself. However, it is all directly linked

zocc zen zooa zoos

CAPITALGOOD5

2.176

2.658

azsc

""" ."" .,,,

Ca ital goods (Excepttrnns ortatiOl'lsvehldesl

1.020

1.220

1.338

1.942

2.752

Transportation vE'hicies Incidental to industry

'15'

1.439

1.452

'"''

3.179

U1 rocessed ma~rials fnddemtal to industry

Processed materIals Incidental to industtv

'"

Parts of trans ortation vehicles

Processed materials offood and bevera

9.493

e

Unprocessed fuels and oils Parts of Investment goods

1.209

,

'" ,go

Processed fuels and oils

217

CONSUMPTION GOODS

"'''''

otomobiles

12.879

s

9

-m

974

""

2.453

7

ssa 1.557

'44

''''

120

asa

z

16.725

3.407

a.oaa

5.599

5.341

8.156

""

.,,,

~

s

9.842

".".

""" U.= 5.814

s.aoa 49.711

3.206

ass

47.184

35.162

z a.as-

a.iee

3.713

z.sza

4.561

6.162

s.sea B'

4.951

1.324

1.144

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3.530

5.144

U.".,

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47.077

'"'

255

""

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1.298 2.197

3.934

4.373

,..., ,.

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7.474

.'"

6.003

6.906

1.583

8.556

&0"

7.864

'""'"

10.507

12.443

12.519

10.654

5.837

6.180

s.sa

7.135

6.355

3.239

'.153

3.813

4.226

4.389

aszs

2.970

4.210

a.aso

1.098

1.420

2.253

C'"

2.195

3.215

Semi-resistant consumptIon "oods

5.136

S.955

7.215

aen

Non-resistant consum tion oods

2.919

2.861

3.403

a.eos s.isa

Unprocessed of food and beveral':es

""

1.662

1.549

,.

."

2576

1.415

1.221

1.777

2.252

,,,

Gasoline

ss

Transportation vehicles not Incidental to industry

zs

48

48

"

as

""

m

32.699

"''' ansa ,.". " "0 '" isa g" '99 '" '" z.csz '00

'"

i.ass

15

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zoea

13.755

1.358

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OTHERS

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s.saa

20.573

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Processed offood and b"verages

aoes zoee 7.998

"'99' 14.657 '''''' as.ses 30.'" 37.788 99."" UXB 950 1.198 ,'" ,.. " '''' 1.711 25.706 '" 10.474 eoe 18.661

11.565

INTERMEDIATE GOODS

Unorocessed materials of food and beverages

The traditional Western perception of the <East' once again seems to have emerged in the recent 'axis shift' debates without any solid basis. In the wake of changing global economic setup with the rise of G-20 specifically; it would be quite normal to see Turkey becoming a regional player as well as an actor in the newly shaping global economic structure. Based Onthe trend over the last decade, we could argue that Turkey continues to promote new development in terms ofits foreign trade. This trend could continue for the foreseeable future given the political stability within the country combined with favorable global economic conditions, particularly for the developing economies. The significant dependence over the import ofintermediate goods and the lack ofa proper R&D strategy, however, are among the factors which hinder a mare rapid economic growth in the country. In the meantime, Turkey needs to develop a long-term trade policy strategy plan to address the current weaknesses in its production, marketing, and other segments of its trade structure.

ANNUAL

asu

ee zss

TOTAL "-775 3L334 36.059 47.253 (-) Table bosed on World Trade Organization (WTO) / Me definition.

9.832

'"ss

,.'" C,,,

6.087

-n '" '" '" '"991 ". ase sas ". '" ss.re E.'" '"'128 ""'" 85.535

132.027

Source: TurkStat,2009

to a comprehensive industrial and commercial policy design, which will provide substantial productivity increases in the long-run. The size or scale effect and productivity increase would not have the same impact in cases where policies do not matter. It is, however, crucial for Turkey to maintain a robust and continuous productivity increase that would guarantee competitiveness. The endogenous growth models referred above also imply that with knowledge spillovers, trade increases the growth rates. In that sense, Turkey's trade with a wider set of countries will benefit all parties in many aspects. Table 3 and Table 4 provide a clear understanding of the lack of a sustainable export-oriented growth strategy as the export and import shares ofintermediate goods -which are crucial for final production-, are hardly correlated. In 2009 only, the amount of intermediate goods imported (99.5 billion US Dollars) is almost as much as Turkey's total

148 149

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

Table 4. Turkey's Import Structure, 2000-2009 (in terms ofBEC) BREAKDOWN OF IMPORTS BY BEe (*)

""" ,."" "'" aeoo """ """

CAPITAL GOODS

ll3"

~itaLI!.°od. (ExcePttra~ort1Jtions vehicles

9.264

Transportation vehicles tncrdental to industry

36.010 30.301 37.656

Unprocessed materials incidental to industry

2.784- 2.037

Processed materials incident'll to industry

Parts of trans ortation vehicles Unprocessed materials of food and hevera,;es Proc,;ssed materials of food and heverages Processed fuels and oils CONSUMPTIONGOODS

Otomohiles Resistant consumption aocds Semi-resistant consumption goods

2.957

16.099 13.884 18.032

Unproe<>ssed fuels and oils Parts of investment goods

7.571

"'" C"" "'.

INTERMEDIATE GOODS

a.sas

,."" ""

4.957

Non-resistant consumpt!0!!J':oods

Processed of food and heverages Gasoline Trans ortation vehicles not incidental to indust

crases TOTAL

zooa

s.aza

zoos

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c;m s.""

".'" ..,.,

67.549 S.n6

zoos

a ".""

13.494- 17.120

3.243

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•.sez a.sea 7.319

23.256 4.765

3.:078

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45.476

saas

65.680

43.483

14.6.99

~.m.

22.830

32.259

17.n2

6.747

7.622

,,~

7.329

,."" s.cez ,..., e.zsa '''' "'" "" ,.'" .'" ssz m i.sas '" "" eco '" "" sss ''0 ,,, ,",OS '" '" '" '" '" aesa "" as, , ,'WO ".", '"'" """ """" ", e.ass saz C,,, "" "" z.zss ssz ra '" cece "" La" s.zas '''' m 'm ns "" US zzo <0, 3" zsa ,os '" .., ,,, U, n, 300 ,,, OS, r.ra r.coa "'" ziz ,."" '" '"as '" asas .ns '" ", -tn, srr " " '" m sse soc esa ", sea '" "" '" sasea '" '"' m.", "''' sr.ssa ss.sao "."" 3.161

e.rsa

f'''} Table based an World Trade Organization (WTOJ/ DECde/init(on.

6.432

4.336

7.427

3.969

2.596

.

813

1.126

1.317

10.455

n",

7.839

3.154

2.074

1.742

5.356

5.791

zaia

2.220

7.955

9.796

14.511

10.831

16.U6 ia....

4.214

917

1.440

1.265

1.911

2,506

3.184-

3.415

U6.n4

3.247

4.747

4.552

3.027

3.531

3.914

4.090

4.359

5.301

1.172

1.306

4,949

Source: TurkStat, 2009

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Turkey's recent rise, based On its rapid economic growth, is reinforced by its strong ties to the EU, as it obligates Turkish exporters to function with a high level of standards. Positioned at the top of the quality ladder, the EU markets drive the export sector to become more competitive by increasing the quality of commodities and services while maintaining competitive price levels. With its unique geographic advantage, supported by a dynamic population and a significantly large market size as well as improving human and physical capital stock, Turkey is also becoming an indispensable partner of European trade. As depicted in Table 5,

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exports (102.1 billion US Dollars). Another way to look at Turkey's performance in terms of a structural breakthrough is to assess the technology component or share in export goods. In both terms, Turkey is far from producing value-added items that would increase efficiency as well as overall economic infrastructure.

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150

1151

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

MEHMET BABACAN

Table 6. Turkey's Trade with Selected Countries, 2008-2009

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,==

Turkey's recent initiatives and relative orientation towards the East does not only stem from its own policy choices but also reflects an indispensible necessity due to the evolving nature of the world political and economic makeup

Turkey's trade is dominated by the traditionally advantageous export industries, such as textiles, machinery, chemicals, plastics, metals and automotive subsidiaries. This is true not only for trade with the EU-member countries but also the newly engaged markets. However, for Turkey to ensure a sustainable future for its exports - it is crucialthat it make a significant shift towards hightechnology intensive products_ As observed in Table 3, 4 and 5, the structural breakthrough for the export sector is vital for a sustainable path to maintain long-run growth. The export sector should strive to reach a significant level of quality and creativity in terms of marketing power as well as productive and innovative capabilities in order to meet its full potential. The recent global financial turmoil can be used as an experimental case for our study since it revealed the structural weaknesses of Turkey's export sector and its high level of dependency to imported goods. During the period of 2008-2009, Turkey's trade with its traditional partners such as EU-27, North America, Russia, China, and the Middle East as well as many other markets shrank dramatically, as observed in Table 6. The only exception to this general rule came from certain North African and Central Asian markets.

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Turkey's position among EU-27's trade partners is almost unchanged over the period of2005-2009, as it ranks 7'" in the whole five-year period, which could be read as another rejection of the axis shift arguments.

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Turkey's export sector should, therefore, learn how to advance in terms of technological capacities as well as marketing power, Turkey is not the dominant power or the leader as an exporter in the new markets it has extended its arms across the globe. Therefore, Turkey needs a comprehensive strategy that takes geographical, cultural and social as well as technological and economic (i.e, efficiency) aspects into account, which will pave the way to succeed in the longterm. TUrkey's recent foreign policy orientation towards its region and the world could facilitate the creation of positive externalities. However, Turkey's failure to design a profound economic strategy might lead to an alignment of interests of the policy-makers and the business circles in the short-run. The rent-seeking business groups that aim to maximize profits and the current export-oriented regime fostered by the government will run counter to the need for generating 153

MEHMET BABACAN

Turkey's new trade destinations and relations have helped to alleviate the negative impact of the global financial crisis of2008

the necessary technological and innovative infrastructure the Turkish economy requires to position itself on the world trade stage as a permanent and powerful actor. Unfortunately, this has already manifested itself by Turkey's low level of investment in technology and registered patents. The lack ofvalue-added in most of the sectors also leads to a higher current account deficit, which is an additional constraint to Turkey's path towards long-term sustainable growth. Conclusion

Turkey is emerging as a pivotal state with its vibrant economy and increasingly stable domestic political scene in the first decade of the 21" century. The present paper provides an insightful while critical understanding ofthe evolving nature of the debates hovering over Turkey's new foreign policy structure through Turkey's perspective offoreign trade from 2002 to 2010. A detailed and careful analysis reveals that the so-called 'axis shift' debate becomes obsolete once factual economic indicators are demonstrated and analyzed. From the number of flights overseas to the mutual visa-exemption agreements, and the establishment of cross-border commercial ties; all are indicators of Turkey's changing trade environment. Turkey's recent initiatives and relative orientation towards the East does not only stem from its own policy choices but also reflects an indispensible necessity due to the evolving nature of the world political and economic makeup. Therefore, this analysis puts forward the argument that Turkey does not fit into an axis shift' debate. The term that would best coin the recent developments might be an 'expansionary axis' or a new 'creative axis' The ongoing trend in Turkey's recent foreign policy and, therefore, foreign trade rapprochement with the East in broad terms, seems to have entered into a new phase that could be irreversible. However, the current global trends would need to prevail in the medium and long-term. Nonetheless, Turkey's new trade destinations and relations have helped to alleviate the negative impact ofthe global financial crisis of2008. Although Turkey's GDP shrank by 4.7 percent and its total trade volume significantly dropped by around 27 percent-on annual basis;" Turkey has managed to avoid a long-term recession as its economy is expected to grow at a rate of above 7 percent in 201036 and the total trade volume is estimated to dramatically recover. However, the negative counterpart is Turkey's widening current account deficit, of which its trade

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade

deficit is a major factor. As Turkey's trade volume increases, so does its deficit, due to structural issues as stated in the previous sections. Therefore, a sustainable trade scheme should incorporate a solution to remedy the structural deficit problem, which stems from the mode of production and low levels oftechnology, thus Turkey produces products with a weak value-added. Since the current trade deficit is unsustainable in the long-run, Turkey's recently discovered trade relations, which usually yield trade surpluses are ofcrucial importance to achieve a balanced path to foreign trade. Such a structural break would only have long-term positive contribution to the aggregate economy. As long as Turkey's engagement with the European markets on economic grounds and the EU on the political continues, the current level of bilateral trade with the EU-27 club will get closer to reaching its full potential, as it contributes greatly to Turkey's economic growth. The relatively less-utilized markets, however, provide a broad set of opportunities in terms of its 'value-added' in foreign trade. Given the lack of a proper structure for its trade with the EU and the current imbalances in bilateral trade with countries such as China, Turkey's elusive quest for new trade partners and regions is indispensable. Appendix Table 7. Turkey's Exports-Imports by Domestic Regions, 2002-2009 (wI # of firms)

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Endnotes 1. Halil Inalcik, "Capital Formation in the Ottoman Empire," The Journal ofEconomic History, Vol. 29, No.1 (1969), p. 102, cited in Fernand Brandel, Civilization and Capitalism 15th_18 th Century, Val.2 The Wheels afCommerce (London: Phoenix Press, 2002), p. 558.

1541 1155

Whither an Axis Shift: A Perspective from Turkey's Foreign Trade MEHMETBABACAN

2. Cited in "Turkey's Export Development," Undersecretariat for Foreign Trade Report, 2009: 3. Undersecretariat for Foreign Trade, 2009 Annual Foreign Trade Report. 4. Meliha Benli Altumsik, "Turkey: Arab Perspectives;' TESEV Foreign Policy Analysis Series 11 (May, 2010), p. 9, retrieved from http://w-w>v.tesev.org.tr/UD_OBJS/PDF/DPT/ODIYYN/ArabPerspectivesRapWeb.pd£ 5. UNCTAD and Central Bank of the Republic of Turkey, 2010. 6. Rahimullah Yusufzai, "'A 'shift of axis' by Turkey?" The News International, Peshawar, June 22, 2010, retrieved from http://www;pkcolumns.com/2010/06/22/a-shift-of-axis-by-turkey-by-r ahimullah-yusufzai/.

25. See Jeffrey A. Frankel and David Romer, "Does Trade Cause Growth?" The American Economic Review, Vol. 89, No.3 (1999), pp. 379-399. 26. Babacan, "Whither Axis Shift: A Perspective from Turkey's Foreign Trade". 27. Ahmet Davutoglu, Stratejik Derinlik (istanbul: Kiire Publications, 2001), p.,336. 28. Ibid, p. 513. 29. Ahmet Davutoglu, "Turkey's Foreign Policy Vision: An Assessment of2007," Insight Turkey, Vol. 10, No.1 (2008), p. 78. 30. Ibid, pp. 83. 31. Turkish Airlines, www.turldshairlines.com. 32. Undersecretariat for Foreign Trade, 2009 Annual Foreign Trade Report and Turkish Statisti-

7. Nub Yrlmaz, "Mahalle Baskrsr Olarak Eksen Kaymasi" USA Sabah Daily, SETA Commentary, September 22, 2010, retrieved from http://www:.setav.org/publiclHaberDetay. aspx?Dil=otr&hid=48440.

cal Institute (TurkStat). 33. Gene M. Grossman and Elhanan Helpman, Interest Groups and Trade Policy (Princeton, NJ:

8. See Nub Ydmaz, "Deger Eksenli Realist D~ Politika ve Eksen Kaymasr," Anlayis, SETA Commentary, November 2009, retrieved from http://www.setav.org/public/HaberDetay. aspx?Dil=tr&hid=5486.

Princeton University Press, 2002), pp. 173-198. 34. See Robert C. Feenstra, Advanced International Trade: Theory and Evidence (Princeton, NJ: Princeton University Press, 2004) for a comprehensive understanding on the role of trade in defin-

9. Mensur Akgiin, "Turkey: what axis shift?" Le Monde diplomatique English edition Blog Posts, July 9,2010, retrieved from http://mondediplo.comlblogs/turkey-what-axis-shift.

ing economic change.

10. Mehmet Babacan, "Whither Axis Shift: A Perspective from Turkey's Foreign Trade:' SETA Policy Report, No.4, November 2010, pp. 1-36, retrieved from http://ww-w.setav.orglUps/do')'a/53018.pdf.

35. TurkStat, 2010. 36. IMP forecast for Turkey's GDP growth in 2010 is 7.8 percent (WED 2010) while the government's projection is revised from 3.5 percent up to 6.8 percent according to the recently announced Mid-Tenn Economic Program.

11. UNCTAD World Investment Report, 2010 and China Investment Promotion Agency of Ministry of Commerce (CIPA). 12. World Trade Organization (WTO), 2009, wwwwto.org. 13. UNCTAD World Investment Report, 2010 and Bloomberg. 14. IMF World Economic Outlook (WED), October 2010, http://www.imf.orglexternallpubs/ ft!weo/20 10!02!index.htm. 15. IMF World Economic Outlook (WEO) 2010, Statistical Appendix, Table B16, p. 21. 16. IMF World Economic Outlook (WED) 2010, Statistical Appendix, Table A8, p. 191. 17. IMF World Economic Outlook (WEO) 2010, Statistical Appendix, Table A16, p. 204. 18. Sally McNamara, Ariel Cohen and James Phillips, "Countering Turkey's Strategic Drift;' The Heritage Foundation Backgrounder No. 2442, July 26, 2010, p. 14, retrieved from http://thCmedia. s3.amazonaws.com/2010/pdflbg2442.pdf. 19. McNamara et al, "Countering Turkey's Strategic Drift," p. 14. 20. For arguments of the defense of the customs union between the EU and Turkey, See Sinan Ulgen and Yiannis Zahariadis, "The Future of Turkish-EU Trade Relations: Deepening vs. Widening:' Centre for European Policy Studies and the Economics and Foreign Policy Forum, EU ~ Turkey Working Papers No.5, August 2004, p. 30. 21. Aysegul Dfnccag-Umtt Ozlale, "Export Losses in EU markets;' TEPAV Policy Note, July 2010, p. 3, http://www;tepav.org.tr/upload/files/1284637561-9.Export_Losses_in_the_EU_Market. pdf. 22. Data from the Undersecretariat for Foreign Trade, 2009. 23. Turkish Ministry of Foreign Affairs, www.mfa.gov.tr. 24. "A Note on Turkey's Free Trade Agreements," Undersecretariat for Foreign Trade, 2009. 156

I

1157

Democratization EDITORS:

T urkey-GCC Relations:

Jeffrey Haynes, London Metropolitan University, UK Gordon Crawford, University of Leeds, UK

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ccording to different estimates, between 36 and 40 percent of the world oil reserves and between 22 and 23 percent of the world natural gas reserves are under the control of six states comprising the Gulf Cooperation Council (GCe): Bahrain, Kuwait, Qatar, Saudi Arabia, Oman and UAE (Table 1). While only less than 0.6 percent of the world population, around 36 million, live in these countries in conditions above world standards, more than 20 percent of the world population, aronnd 1.6 billion, live in their immediate geographical vicinity -Jndia, Pakistan, Iran, Iraq, Jordan, Egypt, Sudan, Eritrea, Djibouti, Somalia and Yemenin conditions below world standards (Table 2). For example, GDP per capita levels among the GCC countries range from the lowest 14,031 $ in Oman to the highest 64,193 $ in Qatar.i in terms of purchasing power parity. However, in the latter group, GDP per capita levels range from 284 $ in Eritrea to 4,028 $ in Iran, in terms of purchasing power parity.

A

* Georgetown University, School of Foreign Service in Qatar, [email protected]

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Table 1: Oil and Natural Gas Reserves in the Gee

Oil Reserves (Billion Barrels) OGJ World Oil NR 0.125 NR 101.5 104 99.425 55 5.7 5.572 27.436 15.21 20 264.20 266.71 264.825 97.8 97.8 68.105 1238.89 1342.89 1184.208 BP

Bahrain Kuwait Oman Qatar Saudi Arabia UAB World

Natural Gas Reserves (Trillion Cubic Feet) BP CGAZ OGJ World Oil 3.002 3.002 3.25 NR 63.001 63.002 63.36 66.3 24.367 24.367 30 32 904.05 904.06 891.94 903.15 253.03 257.8 258,47 254 215.06 227.323 214,4 196.3 6290.63 6342.41 6254.36 6436.02

Source: Energy Information Administration, httpJlwww.eia.doe.govlemeu/international/reserves.html Notes: BP refers to BP Statistical Review of World Energy and its numbers are from year-end 2007; OGJ to Oil and Gas Journal and its numbers are from January 1, 2009: World Oil to World Oil Journal and its numbers are from year-end 2007; CGAZ to Centre International d'Information sur Ie Gaz Naturel et tous Hydrocarbures Gazeux and its numbers from January 1, 2009.

the UAE,- also have to guard their independence in the face of a much more populous Saudi Arabia.

The GCC countries rely on domestic and international patronage, diplomacy, and more importantly, the protection of a super power in order to solve their security problem

Complicating the situation further, the Gee countries are not well endowed with necessary state capacities to combat these threats. The Gulf state institutions are often paralyzed by various factors, such as tribalism, widespread nepotism and corruption, as well as the lack ofhuman capital. Hence, they are heavily dependent on expatriates in staffing state institutions. As a result, the GCe countries rely on domestic and international patronage, diplomacy, and more importantly; the protection of a super power in order to solve their security problem.

Table 2: The Gee States and its Environment

World Bahrain Kuwait Oman Qatar Saudi Arabia UAB India Pakistan Iran In,'1 Jordan Egypt Sudan

Eritrea Djibouti Somalia Yemen

Pop. (million) 6661.9

HD!

GDP (per cap.)

Life Exp.

Health

66 69 67

669 422 321

66 64 68

468 491

57 55 62

21 8 406

75.8 60.3 8

90 257 129 23

NA

0.8

39

2.9 2.7

31 56

1.1

33 59 35

21,421 42,102 14,031 64,193 15,800 38,436

134 141

879

24.7 4.4

1164.7 173.2 72.4 29.5

1,046

88

4,028

NA

NA

96 123

2,769 1,729 1,199

Pop. Below $2

1115

4.8 0.8

150 16S 155

284 997

58 64 62 50 S6 50

8.7

NA

NA

46

8

NA

22.3

140

1,006

55

38

46.6

5.9

80.1 40.4

10 75

3.5 18.4

NA NA 41.2

Source: UN Human Development Report 2009. Notes: Population numbers are in millions and from the year 2007; lIDI refers to Human Development Index; health refers the government expenditure per capita; pop. Below $2 refers to the percentage of population earning below $2 a day.

The extreme concentration of wealth in a few hands in the middle of an area heavily populated and marked by poverty constitutes the essence of the Gulf's security problems. In such an environment the neighboring states may develop strong predatory incentives, as the Iraqi invasion of Kuwait made it painfully clear. Furthermore, five smaller Gce states, -Bahrain, Kuwait, Oman, Qatar, and 160

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The literature on the issue of security in the Gulf is ever-growing. I This paper aims to contribute to this literature by addressing a question, largely neglected by both international and regional analysts. Can Turkey playa role in the Gulf's future security architecturej? I argue that Turkey can make critical contributions to security in the Gulf. As the most likely regional hegemonic power in the near future, Turkey can help build institutional mechanisms to solve potential crises, thus alleviating the security dilemma of the GCC states vis-a-vis Iraq and Iran. Under the present government, Turkey is Signaling its intention to serve such a . role. However, I argue, Turkey still lacks the necessary resources to play that role. To do so, Turkey needs to develop a numerically and technologically superior military power, form an effective international intelligence gathering system, and turn itself into a major energy transit road connecting the Gce states, Iraq and Iran with the European energy market. In the next section, I take a look at the security problem in the Gulf and discuss how Turkey can help the GCC states address it. In the final section I will present Qatar as a typical case among the GCC states to illustrate the Gulf's general security problem and the ways the GCC states tackle it. Gulf Security Architecture Security in the Gulf almost exclusively and heavily depends on the willingness of the United States to keep a strong military presence in the Gulf and wage, if necessary, costly wars against the aggressors. The problem with this situation is at least four-fold. First, the uni-polar world dominated by the US is slowly, but recognizably, giving way to a multi-polar world, which will possibly be dominated by; in addition to the US, China, Russia, India, and probably the ED. It is 161

Turkey-GCC Relations: Is There a Future?

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thus more advisable for the GCC states to keep a healthy distauce from all sides in this global shift of power. Second, although heavy dependence on the US has positive aspects to it, it also carries with it negative repercussions. In return for the precious protection afforded by the US to its allies, the US gives itself the right to define who are the friends and foes of the GCC states. Third, for one reason or another, anti-Americanism is on the rise throughout the Middle East, which may cause a crisis oflegitimacy for the political regimes in the Gulf. Finally, if the situation in Iraq aud Afghauistau further deteriorates, not only will the US' credibility be questioned, but also will the US' willingness to provide security weaken. Therefore, the present security architecture in the Gulf is unsustainable in the future aud the GCC states should seriously consider all oftheir options.

Driven mostly by Turkey's need for new markets and foreign capital, the relations took a new turn with the accession to power of the Justice and Development Party

But, what are the GCe's options? There are basically two. One option is the typical historical solution that is to depend on the protection of a superpower. If the US cannot, or is reluctant to provide security; then the choice is to invite another power, who cau aud is willing to do the job. Therefore, the underlying question becomes who is going to be that superpower? The future is more likely to be a multi-polar world, not a uni-polar one. In addition to the US, China, India, Russia, and the EU will possibly bid for superpower status. In such a world, dependence on one superpower only will not help, but complicate the security problem of the GCC states. The other option for the GCC states is to develop their own military capabilities, preferably within a common GCC defense system. This option is, according to this author's point of view, the ouly reliable option for the long-term security of the GCC states. A step in that direction has already been taken at the GCC summit in December 2009, when the GCC leaders decided to create a joint security force. However, important obstacles exist and similar attempts have failed in the past. It is highly likely that Saudi Arabia is going to dominate such a system, which is a matter of concern for the smaller Gulf States. More importantly; the Gee states have to contend with serious structural problems, such as a small and weak population base, whlch hinder the development of a joint. Strong military power that would serve as a deterrent. What role, if any, cau Turkey play in the future security architecture of the Gulf? Turkey had long been absent in the Gulf. In fact, after the Ottomau power was dismautled during the First World War, Turkey cut almost all ofher relations with the Gulf. For example, the first hlgh-level official visit between Turkey and a Gulf country, Saudi Arabia, occurred in 1966 when King Faysal visited Turkey. 162

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However, Turkey remained distaut and did not try to develop auy relations with the Gulf States. For mauy years, both Turkish and Gulf dignitaries made no high level official visits to each other. It was no until 1984, when the Turkish President, Kenau Evren, aud the Saudi Crown Prince Abdullah finally visited each other.' Driven mostly by Turkey's need for new markets and foreign capital, the relations took a new turn with the accession to power of the Justice aud Development Party. Since then, economic relations between Turkey and the Gulf have expauded; for example, the trade volume has increased four-fold from 2.1 billion US dollar in 2002 to 8 billion US dollar in 2009 (Table 3).' Table 3: Turkey-GCC Trade Relations (total volume in million $)

Saudi Arabia Kuwait Bahrain Qatar UAE Oman Total

1996

2002

2005

2009

2.138

1.348

2.850

3.462

0.210

0.165

0.251

0.395

0.014 0.013

0.035 0.026

0.060 0.132

0.138 0.375

0.234

0.558 0.031

1.880

3.566

0.020

0.043

0.122

2.632

2.165

5.220

8.059

Source: Turkish Statistics Institute, http://www.tuikgov.tr

In May 2005, both sides Signed a Memoraudum ofUnderstanding in Manama, Bahrain, to support economic cooperation, encourage exchange of technical €,Vpertise and information, improve economic relations, and initiate negotiations to establish free trade zones.' As a symbol of the strengthening relations between Turkey aud the GCC states exchauged high-level official visits. For example, King Abdullah of Saudi Arabia visited Turkey in 2006 aud 2007, aud President of Turkey, Abdullah Gill, responded with au official visit to Saudi Arabia in 2009. Truly a historical milestone in the relations, on September 2, 2008, the GCC foreign ministers declared Turkey a strategic partner.' The GCC also Signed a Memorandum of Understauding with Turkey, calling for the establishment of a comprehensive and regular consultation mechanism on political, economic, defense, security and cultural matters. In this vein both sides agree to hold a joint annual meeting of foreign ministers. In the words of the Qatari prime minister, Sheikh Hamad bin [asem alThaui, by then the chairmau of the GCC Ministerial Council, "the signing ofthe memo is a step on the way to strategic relations:" The first joint ministerial meeting was held in Istanbul on July 8, 2009. As specified in the joint statement of the meeting, the sides decided to improve cooperation in
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The role of a peace broker or a third party arbiter of conflicts, preferably in an institutionalized setting, would be most befitting of Turkey's goals in the region

limited to transportation infrastructure, . investment, food security and tourism:' seek new prospects of cooperation "in the field of energy, including oil, gas, renewable energy and mineral resources:' intensify «efforts with a view to conclude the FTA as soon as possible:' coordinate the activities of security authorities "in the fields of countering terrorism, sources of terror funding, money laundering, drug trafficking, and organized crime, as well as training at the Ankara-based Turkish International Academy against Drugs and Organized Crime;' establish «mechanisms to increase cooperation among institutions of research and higher education, national archives and cultural institutions," and "promote and facilitate educational and cultural exchange programs as well as exchanges of young diplomats for language and on-the-job training:' In the joint statement both sides also called for greater cooperation and coordination in military and defense domains and reiterated their support to each other's position on international problems, including issues ranging from the Iran nuclear program to the Israeli-Palestinian conflict. 8

The recent developments in the relations between Turkey and the GCC thus testify the growing recognition of the role Turkey can potentially play in the future Gulf security architecture. But, what exactly is, or should be, that role? Any plausible answer to this question should ultimately rest on a future projection on the status of Turkey in the global distribution of power. According to the 2009 statistics, Turkey has a population of 72 million with a median age of 28.8.' According to the IMF statistics, Turkey's GDP was around 880 billion dollars in 2009; calculations Were based on purchasing-power-parity. Turkey has become the 15th largest economy in the world. With a young population raised in a society where militaristic values are dominant, Turkey has no shortage of manpower to conscript for its armed forces. It still maintains the largest army in the EU, the second largest in NATO, and one of the largest in the world. However, Turkey has a thriving defense industry, which also started to make some headway internationally, participating, for example, at the Doha International Maritime Defense Exhibition and Conference (DIMDEX) in 2010 with 16 companies." Even though more than 200 firms and 1,000 sub-contractors with more than 50,000 people work in the domestic defense industry, Turkey is not a self-sufficient country in terms ofmilitary technologies, either directly importing high-tech military weapons or, producing them in coordination with other countries, such as, the UK, the EU, Germany, Israel, Italy, South Korea, and China. Reflecting her weakness in 1641

Turkey-GCC Relations:Is Therea Future?

military technology, Turkey was the fourth importer of arms, but the 28" largest exporter in 2007. 11 . Based on these basic facts, one can safely assume that Turkey is going to be a formidable regional power in the near future. As such, it can playa very critical role in the future Gulf security architecture. That role is not, and should not be, a typical security provider in an Ottoman, or British or American "way". First, it is beyond the reach of Turkey's power. Second, it can harm Turkey's equally important relations with the other countries in the region. For example, Turkey has good relations with Iran, and has to improve them further. In fact, in many aspects, Iran is even more critical to Turkey than the other GeC states. Iran has a huge domestic market with a population ofmore than 70 million, and its economy is still highly protected. Still, in 2009, for example, Iran was the fourteenth largest importer of Turkish goods. Ouly the United Arab Emirates, among the GCC states, imported more than Iran in that year. Requiring no visa from Iranians, Turkey attracts hundreds ofthousands ofIranian tourists every year. Strategically, Iran is critical to Turkey for it is the most convenient transit road to the Central Asian 'Iurkic Republics. Even more importantly, perhaps, Iran is not only a major gas and oil producer, but also sits between Turkey and Turkmenistan, another major gas producer. Hence, Iran's participation is critical to the success of the Nabucco natural gas pipeline project, which will turn Turkey into a major energy transit road. In addition, Iran's collaboration is essential for Turkey in combating Kurdish separatist movements. Having a thriving industry and service sector, Turkey is aiming to expand its economic relations in all directions from Far East Asia to Latin America, from Russia to Africa. To do so, Turkey has to penetrate markets, which are already dominated by industrialized and industrializing countries. Hence, it cannot afford to harm its relations with any state, including those surrounding the GCe. In fact, this is exactly the reason why Turkey can playa constructive role in the future Gulf security architecture. The role of a peace broker or a third party arbiter of conflicts, preferably in an institutionalized setting, would be most befitting of Turkey's goals in the region. The effectiveness of that role, however, ultimately depends on how much Turkey can contribute to the countries concerned with the Gulf security. One possible way Turkey can contribute is to serve as a conduit between the GCC and NATO, hence, Europeans. In fact, upon mainly Turkey's initiative, NATO declared its intention to develop further ties with the Middle East states in January 2004, an initiative known as the Istanbul Cooperation (ICI)." Especially 1165

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Close cooperation with the NATO, with greater .

mvolvement by Turkey, could steer the GCC states to develop a common defense system

Turkey-GCC Relations: Is There a Future?

smaller states in the Gulf, such as Kuwait, Bahrain, and Qatar showed an immediate enthusiasm, joining the initiative in 2004 and 2005. NATO's security provision in the Gulf has an important advantage. It brings "all the advantages

of maintaining existing military-to-military ties with the US, while at the same time concealing this reality by broadening the scope of bilaterai Gulf ties to include the European component of the alliance in a systematic waY:'13 However, NATO's military power really depends on the US' military power, without which NATO cannot credibly provide security in the Gulf. Hence, reliance on NATO does not solve the original security problem, which stems from the long-term unreliability of the US. Turkey should not be so dependent on NATO for its present security concerns. Moreover, Turkey should not only rely on NATO when dealing 'With Russia, either in terms of cooperation or in the case of potential conflicts. The same also holds true for the GCC states, whose interests overlap more 'With those ofRussia than those ofEurope since both Gce states and Russia are major oil and natural gas providers. Thus, energy ties Turkey and GCC states to Russia and Central Asia. However, NATO can deliver critical short-to-medium term benefits to the future Gulf security architecture by helping them develop their own military capabilities within a common defense system. In fact, the Istanbullnitiative explicitly suggests this type of cooperation in «military-to-military cooperation to contribute to interoperability through participation in selected military exercises and related education and training activities that could improve the ability of participating countries' forces to operate with those of the Alliance in contributing to NATO-led operations consistent with the UN Charter." The initiative also invites "interested countries to observe and/or participate in selected NATO/PfP exercise activities as appropriate and provided that the necessary arrangements are in place:' and encourages "additional participation by interested countries in NATO-led peace-support operations on a case-by-case basis:'14Close cooperation with the NATO, with greater involvement by Turkey, could steer the GCC states to develop a common defense system. Turkey can also help GCC states in their state building projects by sharing its valuable historical experience. The Ottoman Empire started modern state building in the early 19" century as Mahmud II (1808-1839) set out to overcome two major obstacles within the Empire, which impeded modern state building: the 166

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powerful notable families and the Janissaries. However, the Ottoman state building efforts fell short of expanding modern state structure into its Arab territories. Hence, when the Ottoman Empire dissolved, notable families continued to hold onto power in the Arab territories, a situation that Albert Romani called 'politics of notables." Therefore, among all successor states to the Ottoman Empire, Turkey stands unique in inheriting the former imperial state structure. During the Republican period, Turkey continued to develop its state institutions, which are now possibly the most effective ill the entire Middle East in delivering basic state services. In addition to its own efforts, the Turkish Armed Forces (TAF) has long enjoyed close collaboration with the US, Israel, and NATO, becoming one of the most efficient armed forces in the world." The TAF not only sends its officers corps abroad for training, but also attracts foreign officers for military training, reflecting its efficiency. So far, more than 20,000 military officers from 50 different countries have been trained through the TAF institutions." In line with the development of the modern state, Turkey also managed to create one nation out of an ethnically heterogeneous population with only some portion of the Kurdish population refusing Turkish national identity. Turkey can share its valuable historical experience with the GeC states and help them to train their bureaucrats and military personnel and cooperate in solving matters of common interest. I believe that there is a strong demand for more Turkish involvement in the regions security architecture. To illustrate this point, we should examine a typical case among the GCC states, Qatar. The Gulf Security Problem and the Gulf Response: The Case of Qatar Qatar sits on 15 to 27 billion barrels of oil reserves and around 900 trillion cubic feet of natural gas reserves, enough to turn it into an extremely wealthy country. In terms of GDP per capita purchasing power parity, Qatar arrives at the top of the list of the wealthiest countries in the world since 2004. But it is a small country with an area of 11,512 square kilometers, populated by a mere 1.2 million people. From such a small population, Qatar can muster merely around 12,000 men to defend its small, but richly endowed territories. Such a tiny force can perhaps deter other smaller GeC states, such as, Kuwait, Bahrain, and the United Arab Emirates, but it cannot be effective in deterring more populous neighbors, such as, Saudi Arabia, Iraq, Iran, or Pakistan. To compensate for this unfavorable imbalance in military power, Qatar has no option, but to rely on the protection of a super power against its neighbors. In fact, this has been Qatar's historical solution to its security problem. Against the encroaching Saudi state in the second half ofthe 19" century and the first half ofthe 167

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20· century, Qatar first relied on the Ottoman Empire and then on Britain. After 1971, the US assnmed the role that Britain was no longer willing to play. Qatar, thus, entered under the US' protective umbrella. The relations between Qatar and the US took a new turn in the 1990s. In 1992, Qatar signed a Defense CooperationAgreement with the US, with which the US obtained access to Qatari bases. In 1996, Qatar spent more than $ 1 billion to build Al-Udeld airbase even though it didnot even have its own an air force. The objective was to attract the U.S military to Qatar. The opportunity arose after the terrorist attacks of September 11, 2001. In 2003,the US moved the US Combat Air Operations Center in the Middle East from Saudi Arabia to Qatar's Al-Udeid Airbase. The US also constructed the world'slargest pre-positioning facility in Qatar, Al Sayliyah army base." With these two bases, Qatar simply became indispensable to the US military and, in return, got the precious effective military protection it was seeking against a major militaryattackon its territories.

II

There is another dimension to the security problem Qatar and other GCC countries face. The GCC states are late-late modernizers; as a result, they have always lacked not only manpower numerically, but also in quality. In this regard, Qatar is a typical case among the GCC states. For example, in the late 1990s, Qatar launched its first law school, whose graduates could be employed in the state bureaucracy,the College of Shari a and Islamic Studies. But it was not until 2004/2005 did the College of Law became an independent college." Therefore, since the cqlonial and early independence period, the GCC states have imported in large numbers educated people from neighboring Arab states, mostly, from Egypt, Jordan: and Syria, to fill the state institutions. Like other GCC countries, Qatar has extremely stringent citizenship laws. Therefore, there are many state officials who are not even citizens, mostly Arabs, but also Pakistanis. They occupy positions at all levels in almost all state institutions from the mosques and schools to the police and the armed forces. Not only are these Arab-Pakistani state officials denied citizenship for a long period oftime, but also they are generally paid less than the Qataris and the Westerners occupying the same positions. It will follow suit that the state services are not going to be as effective as they could be. Therefore, Qatar, like other GCC countries, does not have the necessary state capacity to combat whatever security problems it may face, whether domestic or international. In short, Qatar faces serious security problems. Aware of this, Qatar has been very pro-active in taking critical steps in solving its security problems. The US military bases gave Qatar the security, time, and opportunity to initiate a major transformation, which can aptly be described as state building. 168

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Turkey-GCC Relations: Is There a Future'?

Qatar, like other GCC states, is in the middie of building a stronger state, an important component of which has been the "Oatarlzation" of the workforce in public institutions. This is an area where Qatar has already come a long way. In 1991, the expatriates made up 56.1 per cent of the workforce employed in the government sector. By 2001, the expatriates' share dropped to 33.9 per cent of the total workforce in the government sector. In the meantime, the number of employees in the government sector decreased from 37,028 to 34,380,20 indicating that Qatar either released or did not replace a significant number of expatriates working in the government sector. If not supported by improvements in the quality of the workforce, this progress in mere quantity will not ameliorate the overall efficiency of the Qatar's State institutions. On the contrary, it may even lead to their deterioration. Aware ofthis paradox, Qatar is also alming at a qualitative progress. Qatar puts huge sums of money in education. Sheikha Mozahs grand 'education city' project brings quality programs of a few select US universities to Qatar. For example, Northwestern University has a journalism program in Education City, Cornell University a medicine program, Texas A & M an engineering program, Virginia Commonwealth a design program, and Carnegie-Mellon a business administration program. Qatar's one and only national university, Qatar University, is also richly endowed by the state of Qatar, and is going through a major reformation. Both Education City and Qatar University also have programs to train the future : bureaucrats ofthe State ofQatar. Education City brought Georgetown University's renowned School of Foreign Service to Qatar in 2005, which graduated its first class in 2009. In 2006, Qatar Uuiversity also initiated its own program in International Affairs, turned it into a department under the College of Arts and Sciences in 2009, which is about to graduate its first class in 2010. Even though Qatar made some progress in the "Qatarization" of its workforce in public institutions, there is still a long way to go. With so few nnmbers ofgraduates, Georgetown SFS-Q and Qatar University Department of International Affairs produce every year; it will require decades to fill the state institutions with appropriately trained bureaucrats. More importantly, existing educational institutions are only sufficient for training entry-level bureaucratic posts. For higher-level bureaucratic training Qatar has to invest even more in intra-ministerial training, an important part of which is to instill professionalism, public service ethics, and an esprit de corps among Qatar's public officials. For Qatar this will be a challenge to achieve, as is the case in many other places in the world, Qatar will have to struggle against over-reliance on foreign workers for a long period of time [169

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Turkey-GCC Relations: Is There a Future'? BtROL BN;lKAN

and a paternalistic view ofthe state that have created a bureaucratic culture. All of these factors are inimical to developing an efficient state apparatus.

State building is essential for the sustainability of political order and stability in Qatar. The successful implementation of which is critically dependent on the unhindered flow of oil and natural gas to the world market. This is in turn dependent on the ability and willingness of the US to provide military security. Hence, the security question of Qatar and of the Gulf in a post- US hegemonic world is truly a conundrum. Aware of this problem, the GCC states are not just idly waiting to see the way their fate unfolds. They are in fact quite pro-active, working hard to have an impact on the course of their own history. In this vein, they have engaged in, what 1 call, international alliance building. In this regard, Qatar is a good example. Looking at the course of Qatar's foreign policy, one will not fail to notice that Qatar is, in fact, establishing extensive international links with almost all major regional and international powers. Qatar's foreign policy makers, especially four figures at the top of the Qatari political system, the Emir of Qatar, Sheikh Hamad bin Khalifa al Thani, the Emir's wife, Sheikha Mozah bint Nasser al Missnad, the Crown Prince, Sheikh Tarnim bin Hamad al 'Ihanj, and the Prime Minister, Sheikh Hamad bin ]assim al Thani, travel extensively throughout the world signing trade and commercial deals with countries in different corners of the world. Even a cursory reading of Qatari newspapers' accounts of official visits of these four figures will show that Qatar is trying to construct an extensive web of relations with almost all important future potential powers of the world, such as: China, India, Russia, Brazil, Japan, European Union, Iran, and Turkey. For example,from April 2009 to March 2010 alone, the Emir of Qatar, Sheikh Hamad, visited Brazil, Argentina, Venezuela, Costa Rica, Turkey (twice), Iran, Saudi Arabia (twice), Italy, the USA, France, Indonesia, Malaysia and Singapore, the UK, Belarus, Bulgaria, Portugal, and Crotia." In all of these visits and others undertaken by the Heir Apparent and the Prime Minister, Qatar signs dozens of trade agreements with the host countries. Qatar is, in a way;weaving a web of interests centered on Qatar and extending to other parts of the world. Turkey is a critical political and international player in this broad international alliance building. Turkey has already set out to develop good relations with all sides concerned with the Gulf's security. Utilizing her relations Turkey can help institute a high-level dialogue mechanism, which was in fact, as discussed already, established between Turkey and the GCC states. That mechanism should expand to include all sides of the Gulf security system, but involving specifically Iraq and 170

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Iran. And this is within Turkey's reach. Some GCC states, especially Qatar and Kuwait, are enthusiastic to enter into a dialogue with Iran. In an historical move, the Emir of Qatar, Sheikh Hamad, for example, extended an invitation to the President of Iran, Mahmoud Ahmedinejad, to attend the GeC summit held in Doha in December 2007, which was warmly received by the Iranian side. Qatar, in fact, has long been interested in developing good relations with Iran. The Emir of Qatar, Sheikh Hamad, for example, visited Iran five times in the last decade, the first time was in July 2000.22 The relations have since then developed to the point that the Iranian Parliament speaker, Ali Larijani, described Qatar as a strategic partner during his visit to Qatar in July 2009. During the same visit, the Emir said, "Iran is always standing behind Arabs and the people ofPalestine, but some want to make minds turn against the country while we have no problem with it. Iran is always our friend and we won't allow any ill-will person to create problems between llS."23 Qatar-Iran relations can in fact be a base upon which a broader Gulf dialogue mechanism can be built with Turkey's initiative to expand the already existing one between Turkey and the GCC. Such a dialogue mechanism can help the sides alleviate the security problem in the Gulf, build confidence and trust among all the sides. Conclnsion This interactive security structure cannot survive alone if not supported by broader economic, educational, and cultural cooperation. It is important, for example, that Turkey becomes a energy transit corridor between the GCC states, Iran and Iraq on the one hand and Europe on the other. All sides should work to establish free trade zones, abolish trade barriers, encourage student and faculty exchanges, support common research projects, organize joint sport activities, support intra-regional tourism and so forth. Such an inter-dependent and interconnected region will not only bring benefits to all sides, for each state has its own strategic and comparative advantage to bring to the table, but also, and more importantly, increase the cost of conflict in the region.

Finally, it should be emphasized that this scheme does not suggest in any way that the sides should aspire to create a political union, which, I think, is impractical and simply against historical trends. It also does not advise in anyway that the sides should not continue to invest in their military power. The Gee states should definitely institute a common defense system and develop their own military capabilities. Hence, no other power can have an absolute upper hand over regional or international relations. Any arrangement that does not treat each and every state respectfully and equally will not last long

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Endnotes

Turkey-Gee Relations: Is There a Future?

12. The official statement of NATO regarding Istanbul initiative can be found at http://W'WW. nato.int/docu/comm/2004!06-istanbul/docu-cooperation.htm.

• The author thanks Steve Wright, Ibrahim Arafat, Ozgur Pala and the participants in the Gulf Research Meeting 2010 held in Cambridge, UK, for constructive comments.

13. John Bruni, "NATO: The Gulf's Last, Best Hope for Peace and Stability?" The Emirates Center for Strategic Studies and Research (January, 2:008).

1. In a fact quite a number of policy papers address this problem. Just to name a few examples, see Andrew Rathmell, Theodore Karasik and David Gompert, "ANew Persian Gulf Security System," Rand Issue Paper, (2003), retrieved October 2, 2010, from http://www.rand.org/pubs/issucpapers/ IP248IIP248.pdf; Sherif Hamdy and Jennifer Maceyko, "The Future of Persian Gulf Security: Alternatives for the 21't Century;" The Stanley Foundation Policy Dialogue Brief, (2005), retrieved October 2,2010, from http://vps.stanleyfoundation.orgireports!pdb05pg.pdf;JudithS. Yaphe, "Challenges to Persian Gulf Security: How should the United States Respond?" Strategic Forum, No.237, (November, 2008), pp. 1-8; Kristian Ulrichsen, "Gulf Security: Changing Internal and External Dynamics;' Kuwait Programme on Development, Governance and Globalization in the Gulf States, Working Paper, (May, 2009), retrieved October 2, 2010, from http://www.lse.ac.uklcollections/LSEKP/documents/Ulrichsen%20report%2012.5.09.pdf.

14. See Article 7.b of the Initiative at http://www.nato.int/docu/comm/2004/06-istanbul/docucooperation.htm

2. As exceptions in the field, see Bulent Aras, "Turkey and the Gec: An Emerging Relationship," Middle East Policy, Vol. XII, No.4 (Winter, 2005), pp.89-97; Lenore G. Martin, "Turkey and Gulf Cooperation Council Security;' Turkish Politics, Vol. 10, No.1 (March, 2009), pp.75-93. There are also a few studies in Turkish addressing the question. See, Veysel Ayhan, "Tlirkiye-Korfez i~birligi Konseyi Iliskilerinde Yeni Bir Donem: Yiiksek Duzeyli Stratejik Diyalog," Ortadogu Analiz, Vol. 1, No. 7-8, (July-August, 2009), pp.114-123; Ali Oguz Dirioz, "Ttirkiye-Korfez 4birligi Konseyi Iltskflerf," Ortadogu Analiz, Vol 1, No.6 (June, 2009), pp.77-81. 3. Muhittin Ataman, "Ttirkiye-Suudi Arabistan Iliskileri: Temkinli lliskilerden Cok- Tarafu Birliktelige," Crtadogu Analiz, Vo!.I, No.9 (September, 2009), pp.72-81. 4. For more on the economic relations between Turkey and the GCC, see Nennina Biberavic, "Turkey and the GCC States: A New Era of Bilateral Economic Relations;' Gulf Monitor Issue, 11 (October, 2008), pp.I5-21. 5. T.e. Basbakanhk Kanun Tasansr, "Tiirkiye Cumhuriyeti ve Korfez Arap Ulkeleri i~birligi Konseyi Dyesi Ulkeler Arasmda Ekonomik lsbirligine iliskin Cerceve Anlasma," (October 27, 2005), retrived October 2, 2010 from http://wwwZ.tbmm.gov.tr/d23/l/1-0322.pd£ 6. Mariam Al Hakeem, "GCC Names Turkey First Strategic Partner Outside the Gulf;' Gulfnews. com, September 3, 2008, retrived October 2, 2010 fromhttp://gulfnews.com/news!gulf/uae/genera1l gee-names-turkey-first -strategtc-partner-outside-the-gulf-I.12963I.

15. Albert H. Hourani, "Ottoman Reform and the Politics of Notables;' in Albert H. Hourani, Philip S. Khoury, and Mary e. Wilson, (ede), The Modern Middle East: A Reader (London: LB. Tauris Publishers, 2003). 16. According to GlobalFirePower.com, Turkey has the best 10m army in the world, ranked after the US, China, Russia, India, the UK, France, Germany, Brazil and Japan, retrieved October 4, 20 10, from http://www.globalpower.comlcountries-listing.asp. 17. According to the Website of The Turkish General Staff, 20,613 military guest personnel have so far attended TAF education and training programs. In 2008-2009, for example, 1,017 guest personnel from 25 countries would get their training in TAP institutions, retrieved October 4, 2010 from http://www.tsk.tr!4_ULUSLARARASCILISKILER/4_7_TSK_Askeri_Egitim_ve_Isbirligi_ Faaliyetleri/konular!Misafir_Askeri_PersoneCBilgileri.htm. 18. Jeremy M. Sharp, Qatar: Background and US. Relations, CRS Report for Congress (2004), retrieved October 2, 2010, from http://fpc.state.gov/documents/organization/33741.pdf. 19. See a short history of the College of Law, retrieved October 2, 2010 from http://www.qu.edu. qallaw/about_lawc.php. 20. Cited in Maitha Al Shamsi, "The Imbalance ill the Population Structure and its Impact on the States of the Region," inArabian GulfSecurity Internal and External Challenges, (Abu Dhabi: The Emirates Center for Strategic Studies and Research, 2008), pA09. 21. The list of all visits undertaken by the Emir can be found at the website of Amiri Diwan retrieved October 2, 2010 from http://www.diwan.gov.qa/english/main_pagcenglish.htm. 22. The visits of Sheikh Hamad can be found at http://www.diwan.gov.qa. 23. Cited in Ariel Farrar-Wellman, "Qatar-Iran Foreign Relations," American Enterprise Institute Iran Tracker, (February 23,2010), retrieved October 4, 2010, from http://www.irantracker.org/ foreign-relations/qatar-iran-foreign-re1ations.

7. ibid. 8. The full text of the joint statement can be found at the Ministry of Foreign Affairs of Turkey at http://www.mfa.gov.tr, retrived October 4, 2010, from http://www.mfa.gov.tr/joint-statement-of-the-joint-ministerial-meeting-of- the-gee-turkey-hlgh-level-strategic-dlalogue-istanbul-_ ~ turkey_ 8-july-2009.en.mfa 9. Tiirkiye Istatistik Enstitiisii, "Adrese Dayah Nufus Kayrt Sistemi Nufus Sayirm Sonuclan, 2009," Haber Bidteni; No. 15, January 25,2010. 10. "Turkey Makes Presence Felt at DIMDEX 2010:' The Peninsula Daily, January 4,2010. 11. For a good analysis of the Turkish defense industry, see Andrew McGregor, "Arming for Asymmetric Warfare: Turkey's Arms Industry in the 21st Century," The Jamestown Foundation (June 2008), retrieved October 4, 2010 from http://WW"VY.jamestown.orgiuploads/mediaiJamestownMcGregorTurkishArmsIndustry.pdf.

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Policy Briefs Policy analyses and recommendations on regional and international issues Recent Titles

Global Transformations and the MENA: A Comparative Political Economy Analysis

Turkey's Role inSecurity of Oil and Gas Supplies Kosovo and Turkey: What Lies Ahead? Recent Disinflation in Turkey Time to Promote Sovereignty in Gaza Constitutional Referendum in Turkey

Turkey and Bosnia-Herzegovina: A Future Reflecting on the Past Contextualizing Turkey's Darfur Policy

Kthcdar oqlu's CHP: What Lies Ahead? Turkey and Israel in the Aftermath of the Flotilla Crisis Turkey and China: Seeking a Sustainable Partnership

Turkey's "Soft Power" Strategy: A New Vision for a Multi-Polar World Turkish-Iranian Relations: A Wider Perspective Turkey and the Cyprus Dispute: Pitfalls and Opportunities Turkish-Armenian Relations: Will Football Diplomacy Work?

SADIKUNAY*

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To download SETA policy briefs, visit our website at wwwsetavorg To subscribe to SETA mulling list, please send a blank e-mail to infocpsetav.org with ~SUBSCRIBE~ in the subject line.

lthough the geographic entity described, in a rather Eurocentric manner, as the "Middle East" aswell as the adjacent North Africa have been historically located at the epicenter of tectonic shifts and hegemonic struggles in world politics, the exceptional importance attached to these critical regions has generally resulted from distributional conflicts over strategic natural resources and gee-strategic considerations. In the same vein, it seems hardly possible to claim that the Middle East and North Africa, or MENA area to use the conventional shorthand, has traditionally been a fertile ground in terms of the emergence of exceptional success stories with respect to accomplishments such as rapid and sustained industrialization, structural transformation, as well as extensive integration with global trade, investment and finance networks. This negative state of affairs has been triggered by the destructive and destabilizing remnants ofthe colonial legacy, aggravated by the prevalence of authoritarian and autocratic gover-

A

... Department of Humanities and SocialSciences, Yildiz Technical University, sadikunayeohotmail.com

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SADIKUNAY

nance practices as well as the resilience of particularistic distributional networks, jointly constituting the groundwork for an antidemocratic and unproductive regional political economy. Consequently, despite various national developmental performances and sporadic successes, not a single case could be identified in the region whereby a world-class industrial/technological transformation and'socioeconomic development project was completed by mobilizing endogenous dynamics and respecting democratic consolidation. 1 Both during and in the aftermath of the Cold War, the MENA was singled out as an international «intensive conflict zone" wherein occasional political and military interventions by major global powers were conceived as both normal and inevitable. To be forthright, dnring the early years of the post-Cold War era, there emerged serious concerns among the autocratic leaders and regimes in the region that the gradual erosion of their gee-strategic importance in the unipolar global order would trigger a process ofmarginalization in the eyes ofmajor global powers. However, it soon became crystal clear that these concerns were premature and unwarranted, and the MENA region continued to be the focal point of Great Power meddling under constantly changing international regimes. Both the new design ofthe international security architectnre in the aftermath ofthe September 11 attacks and the ideologically-motivated initiatives of the neo-conservatives in the US administration, such as the "global war against terrorism" and the "greater Middle East project;' practically rendered the US a MENA country through the invasion of Iraq in 2003. This course ofevents also galvanized the strategic importance of this critical region in terms of global balance of power calculations and energy projections. Analytically, on the other hand, it was swiftly understood that a series of pragmatic and superficial frameworks designed to unravel the natnre of post-Cold War systemic change possessed marginal explanatory power regarding the broader regional transformation trajectory of the MENA.2 In effect, the abrupt end of the Cold War, the formation of a novel and multipolar politico-economic order, the intensification of global power interventions due to concerns of energy and geo-strategy, and the increasing attention of European countries on the region as their "Mexico" in view of relatively low production costs triggered fundamentally different transformation dynamics. In stark contrast to exceedingly reductionist, generalizing and often patronizing accounts ofmainstream theorists, multifaceted and non-synchronized trends oftransformation continued to advance in political, economic and socio-cultural spheres in the wake of globalizing pressures. In the new era, the conventional separation between international and domestic spheres 176

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Global Transfonnations and the MENA: A Comparative Political Economy Analysis

of activity became blurred in the MENA, as elsewhere, leading some analysts to coin terms such as "intermestics" whereby state-centered geopolitics was accompanied by the complex geo-economics of global integration.' In this study, the main factors that contributed to the making of the modern political economy of the Middle East will be evaluated through a historically and theoretically informed perspective. Moreover, diverse national responses given in the region to the implementation ofneoliberal transformation packages via standard "Washington" and nuanced "post-Washington Consensus" principles will be highlighted. Instead of presenting detailed empirical data on peculiar structnral transformation experiments, underlying factors of continuity and change in the regional political economy will be explored in comparison to other developing regions. In this context, domestic parameters of profound change including the use of oil as a strategic resource will be critically explained in the context of the renowned rentier state thesis and multifaceted effects of global economic integration. Finally, the impact of perceptive dissonance towards global power interventions in the region on region-wide resistance to various forms of political and economic globalization is highlighted, along with broad conclusions towards the future prospects of global integration with respect to the progress of economic liberalization and democratic consolidation in the MENA.

Making of the Modern Middle Eastern Political Economy According to conventional wisdom, international political economy analyses are expected to form causal links between political factors such as states, conflict zones, and political ideologies and economic factors such as production, trade, investment, finance, and technological change. Historically; the MENA region represents a distinct geographical entity in which complex political and economic trends have been intermingled like no other region in the world; therefore, it has been described as the "kingdom ofinternational political economy:' 4 The strategy ofimperialist expansion initiated by the European powers ofthe 17'" century with the aim ofrestructuring the non-Western world on the basis ofgeo-strategic concerns and economic interests predominantly concentrated on natural resources, raw materials, and trade routes controlled by the Ottoman Empire. In this critical process conditioned by expansionist military and economic strategies, two milestone events increased the attraction of the MENA region for imperialist projects: namely, the opening of the Suez Canal in 1869 and the switch by major fleets to oil-powered warships on the eve ofthe First World War. Since then, the discovery of substantial oil reserves in many MENA countries tremendously increased the geo-economic importance of the region in the eyes of major global powers, and 177

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Starting from successive waves of "defensive modernization;' politico-bureaucratic circles systematically constituted dynamics of controlled integration with the world economy that continued with varying paces in compartmentalized sectors

Global Transformations and the MENA: A Comparative Political Economy Analysis

.intensified hegemonic struggles aimed at the uninterrupted control of these reserves."

Retrospectively, it seems possible to contend that the root causes of the socalled "Middle Eastern question" conceived as a chronic problem in Western circles largely derived from the problemridden formative phases of entrenched politico-economic relations in the MENA, rather than purely political disagreements on protracted conflicts. Most ofthe nation states formed in the region have been in close contact/confrontation "With European modernity/imperialism for two centuries since the invasion of Egypt in 1798. Moreover, constant politicoeconomic manipulations exerted on these states were manifested into peripheral and "differential models of integration" with the global political economy" Gradual fragmentation ofthe MENA region into small and medium-sized nation states not only facilitated intensified competition among the newly emerging political elites for scarce resources such as oil and water, but also facilitated great power meddling on relatively smaller political units. Therefore, it was not surprising to observe that only a limited number of MENA countries, i.e. Turkey and Iran, were able to initiate comprehensive projects ofpolitical and economic modernization aimed at state formation and industrialization since the 1930s. Furthermore, besides partially successful structural transformation experiments in Egypt and Algeria, there were very few instances in which concrete steps were taken to restructure predominantly agrarian social and economic structures alongside the institutionalization of democratic values.

Unlike Latin America, India or Indochina, most of the MENA countries were not historically equipped with agricnltural production links that directly fed into European markets, thus commercialization of agricultural sectors through global integration and rural modernization via external demand have not been possible. 7 In this context, the impact of colonial powers such as France and Great Britain in the transformation of institutional, organizational and military mechanisms towards modernization and global integration of the MENA states remained quite marginal compared to other regions that have gone through colonial periods. Still, the main factors that prevented the formation of comprehensive development projects in the MENA based on a wide social basis were mainly politico-

1781

economic in nature and derived from the dialectical colonial legacy, rather than simply the insufficiency of economic factors. Political elites during the colonial and post-colonial periods successfully fragmented national political economies in line with their prevailing political agendas and distributional coalitions. Starting from successive waves of "defensive modernization;' politico-bureaucratic circles systematically constituted dynamics of controlled integration with the world economy that continued with varying paces in compartmentalized sectors." In the post-colonial period it has been quite a widespread practice for local political elites to adopt the organizational models and socioeconomic development paradigms of major global powers, while developing discourses of national autonomy and independence to preserve domestic social balances and distributional coalitions. Given the fact that European colonial powers transferred particular forms of capitalism into the region, path-dependence of economic liberalization experiments in the later periods was pretty much predictable. The Anglo-Saxon model in which investment finance in competitive stock and financial markets is preferred to the organizing role of the banking sector' seemed historically prevalent in Lebanon and the Gulf countries, which also historically have had relatively stronger financial markets. On the other hand, the Rhineland model organized around the central coordinating role of large-scale banks'? has been conventionally adopted by sizeable regional actors that experienced occasional difficulties to raise investment finance such as Turkey and Egypt. Finally, the third model concerns the French tradition of state-led development, or etatisme, which assumes the technocratic management of economic resources in the absence of adequate private capital accumulation and entrepreneurial know-how. The "etatist' tradition expectedly appreciates a much larger and proactive role for the state in managing economic affairs, while assigning a crucial strategic role to public banks in providing resources of industrial finance compared to the Rhineland model. Historically, etatisme has been extensively implemented by various political regimes in the MENA thanks to its facilitating impact on the maintenance of autocratic political control. Besides clear examples of Israel and Syria, Turkey, Egypt, and Tunisia have periodically resorted to etdtisme under various policy regimes and development strategies.'? Assessed purely from the perspective of political organization, following the colonial predicament experienced most deeply by North African states, three political models seem to have been crystallized in the region: a) Praetorian Republics, which include states with a strong nationalist/anti-imperialist ideology

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The existence of oil has deeply affected the patterns of interaction between the MENA and other regional entities, while also triggering intra-regional fragmentation and polarization based on the uneven distribution of oil wealth

and totalitarian security apparatuses' such as Egypt, Libya, Algeria, (pre-war) Iraq, Syria, Sudan, Tunisia, and Yemen; b) Monarchies based on hereditary rule that seek to maintain cordial relations with Western powers such as Saudi Arabia, Morocco, Jordan, Bahrain, Qatar, UAB, Kuwait, and Oman; c) Democratic regimes that claim allegiance to some form of functioning democracy such as Turkey; Israel, Iran, and Lebanon (despite various shortcomings of implementation in each case, in terms of minority rights and fundamental human right and liberties).

Generally speaking, monarchical regimes have largely maintained their traditional capitalistic legacies and the positions of prevailing socioeconomic elites during the transitions from colonialism to the Cold War environment and globalization. Moreover, the democracies in the MENA region, placed at various levels of democratic deepening, adopted a more nuanced and selective approach towards the transformation of their agricultural. commercial. and industrial-entrepreneurial classes in line with prevailing conjunctural political atmospheres. However. praetorian republics based upon nationalist and military-authoritarian regimes proved more stubborn in their quest to replace ancient economic interests with new and politically-approved bourgeoisies via mechanisms ofadministrative and legal pressure." The interventionist tendencies of these states facilitated the formation of structural dynamics that approximated to various forms of political capitalism with a virtual disregard for local entrepreneurial cultures and business groups; while at the same time decreasing their capacity to implement dynamic and rational development strategies. Therefore, waves of economic reform and liberalization aimed at the institntion of export promotion regimes in the MENA frequently ended up in acute failure. Moreover. the rentier state structures that emerged in oil-rich MENA states let to a complex intermingling of economic and political interests, and triggered difficulties in the management of monetary, fiscal, and social policies. Thereby, eroding key sources of political legitimacy.

Oil, Development and Democracy: A Problematic Relationship It is impossible to make sound observations regarding the transformation trajectory of the Middle Eastern political economy without paying due attention to the impact of oil as a strategically important natural resource; The existence of oil 180

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Global Transformations and the MENA: A Comparative Political Economy Analysis

has deeply affected the patterns of interParticularly in the early action between the MENA and other reaftermath of the Second World gional entities as well as with major g1obW th t 1 f . il al powers, while also triggering intraar, e con ro 0 ma)o.r 0 regional fragmentation and polarization reserves began to constitute based on the uneven distribution of oil one of the main geo-economic wealth. Moreover, oil frequently became parameters of hegemonic a functional tool for political regimes, conflicts in the global system manipulated to safeguard the long-term survival of fragile states that could have hardly endured strong domestic and international pressures. After a century following the discovery ofoil reserves in the Gulf, the MENA region continues to occupy a central place in the global system as a focal region of hegemonic struggles in which around one third of global oil production is realized and 65 per cent of all known reserves are located." Notwithstanding its impact on the configuration of the MENA:s critical position in the international system, oil also played a crucial role in the reshaping of domestic balances of power, occasionally affecting the formative processes that led to the establishment of certain nation states. As the provision of cheap oil resources for the British Navy constituted one ofthe foremost priorities of British colonial strategy, the British traditionally supported the formation of micro states in the oil-rich Gulf region to control the expansionist tendencies of Saudi Arabia. In the post-war years, loopholes created by the ailing British grand strategy were filled in by the US, which supported the consolidation ofvarious states, including Saudi Arabia, through galvanization of bureaucratic structures and favorable access to Western markets. Particularly in the early aftermath of the Second World War, the control of major oil reserves began to constitute one of the main geo-economic parameters of hegemonic conflicts in the global system. To illustrate, the dramatic toppling of General Musaddiq in the 1950s after nationalizing Iran's oil industry became a harbinger of forthcoming conflicts that were somehow related to the control of oil reserves by global powers and the orderly flow of cheap-oil into industrialized economies. Meanwhile, the French followed a slightly different strategy in the region by explicitly supporting nationalization of petrol industries in various MENA countries. It was generaliy argued that the main motivation for this pragmatic French attitude was to disassociate themselves from the aggressive colonial image of the Anglo-Saxons conceived as "relentless pursuers of oil reserves through political/military pressures;' while forming cordial relations with 181

Global Transformations and the MENA: A Comparative Political Economy Analysis

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There is no doubt that the galvanization of rentier states as the dominant political form in the MENA constituted a strong obstacle hindering structural transformation and political liberalization

regional actors to secure an uninterrupted inflow of oil."

A myriad of sophisticated colonial calculations became influential in the foundation and institutional consolidation of several micro states in the region as autonomous political actors, besides maj or states such as Egypt, Maghreb States, Syria, and Lebanon. In terms of regional and global balances of power, the critical geo-economic distinction between the so-called "new" and "old" MENA countries, roughly corresponding to the groups of states that did, or did not, possess substantial oil reserves, constituted one of the profound demarcation lines in the regional political economy. This demarcation line has also been critical in determining effective governance of economic stabilization and liberalization programs in some countries in the wake of multifaceted pressures of economic globalization, and rather protracted progress observed in some others.

At this juncture, it is worth referring briefly to the rentier state paradigm that became established in the development and comparative/international political economy literatures following the international oil crises as an attempt to conceptualize the domestic transformation trajectories of oil-producing MENA states around OPEC. Focusing on the reproduction of domestic political legitimacy through systematic distribution ofrents acquired from oil production and foreign aid, the rentier state approach constituted the predominant perspective in Western academic circles adopted to analyze the political economy of the MENA up until the 1990s. 15 It was stipulated, in line with mainstream modernization theory, that state structures were supported by the population in democratic regimes both politically and financially, which made it possible to apply democratic principles such as transparency and accountability in return for nationwide taxation. In the history of Western democracies, the principle of "no taxation without representation" was widely used to indicate the intimate relationship between fiscal functions of the state and its political legitimacy on the one hand, and between political legitimacy and social representation capacity on the other. Arguably, in typical rentierstates political elites sought to sustain their political dominance by avoiding nationwide taxation and constituting complex rent -distribution mechanisms designed to allocate rents derived from oil production, foreign aid or similar channels isolated from productive economic activities. This state of

1821

affairs, in turn, stimulated a radical differentiation between production oriented politico-economic systems in which the value-added is created by the society at large and partly transferred to the state through taxation, and the rentier political economies in which financial sources and the value added are created by the state through the sale of natural resources, or the use of foreign chaunels independent of major social groups. This differentiation resulted in critical dissimilarities in terms of formation and preservation of political legitimacy, as well as profound socioeconomic dynamics that shaped the nature of state-society relations. In productive political economies, the main role ofthe state is taxing the valueadded created by social sectors and using the derived resources both for the realization of public services and provision of social welfare measures to maintain long-term stability. However, in rentier states commercial use of oil reserves and foreign aid tend to constitute ready-made resources for political elites that could be directly distributed to various social sectors to preserve the status-quo without any need for fiscal reform. Hence, in these states the distributive, rather than the fiscal roles of the political apparatus are emphasized, rendering taxation and promotion of production second-class activities. The most important reflection of this situation in terms of the recent history of the MENA concerns a general tendency among political elites to feel exempt from pressures of transparency and accountability in the absence of systematic taxation regimes, leading to a weakening of social forces that seek to promote democratic consolidation. The regional antidote to the Western principle of "no taxation without representation" in the region has been "no representation without taxation:' 16

Viewed from the perspective of interactions between key socioeconomic groups, there is no doubt that the galvanization of rentier states as the dominant political form in the MENA constituted a strong obstacle hindering structural transformation and political liberalization. Therefore, unlike many other regions of the globe, the emergence of relatively autonomous entrepreneurial classes who could organize powerful interest and pressure groups was considerably delayed, thereby enabling state elites to respond to societal demands in a rather inadequate and selective manner. In other words, state elites viewed income sources derived from oil extraction, foreign aid and worker's remittances as safety valves in line with their existential instincts, and preferred to meet only those social demands deemed essential in terms of long-term sustainability of their regimes and power bases." Meanwhile, incorporation of entrepreneurial groups into networks ofrent distribution as pseudo-public agents led to a situation in which domestic market mechanisms lost their dynamism and raising the degree of national competitive183

SADIKONAY

ness in world markets ceased to be a national goal. Consequently; consolidation of rentier states did not only stimulate antidemocratic tendencies aimed at hard or soft authoritarian rule, but also engendered inefficient domestic political economies based on corruption, clientelism, nepotism and misuse of public funds. In exceptional cases of partial political liberalization such as Morocco and Jordan, the initial impetus towards political relaxation came from fiscal difficulties experienced by these states and the need to expand the tax base through limited democratization. This could also serve as a clear example that illustrates the critical relationship between the processes of taxation, political representation, and legitimacy. 18

Furthermore, it is also interesting to observe that oil wealth historically did not playa crucial role in financing socioeconomic development and structural transformation projects as a tool aimed at mobilizing inter-sectoral synergies. Beside its impact on triggering international financial flows and labor migration, the oil factor did not exert a considerable influence on the systematic integration of the MENA economies to constitute a dynamic regional political economy with sustainable growth potential, such as the case of East Asia. On the contrary, endless conflicts concerning legal sovereignty rights over oil reserves and relative distribution of oil wealth created a perpetual source of instability both within and among various MENA states. From a different angle, sectoral interactions between oil extraction and areas such as agriculture, industry, and employment creation remained extremely low on a regional basis, creating dual economic structures in many countries characterized by a relatively modern oil extraction sector and comparatively backward sectors in the remaining areas of domestic economy. Not surprisingly, the bulk of the technology, organizational skills, and know-how in the oil extraction sector were imported from abroad, contributing to a considerably weak intra-regional trade performance. To sum up, the political economy of oil limited economic relations between neighboring countries to rent transfers from oil exporting countries to oil importing countries through worker's remittances or tourism, as well as transfers originating from price fluctuations in international energy markets." It is worth stressing at this juncture that the presumed relationship between capital scarcity and slow growth in the development literature that derive principally from the studies of Walt Rostow" proved unwarranted in the light of the historical trajectory of the political economy of the MENA. It was strongly articulated in Western academia that the excess income gathered byvarious MENA countries associated with OPEC during the international oil crises in the 1970s 1841

Global Transformations and the MENA: A Comparative Political Economy Analysis

would solve the problem of industrial finance and accelerate the pace of political and economic modernization. This approach, inspired by the early modernization theory, could be conceived as a perfect historical precursor to arguments relating to the potential impact of high oil prices in the early years of the new millennium on the post-war reconstruction and modernization of Iraq. In retrospect, the dreadful experience of the post-1970 period demonstrated that excessive dependence on exporting unprocessed oil to world markets rendered oil producers defenseless against global price fluctuations. Oil wealth, on the other hand, was frequently used for unproductive purposes such as luxury consumption, military expenditures, and politically-motivated rent distribution. Time will show whether the political economy of oil extraction in Iraq would follow an identical path, or represent a historic deviation from established patterns. Another key aspect ofthe political economy of oil concerns the widespread use of oil wealth to support excessive employment in the public sector. This strategy was commonly conceived bypolitical elites ofoil producing countries as an appropriate way oflegitimating their regimes through ever-expanding public employment schemes, while covering up hidden unemployment and reluctance to work among their populace. Revenues created by foreign-dominated oil extraction sectors were frequently used as leverage over key social groups to prevent political repercussions of macroeconomic failures, rather than a source of financing investment in underdeveloped sectors. To illustrate, Iran and many Arab countries that possess relatively inefficient agricultural sectors failed to modernize their domestic agricultural capacities for a long time and continued to finance their agricultural needs by maintaining massive trade deficits thanks to oil wealth. Furthermore, as emphasized by the rentier state literature, the secretive and authoritarian character ofmany political regimes in the region prevented transparency and accountability in the governance of domestic political economies as a result of which statistics concerning oil production and related revenues were generally kept in secret as a matter of national security." To conclude, the oil factor which attracted the attention of major global powers to the MENA region since the early 20'" century seems to have contributed very little to stimulate national and regional dynamics of socioeconomic development, except aggravating national security concerns of local elites and preparing a pretext for increased militarization. Transformations in the Global Political Economy and Responses from the MENA The collapse of the Bretton Woods regime based on fixed exchange rates and financial controls, international oil-shocks and fatal crisis of dirigisme manifested 1185

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in the decline of inward-looking development strategies, i.e. import substituting industrialization and economic planning in the 1970s necessitated a profound rearticulation of the relative weight of states and markets in promoting economic growth and development. With the resulting ascendancy of neoliberallsm as the new orthodoxy in global development discourse, deliberate policy programs aimed at substantially reducing the relative proportion of national resources controlled by the state and used for social purposes spread across the world. The collapse of the post-war embedded liberal compromise in Europe based on "a form of multilateralism compatible with the requirements of domestic stability":" went hand in hand with the advent of profound liberalization projects in developing countries. Unsurprtsingly; the MENA became one of the prominent regions where the foremost experiments with comprehensive economic liberalization were executed, given the intense influence of global power struggles in the area. To cite a few concrete examples; the Egyptian policy of Infitah (liberalization, opening-up) initiated by President Anwar Sadat in the mid-1970s attracted the attention of economic analysts, closely followed by the Likud Party's commitment to economic liberalization before the 1977 General elections in Israel amid a serious balance of payments crisis. Likewise, renouncement of socialist planning in Algeria with the coming to power ofBenjedid in 1978, and the structural overhaul ofTurkey's political economy with the 24 January 1980 decisions triggered similar dynamics of economic liberalization.> In view of the fact that parallel processes of economic reform were taking place all over the world except in the communist bloc, conjunctural or systemic-oriented explanations were proposed to understand the fundamental dynamics that underpinned systemic transformation in theMENA. Conjunctural explanations broadly stated that the global recession in the mid1970s, increased international indebtedness, and strict conditionality criteria ofthe

IMF- World Bank structural adjustment programs have triggered a trend towards global standardization of macroeconomic policies and development approaches around market-friendly neoliberalism. Systemic explanations, on the other hand, focused on the systemic causes of crisis in inward-looking economies, as exemplified by the seminal work of Guillermo O'Donnell on Latin America." These explanations emphasized that state-led development strategies typically let to a misallocation of economic resources, and inevitably triggered foreign exchange crises due to their acute neglect of exports. Representative analyses written from systemic and conjunctural standpoints in a Middle Eastern context include State and Class in Turkey' and the Egypt of Nasser and Sadat respectively." Yet, one' 186

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needs to express the qualification that such generalizing analyses are bound to underestimate national variations and context-specific conditions, illustrated by the fact that oil-rich Middle Eastern states managed to postpone the unraveling of economic/developmental crises in the Latin American type up until the 1980s, unlike Israel and Turkey which had to enter into the course of structural change earlier due to unparalleled foreign exchange shortages. Although the external stimuli towards accelerated global economic integration and liberalization of commercial and financial realms were common for all developing countries, including those located in the MENA, unique trajectories followed in reforming statist systems of economic governance have been extremely varied. Historical experience reveals that the need for urgent and fundamental reform in itself no way dictates the nature of the policies to be pursued, main instruments to be used, institutional designs to be adopted, societal priorities to be taken into account, and potential costs to be born subsequently. On the contrary, the formation of a peculiar transformation trajectory seems to be conditional upon a myriad of interrelated factors including the depth of the initial socioeconomic crisis; the intensity of international pressures attached to credit conditionality; geo-strategic importance of the country in terms of natural resources and US/Western foreign policies; and the size and the productive capacity of the local economy"

'"

The cumulative consequence of all such factors proved to be a complex web' of politico-economic games played out in a variety of institutional settings and at various levels, with the eventual restructuring of established relationships between the state, society, and economy in the region. However, concrete experiences of MENA countries revealed that the course of events followed a largely different path than foreseen by the mainstream neoliberal discourse of rhetoric of "retreating states, expanding societies:' In the majority of MENA countries, what happened in the economic realm reflected processes of "re-regulation" and "re-positioning:' whereby political authorities redefined the position of the state vis-a-vis the economy in order to better cope with emerging global realities while preserving their political power bases and domestic interest configurations. Politics of Economic Reform and Divergence At this juncture, it seems illustrative to present a historical detour into respective experiences of certain countries in the MENA with economic liberalization to underline regional parallelisms and divergences in policy formulation and implementation. To start with, when Turkey was experimenting with import substitn187

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Global Transformations and the MENA: A Comparative Political Economy Analysis

tion industrialization-cum development planning between 1960 and 1980, North African countries including Egypt were following similar courses even with a heavier doze of state interventionism. In Egypt and Tunisia, state-led industrialization under a tight regime of capital controls and extension of public ownership lasted throughout the 1960s, followed by Algeria in the 1970s. Reminiscent of Turkey's economic planning experience, the initial enthusiasm with planned development was soon over in these countries, once the inability of inward-looking regimes in generating the foreign exchange required for necessary (capital and intermediary goods) imports and maintenance ofweIfare regimes became clear. Consequently, all of these three countries adopted programs of economic liberalization and gradual opening to international capital, the most spectacular being the 1974 program of Infitah in Egypt. Preceding the similar Turkish experience, the Infitah initiative replaced the emphasis in public policy on five-year plans, heavy industry, and state economic enterprises with calls for encouraging private sector activity, foreign direct investment, administrative decentralization, deregulation, and privatization.

quadrupling oil prices. However, these Most MENA regimes preferred countries also witnessed galvanization to limit their reformism in the of a system of crony capitalism whereby economic field and carefully Ba'ath Party officials, public managers, avoided political liberalization trade unionists, and local businessmen developed networks of financial ma- over the course of the transition nipulation and corruption. Expectediy, from developmentalist to long-lasting regional conflicts such as managerial modes ofgovernance the Iran-Iraq War, or Syria's feud with Israel created extra sources of rent-creation through military procurement and aid schemes. Both Syria and Iraq managed to maintain strictly authoritarian and sectarian regimes in the presence of economic dirigisme for a considerably long period of time. Even Jordan, known as the most liberal of the countries in its respective location, proved extremely reluctant in privatizing some of the critical state economic enterprises for both political and redistributive reasons and maintained a partially liberal trading regime with a certain doze of public control.

Nevertheless, all three major North African countries proved less successful in implementing structural changes in the economic sphere compared to Turkey; which was commended by international financial community in the 1980s as a textbook example of economic liberalization. In the face of mounting social unrest with austerity measures and declining income as a result of declining oil prices Egypt, Tunisia, and Algeria were forced to receive assistance from the IMF, World Bank, and international creditors from the mid-1980s onwards as a result of which structural adjustment continued as a protracted and open-ended process. Consequently, North African states administered by hard or soft authoritarian regimes managed to maintain a crucial degree of control over the economic realm in order to preserve distributional channels that ensured sustainabiIity of established political balances. Moreover, resembling the post-communist transitions, the first group of entrepreneurs to take advantage of liberalization reforms often acted as political allies of the ruling elite and attempted to block further change to maintain their distinctive privileges. Political liberalization was deliberately left behind schedule and became disassociated from economic reform based on the widely exploited excuse that masses displeased with austerity measures could turn to ethnic-religious radicalism and threaten the countries' standing in the international system.

Finally, in the group of small Gulf States, personal control of oil revenues by the ruling families and absence of taxation on personal wealth considerably diminished demands for political representation and delayed popular pressures in this regard. Yet, political consent was conditional upon the maintenance of high levels of military spending for national security purposes and a comprehensive range of welfare services which created an increased emphasis on private sector activity and foreign investment in recent years. Nevertheless, steps towards privatization of strategic enterprises and liberalization of political regimes progressed at a snail's pace. "Whileanalyzing the interrelationship between economic liberalization and democratization in the MENA, it is inevitable to discern a typical Third World Passage which left its mark on the subsequent configuration of national political economies. This involved a swift transition from colonial rule to formal national independence on the basis of authoritarian systems legitimized with reference to security threats and urgent developmental needs in the socioeconomic realm. The second phase typically witnessed a partial re-articulation of established authoritarian compacts in line with international pressures via predominantly economic, and to a lesser extent political, openings aimed at providing some breathing-space for various interest groups without endangering systemic fundamentals.

From a different angle, oil-rich Arab states such as Syria and Iraq enjoyed steady rates of economic growth in the 1970s thanks to the international oil crisis and

In a region struggling to catch a developmental momentum while striving for protection from external threats, the existential goals of national security and

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rapid industrialization received priority over those ofpolitical pluralism, consolidation of rule of law and protection of human rights and liberties. The locus of public administration became creation of a national consensus on vital priorities, which often occurred in the absence of a freely conducted public debate. Even in countries attempting to maintain a democratic path, i.e, Turkey, Israel, and Lebanon, the sheer amount of politico-economic requirements on national administrations aggravated the intensity of political conflicts, thereby triggering occasional regime crises and preventing democratic consolidation.

Endemic instability in the regional security framework and fluctuations in fragile energy markets continued to determine the domestic transformation trajectories of MENA countries to a great extent

The end of the Cold War with the apparent victory of liberal democracy and free market capitalism created brand new challenges as well as opportunities for the countries in the region through a mixture ofpolitical, economic, and military pressures. Throughout the 1990s the main impetus for systemic change originated from the need for economic liberalization in order to decrease the economic role of the state and expand that of the private sector, with the implied hope that this would pave the way for gradual democratic opening. However, in stark contrast to the original expectations, most MENA regimes preferred to limit their reformism in the economic field and carefully avoided political liberalization over the course of the transition from developmentalist to managerial modes of governance. Consequently, re-regulation of economic activity in the 1990s invariably maintained and even galvanized extensive state control over resource allocation through various forms of crony capitalism, whereby well-connected businessmen collaborated with public authorities to consolidate ad hoc and corrupt forms of global integration. In the absence of democratic consolidation, political pluralism and removal of restrictions on civil society activity. national armies maintained strong leverage over political processes behind the scenes. The main concerns of intra-elite competition was practically restricted to a quite narrow set of issues such as presidential succession, manipulation of election results, various interpretations of Islam and secularism, controlling dissemination of sensitive information and restricting NGO activities. So far, the overall track record of the MENA countries in terms of establishing compacts that bring together a productive freemarket economy and functioning democratic regime has been quite dismal. Not 190

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surprisingly, the military occupation ofIraq and physical presence ofthe US in the region since 2003 contributed to the intensification of national security concerns held by most political regimes and galvanized existing authoritarian tendencies against the real or perceived external threats. Despite abortive projects through which region-wide dynamics was attempted to be transformed to accommodate regimes that endorse liberal democracy and free market capitalism, the picture on the ground reflects selective economic liberalization mixed with various forms of political authoritarianism. Performance Effects of Economic Liberalization Despite differential performances of economic growth and structural transformation in the MENA since the first quarter of the 20" century, it must be stressed that most of the countries in the region traditionally have had inflated public sectors compared to other middle and low income countries in the world. Moreover. many observers interpret the acute failure of political regimes to successfully implement developmental strategies such as import substitution and export promotion as a natural consequence of their inability to form stable macroeconomic environments due to unrelenting national security obsessions." Justas the Cold War environment used to trigger the formation of "national security states; endless political and military conflicts in the region triggered state structures with overgrown security, intelligence, and military facilities; as opposed to weakly composed socioeconomic transformation capacities and civil societies. It is also worth stressing that the Hobbesian psychology of "total war" both encouraged the state elites to create artificial scapegoats from foreign actors to occasionally camouflage their policy failures, and create conflict-oriented rent-distribution mechanisms that lead to unproductive use of physical and human resources." In this context, endemic instability in the regional security framework and fluctuations in fragile energy markets continued to determine the domestic transformation trajectories of MENA countries to a great extent. The MENA region contains great discrepancies in terms of financial and human resources, governance capabilities, and average living standards. Moreover, these discrepancies trigger both national and regional conflicts pertaining to resource distribution. In the critical time frame between 1980 and 2000 during which numerous neoliberal revolutions were experienced across the developing world, one could clearly detect that the MENA followed an exceptionally disappointing development trajectory that failed to capitalize on the potential benefits of economic globalization. In the period concerned, the average increase in per capita income levels in the MENA area remained around half of that in South 1191

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Asia and dramatically lower than that in Asia-Pacific." Given the rapid population growth in the region, it is conceivable that the abysmal economic growth and wider development performance displayed by many MENA countries along with political conflicts and repression of distributive demands could stimulate further instability in the future. Likewise, in terms of attracting foreign direct investment (FDI), the MENA region stayed well behind many regions with comparable development levels. Despite conjunctural successes by Turkey and several Gulf states on the PDI front between 2002 and 2008, deep-seated political conflicts led by the Palestinian problem, and constant social tensions kept the region outside the remit ofmainstream global FDI flows. Between 1980 and 2000 when dynamics of economic liberalization, export-led growth, and global economic integration reached their zenith, the total export figures of the Latin American and Caribbean countries have increased by 350%, those of South Asia increased by 400%, East Asia by 550%, SubSaharan Africa by 24%; while the total exports in the MENA region increased by a mere 5%.31 The overall regional outlook has remained bleak despite the relatively successful economic growth and export performances of Turkey, Morocco, Israel, and various members of the Gulf Cooperation Council in the post-2002 era.

Global Transformations and the MENA: A Comparative Political Economy Analysis

to remain outside of the global trading regime. However, whatever their policy approach or developmental needs, all political regimes have developed safeguards to prevent rapid socioeconomic transformation, while carefully avoiding clear loyalty to any macroeconomic governance and development strategy,"

Perceptive Dissonance and Anti-Globalism in the MENA The new global integration dynamics played a double role ofkeeping the MENA region at the epicenter of the global political economy and gee-strategic calculations among major powers on the one hand; and triggering domestic forces of sociopolitical, economic, and cultural transformation in domestic domains on the other, albeit with varying paces and scopes. A careful observer could easily discern an ever-strengthening tendency towards the blurring ofthe demarcation line between domestic and international spheres of politico-economic activity in the MENA, indicating an intensification of national and regional reflections of mainstream developments and debates dominating the global agenda. When it comes to the analysis of peculiar regional perceptions of globalization in the MENA in the light of historical factors as well as current economic and gee-strategic realities, the spectrum of barriers to be removed in the course of global integration has been expanded to include not only protectionist trade and monetary policies but also the political regimes themselves."

From an analytical angle, as regards to the regional responses given by the MENA states to the dissemination of the so-called Washington Consensus, it is possible to discern three broad approaches in the form of "total acceptance;' "total rejection:' and "selective acceptance." Through a broad categorization of countries in terms of their respective policy outlooks, one could describe Turkey, Israel, Morocco, Tunisia, Jordan, Lebanon, and the Gulf states as countries that adopted various structural adjustment programs around the 1980s, and at least on a formal level, followed relatively market-friendly economic strategies. At the same time, these countries played a leading role in the region in forming first institutionalized trade relations (in the case of Turkey, a Customs Union Agreement with the European Union in 1995). Before the 1993 Oslo Accords, Egypt and Saudi Arabia were also integrated into this group of countries as a result of the initiatives of the US. Despite domestic instability and violent conflict, Lebanon also followed a broadly neoliberal policy trajectory.

Particularly in the aftermath of the military invasion against Iraq, the largely controversial issue of "regime change" began to be seen as an integral part of the regions prospects of integration with the global system. TIlls led many analysts to indicate an intensifying "clash of globalizations.?" instead of the projected "clash of civilizations" proceeding full blown under specific regional circumstances. Accordingly, this strategic and vulnerable region has been witnessing a brutal clash between the monolithic vision ofglobalization held by the American administration based on stimulating regime change and protecting their economic interests via unilateral interventionism; and apparently more humane and participatory form of globalization advocated by certain international organizations, civil society groups, and various European states based on intensive integration in the economic sphere while striving to improve democratic standards.

Likewise, Turkey, Israel and, the GUlfstates became the first regional actors that joined the World Trade Organization in the aftermath of the Uruguay Round to take advantage of early trade liberalization. Egypt, Jordan, Morocco, and Tunisia also joined the WTO but continued to apply high rates of customs duties in selective sectors, while crucial countries such as Iran, Iraq, Syria, and Yemen preferred

The root causes of this perceptive conflict and the overwhelming tendency to equate globalization with imperialist expansion undoubtediy derives from the implications of ongoing conflicts such as the Palestinian problem and the Iraq War as well as the region's exceptional historical legacy characterized by unrivalled colonial meddling. As Brown has succinctly stated, "the Middle East has been caught

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The second wave of economic globalization was conceived and publicly articulated as a clear threat to the national, religious, or cultural definitions of identity formulated by the prevailing political elites in the region

up in multilateral great powerpolitics and imperialist interventions over the course of the last two centuries more consistently and thoroughly than any other region in the non-Western world," and this ex-

perience has left its mark on prevailing political attitudes and actions of elites." Therefore, it was not surprising to observe that any form of political and economic liberalization following decolonization was met with deep suspicion and both popular and elite level resistance. To illustrate, the IMF discipline exercised over various indebted MENA economies in the 1980s was easily associated with the infamous "contracts of submission" enforced in the region by the great imperialist powers of the last century through gunboat diplomacy and coercion." A colonial dialectic is easily reenacted particularly in the Arab Middle East against pressures for economic and political reform, frequently mobilized in defense of entrenched authoritarian and corrupt regimes, rentier states, and clientele politics in the name of patriotism and national independence. Therefore, it is not surprising that so far the most thorough experiments with economic liberalization and democratization were witnessed in Turkey, Israel, and to a lesser extent Iran, three non-Arab entities in the region without an entrenched colonial collective memory. Multifaceted processes of transformation which intensified in the region since the 1990s along with economic integration and political liberalization initiated a new era in which not only geo-political and geo-strategic concerns dlrectly related to national interests, but also geo-economic and geo-cultural dynamics of global integration ought to be evaluated as crucial variables in the formulation and implementation of peculiar transformation projects.

Conclusion In this study, the main parameters underpinning the transformation trajectory of the political economy of the MENA region were evaluated from a historically and theoretically informed perspective. In so doing, special emphasis was attached to the critical historical legacy reaching deep into the Ottoman past and the colonial period during which the bulk of the current relationship patterns between the political elites and peoples in the region were consolidated. It was emphasized that the majority of the consolidated political regimes in the region carried the defensive collective memory and downbeat legacy derived from their 1941

dealings with colonial powers in the last two centuries and the us in the last half century whIle facing the opportunities and challenges created by the multifaceted process of giobalization. In relation to that, the impact of this historical and socio-psychologicallegacy in preparing a fertile ground for pragmatic opposition movements operating against various forms of global economic integration was emphasized. Intensification of international capital movements and foreign investment flows in the context of accelerated global integration in the late 20'" century was perceived as a natural continuation of the first wave of globalization on the eve ofthe First World War, which carried the expansionary flag ofcolonialism. Consequently, the second wave of economic globalization, in a rather similar fashion to the first one, was conceived and publicly articulated as a clear threat to the national, religious, or cultural definitions of identity formulated by the prevailing political elites in the region. The upshot ofthe hitherto presented analysis concerns the idea that, instead of evaluating emerging trends and realities in the global political economy in a rational manner and formulating dynamic and comprehensive responses supported by institutional and sectoral designs, socioeconomic processes are imprisoned in the region into discursive patterns of "securitization" and ideological justification by political establishments. This, in turn, leads to a situation in which political conflicts are accompanied by socioeconomic and distributional conflicts, and perpetual "crisis management" becomes a norm, rather than the exception. In this regard, the positive growth and structural transformation momentum achieved by Turkey between 2002 and 2008 up until the onset ofthe global economic crisis, along with a systematic move towards democratic consolidation, might constitute an exemplary and inspiring model for the region if it proves sustainable in the long-run. In a way, the jury is still out to decide whether the experience of uninterrupted growth between 2002 and 2008 represented a genuine break from Turkey's past trajectory characterized by endemic financial crises and politico-economic instability, or a conjunctural recovery realized thanks to favorable gioballiquidity conclitions for emerging markets, the confidence-building impact ofongoing relations with the IMF, and the prospects of full membership to the EU after the start of accession negotiations in 2005. The answer, which is likely to crystallize once the negative effects ofthe global economic crisis are over and counter-measures taken by public authorities are withdrawn, will have direct implications in terms ofTurkey's democratic consolidation, the strategic direction ofthe country's incomplete structural transformation, and the political economy of the MENA in general. 1195

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The study has also highlighted the strategic role of oil both as a source of economic revenue and political consolidation by stressing that accumulation of oil wealth did not generate a regional dynamism for growth and extensive development. On the contrary, it was argued that oil resources frequently fueled territorial disputes and rent-distribution struggles between and within states, thereby effecting differential national responses to the implementation of neoliberal transformation packages in line with the "Washington" and "post-Washington Consensus" principles. The fundamental argument raised throughout the study concerns the idea that comprehensive projects of socioeconomic development and structural transformation require systematic mobilization of endogenous dynamics accompanied by a strong political will and institutional framework, while paying due attention to contemporary trends in the global political economy. The political economy of the MENA will witness systemic transformations that match and transcend global trends only when domestic leadership, political institutions, civil society, and entrepreneurial groups develop progressive synergies aimed at socioeconomic development and democratic consolidation. Endnotes 1. Despite premature assessments to the contrary, Turkey's recent (post-2003) success in accomplishing sustainable economic growth along with gradual democratic consolidation does not yet constitute a dear exception to this generalization regarding the .MENA region. It seems still quite early to conclude that the country has completed a structural and institutionalized rupture from the vicious political and economic cycles of the past. Given the resilience of undemocratic tendencies within the civil-military establishment which were unveiled yet again via critical court cases in recent years, as well as sources of economic fragility such as high current account deficit, unemployment and insufficient levels of domestic savings, there is still substantial distance to be covered. 2. For deliberately popularized examples of typically superficial and over-generalizing analyses that paid scant attention to regional circumstances and politico-cultural backdrops 'in their interpretations of transformation dynamics in the 1\1ENA see, Francis Fukuyama, The End of History and the Last Man (New York:St. Martin's, 1992); and Samuel Huntington, Clash ofCivilizations and Remaking of Word Order (New York: Simon Schuster, 1996). 3. Bahgat Korany, "The Middle East since the Cold War: Torn between Geopolitics and Geoeconomics," in Louise Fawcett (ed.) International Relations of the Middle East (Oxford: Oxford Univer-

9. John Zysman, Governments, Markets and Growth: Financial Systems and the Politics ofIndustrial Change (Ithaca: Cornell University Press, 1983).

10. Rudolf Hllferding, Finance Capital: A Study of the Latest Phase of Capitalist Development (London: Routledge, 1981). 11. Clement Moore Henry, The Mediterranean Debt Crescent Money and Power in Algeria, Egypt, Morocco, Tunisia and Turkey (Gainesville: University of Florida Press, 1996). 12. Henry and Springborg, Globalization and the Politics ofDevelopment, pp. 20-29. 13. Alawi Kayal, The Control of Oil: East- West Rivalry in the Persian Gulf (London: Kegan Paul, 2002). 14. Daniel Yergtn, The Prize: The Epic Quest for Ott; Money and Power (New York:Simon Schuster,1991). IS. For the founding analyses of the "rentler state" paradigm, see Hussein Mahdavy "Patterns and Problems in Rentier States: The Case of Iran': in Michael Cook (ed.) Studies in the Economic History of the Middle East (Oxford: Oxford University Press, 1970), pp. 35-54; and Hazem Beblawi and Giacomo Luciani (eds.) The Rentier State (London: Croom Helm, 1987). 16. Giacomo Luciani, "Oil and Political Economy in the International Relations of the Middle East," in Louise Fawcett (ed.) International Relations of the Middle East (Cambridge: Cambridge University Press, 2005), pp. 79-102. 17. Strategically important countries in the MENA in terms of major global powers such as Egypt and Israel were consolidated as "fully-fledged rentier states" due to the inflows of comprehensive American economic and military support which reached to billions of dollars concomitant with sources of regional instability. Both official development assistance (aDA) and informal assistance provided by the US played a key role in the galvanization and long-term survival of political regimes in these countries under extremely volatile international conditions. 18. Giacomo Luciani, "Oil Rent, Fiscal Crisis of the State and Democratization," in Ghassam Salame (ed.) Democracy without Democrats: The Renewal ofPolitics in the Muslim World (London: LB. Tauris, 1994), pp. 119-140. 19. Richards and Waterbury, A Political Economy of the Middle East, p. 173. 20. Walt Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge: Cambridge University Press, 1960). 21. Henry and Springborg, Globalization and the Politics ofDevelopment, p. 277. 22. John Gerrard Ruggie "International Regimes, Transactions and Change: Embedded Liberalism in the Post-war Economic Order;' International Organization, Vol. 36 (1982), p. 399.

sity Press, 2005), pp. 59-75.

23. Roger Owen, State, Power and Politics in the Making ofthe Modern Middle East, Third edition (London: Routledge, 2004), p. 113.

4. Fred Halliday, The Middle East in International Relations: Power, Politics and Ideology (Cambridge: Cambridge University Press, 2006), p. 261.

24. Guillermo O'Donnell, Modernization and Bureaucratic Authoritarianism: Studies in South American Politics (Berkeley, CA: University of California Press, 1979).

5. Roger Owen, The Middle Eastin the World Economy, 1800-1914 (London: I.B. Tauris, 1993). 6. Fred Halliday, "The Middle East, the Great Powers and the Cold War;' in Yezid Sayigh and Avi Shlaim (eds.) The Cold War and the Middle East (Oxford: Oxford University Press, 1997), pp. 6-26. 7. Alan Richards and John Waterbury, A Political Economy of the Middle East, Third Edition (Boulder, CO: Westview Press, 2007), p. 37.

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8. Clement Moore Henry and Robert Springborg, Globalization and the Politics ofDevelopment in the Middle East, Second Edition (Cambridge: Cambridge University Press, 2010), p.1S.

25. Caglar Keyder, State and Class in Turkey: A Study of Capitalist Development (London: Verso, 1987).

26. John Waterbury, The EgyptofNasser and Sadat: ThePoliticalEconomy of Two Regimes (Princeton, NJ; Princeton University Press, 1983). 27. Owen, State, Power and Politics, p. 114.

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28. Economic Research Forum, Economic Trends in the A1ENA Region (Cairo: ERF, 2000). 29. Halliday, 'TheMiddle East in International Relations, p. 156. 30. World Bank, Basic Development Report (Washington DC: World Bank, 2000). 31. Anthony Cordsman, Economic, Demographic and Security Trends in the .Middle East (Washington DC: CSIS, 2001), p. 79. 32. Bahgat Korany, "The Arab World and the New Balance of Power in the Middle East:' in Michael C. Hudson, (ed.) Middle East Dilemma: The Politics and Economics ofArab Integration (London: I.E. Tauris, 1998), pp. 40-45. 33. Nazih N. Ayubi, Over-Stating the Arab State: Politics and Society in the Middle East (London: IE 'Iaurts, 1995), p. 402. 34. Stanley Hoffmann, "The Clash of Globalizations," Foreign Affairs, Vol. 81, No.4 (2002), pp.

104-115. 35. Carl Brown, International Politics and the Middle East: Old Rules, Dangerous Game (Princeton NJ: Princeton University Press, 1984), p. 3. 36. Clement Moore Henry, "The Clash of Globalizations in the Middle East," in Louise Fawcett (ed.) International Relations ofthe Middle East (Cambridge: Cambridge University Press, 2005), pp.

105-127.

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Honored by the Glory of Islam: Conversion and Conquest in Ottoman Europe By Marc David Baer Oxford: Oxford University Press, 2008, 332 pp., ISBN 9780195331752.

Drawing on contemporary archival and manuscript sources, Marc Baer unfolds the most fascinating story of Sultan Mehrned IV. Although his reign was remarkably long (1648-87), he has almost been forgotten or depicted dlsmissfvely as weak and foolish. Aiming to retrieve that lost history, the book's central theme is conversion - of Muslims to "proper" Islamic practices, of Christians and Jews to Islam, and of space. Thus, the reader encounters the Kadizadeli movement that first rose to prominence in the 1650s. The movement advocated a revivalist pietism, in the sense that it called for the effective prohibition of unlawful innovations. The structure of the book follows the sultan's reign. The narrative begins with the circumstances of the enthronement of the seven-year old Mehmed IV in 1648, including a strikingly vivid depiction of Istanbul at the time. Then the discussion moves to the "decade of crisis" that followed. In the face of external and internal challenges, central government proved to be ineffective - as between1648 and 1656 there was a total of twelve grand viziers. The crisis raised the question of legitimacy; in particular, the position of power held by the valide sultan came to be seen as the source of all the empire's problems. Beginning with chapter 3, Baer discusses factors contributing to an improvement in the situation. The Kadizadeli movement is introduced, whose growing influence on the elite suffered a set-back Insight Turkey Vol. 13 / No.1 /2011

when KoprUlu Mehmed Pasha became grand vizier in 1656. During his term of office, the grand vizier managed to suppress internal rebellion and conquer again territory that had been lost. After reestablishing Ottoman rule the mosques that had been converted into churches, were turned back again into mosques ("conversions of sacred space abroad" - pp. 77/8). According to Baer, the grand vizier's success came at the expense of the sultan and the Ottoman household. Thus in the 1660s, Mehmed IV and the valide sultan worked hand in hand to strengthen the dynasty and the sultanate, drawing on notions of piety. Baer explains that the destruction caused by the great fire in Istanbul in 1660 provided an opportunity to Islamize the city. At the time, nearly half of the city's inhabitants were non-Muslims (p. 104). He argues that "in a period of crisis, Islamization of areas inhabited by Christians and Jews in Istanbul served as a visible sign of the authority of the dynasty and religion that Hatice Turhan represented" (p. 101). The religious reorientation was not limited to the elite, "in the 1660s a new wave of Kadizadeli-inspired piety rolled over the city" (p. 104). In 1663, Mehmed IV moved to Edirne, "the old warrior capital" (p. 105),while his mother stayed in Istanbul. At that time, Mehmed IV also appointed an official chronicler and developed a close relationship with the Kadizadeli preacher Vani Meh1199

Book Reviews

med Efendi, who became the confident of the sultan, and also of Hatice Turhan and the grand vizier. At first, the religious reforms targeted Sufis, "especially Bektashis, Halvetis, and Mevlevis, the three orders that historically had had close ties with the military and the dynasty" (p. 112); and - with much less success - the consumption and sale of alcohol. Baer gives an account oftwo conversion projects in the second half of the 1660s: Mehmed IV brought about the conversion of Rabbi Shabbatai Tzevi, the leader of the Jewish messianic movement, in 1665; and Hatice Turhan converted Jewish palace physicians by conditioning their employment on the conversion to Islam. Chapter 7 «analyses how Ottoman historians writing after a mature Mehmed IV moved to Edirne depict him as [... ] a pious, strong, manly, warrior (ghazi) sultan, who reclaimed power taken by royal women and, with his preacher at his side, converted people and places in Ottoman Europe" (p. 138). The discussion focuses on the conquest of Candia (Crete) in 1669, and the process of the conversion of space that followed. Chapter 8 discusses the military campaigns in Europe in the 1670s that were led by the sultan in person. Baer explains that "These victories enabled Mehmed IV to expand the empire to its greatest limits, leaving in his wake bell towers converted into minarets and Christians circumcised as Muslims, which in turn increased the morale of Muslims in the imperial capital" (p. 140). Chapter 9 explores the interrelation between hunting and conversion. Mehmed IV's frequent hunting expeditions were said to have "demonstrated his bravery and courage, hence manliness, and trained 200

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him for warfare" (p. 179). It aiso provided him with an opportunity to come in contact with his subjects, especially during a "drive;' the sultan's favorite hunting technique, in which numerous local villagers were compelled to participate. For hundreds of peasants, their encounter with the sultan resulted in their conversion to Islam. Baer points out that historians have overlooked that the «sultan's mobile court served as a traveling conversion maker" (p. 185). Under the heading, "The Failed Final Jihad," Baer recounts the siege of Vienna (1683) as the culminating point of the aspirations stemming from the ghazi -sultan conception. He stresses that despite negative omens, and despite the option of diverting it without loss of face, the campaign went ahead and ended in the devastating defeat. The discussion of the aftermath focuses on changing interpretations. Already a generation after his death (1693), "Mehmed IV had been remade into a sedentary sovereign" (p. 243); he was no longer referred to as ghazi. "Along with his active role in promoting military conquest of infidel lands, Mehmed IV's conversion of Christian and Jewish souls and space also disappeared from the historical record after his reign. [... his] reign lent itself to erasure, in particular because it is remembered mainly for" the territorial losses following the unsuccessful siege of Vienna (p. 244). The book concludes with general observations on "Islamic rulers and the process of conversion" and provides an overview on how some of the other major actors in the story are remembered. Ursula Wokoeck Ben-Gurion University ofthe Negev InsightTurkey VoL 13/No.1/2011

The Shiites of Lebanon under Ottoman Rule, 1516-1788 By Stefan Winter Cambridge; Cambridge University Press, 2009, 204 pp., ISBN 9780521765848.

Stefan Winter's recent study is a truly revisionist reading of the history of Lebanese communities under the Ottoman Empire. It is the product ofa problem-oriented and well-organized research; an earlierversion had been submitted as a doctoral dissertation to Chicago University in 2002. It is based on a rich bibliography comprising archival documents and secondary sources in many languages. Here,the author strikes a balance between local and official administrative sources. The reader feels that the Ottoman center is wen represented by the regulations and orders dispatched to the Lebanese region. The author, however, narrates his story from a viewpoint within the cities of Lebanon. The book begins with a critical and communicative evaluation of the relevant historiography. In the first chapter, Winter contextualizes the past of the Shiites in the Ottoman Empire, giving a short summary concerning the Shiite holy places in Iraq and discussing the Shiites of Iabal 'Ami!. Briefly he also examines the historical experiences of unorthodox religious movements that in varying degrees were connected to Shiism, such as the Bektasis and KIzI.1ba~. He also attempts to explore mental reflections of Shiism in mainstream "Ottoman thought:' In the second chapter, he explains the foundation of Ottoman rule in Syria and Lebanon in the sixteenth century and describes the relationships between imperial and local power holders, such as the Shiite Harfush, but also the Druze emirates including that of Fahreddin Man. In the third chapter, Winter delves into the past of the Insight Turkey Vol. 13/ No. 1/2011

Hamada emirate, the cooperation of these emirs with the Ottoman center, and their rule over Mount Lebanon between 1641 and 1685. In the fourth and fifth chapters, the author explores the transitions between the seventeenth and eighteenth centuries: in response to financial and political challenges, the Ottoman center moved from a more decentralized and tolerant structure to a more centralized and inflexible one. In these chapters, the author explains the ways in which Ottoman governments forced the local power holders to obey their authority. In the sixth and final chapter, he explains "the decline ofShiite rule in Tripoli and the Bekaa" in the eighteenth century: the Shihabi emirate took the place of the Harfush and Hamada. Winter challenges the long established Maronite-centered historiography; He complains that most authors to date have uncritically relied on local chronicles and western consular reports. Recommending a diversification of source material, he particularly suggests a more intensive use of Ottoman source material. In taking this approach, Winter readily admits his debt to the works of Ahmad Beydoun and Kamal Salibi, who almost a quarter century ago, have questioned and criticized Lebanese national historiography for its 'confessionalist' premises. Sadly although Kamal Salibi ranks as the 'grand old man' of Lebanese historiography; his and Beydouns ideas have not gained wide acceptance, and thus Stefan Winter's approach continues to be innovative. The author is well aware of the prob1201

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lems involved in ascribing a strictly defined ideology to the Ottoman elites. In his work, state and ideology appear as things that rulers, bureaucrats and countless other functionaries make and remake almost in every generation. From this recurrent process there result certain behavioral patterns, which show continuities with respect to earlier policies. With these processes constantly in mind, Stefan Winter examines the long-term history of the ethnoreligious communities inhabiting the area that now encompasses Lebanon, demonstrating the complexities of changing statesociety relations between the sixteenth and eighteenth centuries. Stefan Winter dates the beginning of contemporary Lebanon two centuries earlier than customary: for him the key event is the Ottoman conquest of 1516. Since then the Shiite communities of Lebanon have played a role that is much more ambiguous than has been conventionally accepted. Certainly, the Ottoman elite often came down heavily on people that its members had defined as heretics. But at the same time there was a good deal of 'unofficial tolerance' and certain Shiite families were integrated into the provincial governing body as tax:collectors. As Stefan Wmter puts the case, conventional historiography has legitimized and magnified the status of Druze feudal lords. As a result other groups, particularly the Shiites, have been 'edited out' of the picture. Therefore, this book primarily comes out as a critique of romantic and nationalist Lebanese historical writing and asserts the Shiite roots of Lebanese history. 'Winter shows that Shiite influence did not decline until the late eighteenth century. In other words, the author asserts that the national history of Lebanon begins not only with the exten2021

sion of the Druze and Marontte communities' influence in the region but also 'With the breaking of Shiite power. Winter also criticizes Marxist-inspired idealizing descriptions of class-based political confrontations between the inhabitants of Lebanon and the Ottoman central administration, rejecting as "historicized mythologies" the notions of relentless Ottoman oppression and romanticized Lebanese liberation. According to this author, such simplifications obscure the inter-confessional diversity of the region and more seriously obfuscate the domestic conflicts that occurred even in the middle of the struggle against what was supposedly the 'common enemy; namely the power-holders at the Ottoman center. He dwells on the example of the Shiite Hamadas who in the middle of the seventeenth century were involved in intra-Maronite disputes and ruled over a Maronite district. At the same time, Christians played certain roles in the internal conflicts of the Shiite Hamadas. Similarly, the author. argues that the Shiites of Mount of Amil were not living in an isolated world as supposed by the Lebanese historiography. On the whole, the author as a historian appears to defend Ottoman rule, traditionally accused as the bete noire of the modern nationalist historical writing that developed in the countries formerly belonging to the Ottoman Empire. Ottoman political pragmatism had favored the Shiite Harfush Emirs in the sixteenth century when they were of practical use to the central authorities. However, when their service was no longer needed, the authorities did not hesitate to damage their reputation. Stefan Winter highlights certain cases in which being a Shiite in Lebanon actually might make it easier for a local power-holder to obtain the recomInsight Turkey Vol. 13/ No. 1/2011

mendations needed for obtaining lucrative tax-farms, however in other cases, such a lord might find it more expedient to claim that he was a Sunnl, normally of the Shafi'i persuasion. Throughout, Stefan Winter tries to convince the reader that religious concerns played less decisive roles than a modem reader might think. The most important characteristics of Lebanese political history under sixteenth and eighteenth century Ottoman rule were 'mutual dependency' and 'complex ties of power relationships' between local subjects, intermediaries and imperial authorities. As fiscal concerns were dominant, the distribution of tax farms had nothing to do with sectarian identity; what counted was maximization of revenues and enhanced government control. With regard to religion Stefan Winter emphasizes the importance of the tribal life-style and "folic Islam;' instead of a religiosity shaped according to Islamic law. In this sense, Winter shares the views of Hanna Batatu as weli as Marion Farouq and Peter Sluglett concerning the history of nineteenth-century Iraq. Winter's book rejects the notion of an unchanging ideology of Ottoman 'revulsion' against its Shiite subjects, an assumption mainly based on fatwas produced in the sixteenth century. Showing examples of non-Sunni communities, which preferred to cooperate with the Ottoman governments instead of protesting against them, Stefan Winter argues that the Ottoman Empire did not embrace an enduring policy of 'humiliation' and 'marginalization' against its non-Sunni inhabitants. Hence, although the established ad-hoc consensus might have been highly fragile, being Shiite in Lebanon did not prevent the Shiite Hamada and Harfush tribes from integrating into Ottoman imperial rule. Adopting Insight Turkey VoL 13/ No. I/2011

the thesis of Robert Ian Moore, concerning the formation of a persecuting society in the European middle ages, Winter argues that the "anti-Shiite inipulse" emerged among bureaucratic circles whenever a political necessity appeared and mostly during long-term shifts and structural instabilities. In this regard, the persecution of Kizrlbas in the sixteenth century is represented as a temporal event rather than an articulation of a universal Ottoman antagonism against Shiites. According to Winter, the same thing applied to the Lebanese experience. As the priorities of the provincial government changed, fiscal and political adjustments contributed to the reformulation and adaptation of an offensive discourse against Shiism in the last decades of the seventeenth century. The main reasons behind the Ottoman campaign against the Shiite Hamada tribe, which had held onto power in Tripoli during most of the seventeenth century, were its unruly behavior and the trouble it had caused recently settled tribes. Only after the marginalization of Shiites did central Ottoman authorities co-operate with the Shihabis in destroying Shiite rule in Mount Lebanon. Stefan Winter argues that for the Ottomans, the Shiite Hamadas were primarily brigands before they were members of any sect. However, Winter also points out that after the Shiite emirs proved unable to deliver further services to the Ottoman government, the memory of their previous utility quickly disappeared. In his argument, the author adopts some concepts developed by the French Annales School and tries to identify structural transformations that the Ottoman Empire went through. As a direct consequence, historical agency is given to structures rather than to people. Thus,

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for example, the personal cruelty of Cezzar Ahmad Pasha represents a return to "the normal mode of the Ayan rule" in the eighteenth century; such statements can fairly be criticized for undermining the role of human agency in history. On the other hand, despite noting some long-term changes, Winter's book basically focuses on a chain of political events. This choice does not exactly further the literary quality of a familiar shortcoming among historians who use extensive archival material. Minute anecdotal detail not only becomes tiresome but also occasionally seems not to lead anywhere. Sometimes the reader awaits the concluding paragraphs with impatience. Even a local Lebanese reader well versed in Lebanese geography, may be lost in the plethora of personal and place names. In addition, un-translated quotations in French, especially in the :fifth and sixth chapters, might not be very helpful to the non-francophone reader. However, the major difficulty with the book is that although it is called "The Shiites of Lebanon under Ottoman rule;' I have not found

Book Reviews

a single reference to the social lives of these people. Thus, the narrative concentrates mainly on fiscal and political events, which undoubtedly have their importance but need to be connected with the social reality familiar to these politically ambitious; occasionally rebellious, and occasionally cooperative Lebanese Shiites lived. Stefan Winter is well aware ofthe political potential inherent in his study. Without ever indulging in teleological speculations, he points out that the problems of presentday Lebanon cannot be understood without taking account of the Shiites, who were a constitutive component ofthe population that in time was to become the Lebanese people. In reinserting the Shiite emirates into Lebanese history and revising the current Maronite cum-Druze-centered historiography, the author has made a brilliant contribution to Shiite, Lebanese, Ottoman and more generally, Middle Eastern studies. Faruk Yashcimen Ludwig Maximilians Universitiit Miinchen

From Hellenism to Islam, Cultural and Linguistic Change in the Roman Near East Edited by Hannah M. Cotton, Robert G. Hoyland, Jonathan J. Price and David L. Wasserstein Cambridge, Cambridge University Press, 2009, 481 pp., ISBN 9780521875813, £65.00. This is an important addition to the mounting literature on the cultural and especially the linguistic mix in the eastern provinces of the Roman Empire in the period before the Arab conquests. It arose from a conference and a related research theme on epigraphy and cultural and lin-

2041

guistic change in the Near East "from Hellenism to Islam;' organised by the Institute for Advanced Studies of the Hebrew University of Jerusalem in the year 2002-3. This background, as well as the connection of three members of the research group with the international project, which aims Insight Turkey Vol. 13 / No.1 /2011

to publish all inscriptions from Israel and Palestine surviving from the fourth to seventh centuries, explains the emphasis of some of the contributions on the evidence of inscriptions. On the whole, the volume deals with the period before rather than after the coming of Islam. The exceptions are two contributions on Egypt by Tonia Sebastian Richter and Arietta Papaconstanttnou, both of which deal with the. complex interplay in Greek, Coptic, and Arabic, and a third by Leah Di Segnfs paper that provides a welcome survey of Greek inscriptions in the region from the sixth century and into the late Umayyad period. Robert Hoyland's penetrating paper "Arab kings, Arab tribes and the beginnings of historical memory in late Roman epigraphy;' also discusses the portrayal of pre-Islamic Arab leaders and groups in later Arabic sources. With the exception of the two papers on Egypt just mentioned, the only contributions which deal with Anatolia as distinct from the Near East are the fascinating paper by Angelos Chaniotis on "Ritual performance of divine justice: the epigraphy of confession, atonement, and exaltation in Roman Asia Minor" and Walter AmelIng's discussion of inscriptions relating to diaspora Jews in Asia Minor and Syria. It is a pity that there are no maps, both in view of the large number of place names in the text. In addition, obviously modern national borders are irrelevant to this period, and one of the areas most productive of written material in the period before Islam is now partly or mainly in Eastern Turkey (see Sebastian Brock, "Bdessene Syriac inscriptions in late antique Syria"). Also somewhat distant from the main theme of the volume is Marijana Riel's contribution on the legal and social status of threptoi (children reared by persons other Insight Turkey Vol. 13/ No.1 /2011

than their natural parents) in narrative and documentary sources. The volume well illustrates the intensity of current scholarly discussion about the Roman Near East in the period preceding the impact of Islam. Fergus' Millar highlights much of this theme in his introduction. On one level, this is part of a wider debate about prosperity and decline, with many writers pointing to the 'fall' of the Roman empire and rise to prominence of barbarian peoples in the west as a fifthcentury phenomenon, while the provinces of the eastern Mediterranean continued to flourish economically and culturally at least until the Persian invasion and occupation of the early seventh century (and in the view of many until well after the Arab conquests). An economic boom fed by population growth in this period is highlighted, for example, by Robert Hoyland (p. 388). It is striking that the centre of imperial government in Constantinople seems far away, to judge from the emphasis in these papers. Among the themes that emerge in many of the contributions perhaps, the most prominent are those of cultural identity and the reliability of other markers, such as language and religious practices. A major topic is the use of Greek in relation to indigenous languages (connected with the 'Hellenism' of the book's title), but two papers (Eck and Isaac) also deal with the use of Latin. The contribution by Richter stands out for its application of sociolinguistic theory and comparative material from other periods against a too-ready resort by many ancient historians to notions of bilingualism. Languages and scripts also need to be distinguished. A language could be and often was written down in a different script that the spoken word, as in the case of Arabic, written in northern Arabia

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and southern Syria in Nabataean Aramaic script which gradually developed into Arabic script or in Egypt in Coptic signs. Christian division, a prominent theme in other publications on the Near East in this period, and rightly re-emphasised by Papaconstantinou in relation to Egypt, generally gives way here to these complex linguistic questions, which together present a far more localised and nuanced impression of change than is usually provided. The Talmud, "a complete Greek book written in Aramaic letters;' (p. 284) also emerges as being affected by the cultures surrounding its production. We can agree with Hoyland (374) that this period, which also saw the emergence of a Samaritan script in the fourth century (Dan Barag, "Samaritan writing and writings"), represented an "efflorescence of a whole range of languages and scripts across the Roman empire," and nowhere more vividly exemplified than at Dura-Europos (see Ted Kaizer, "Religion and language in Dura-Buropos"), or Palmyra, where eight churches are now known from late antiquity, at least one of them from the Umayyad period. With this phenomenon oflinguistic change also went the experience of "language death;' "Ianguage shift" or "language loss:' (Richter) Some of these higWy complex developments indicate the formation of new groups, but Papaconstantinou is right (449,

n. 8) to caution that "identity and allegiance in this period is complex, and involves much more than the usually cited religious and ethnic factors:' Thus, the reasons for the "westward spread" of Syriac inscriptions and writing in the :fifth and especially the sixth centuries (Brock, p. 291) or for the rise of Arabic script and disappearance of ENA (Epigraphic South Arabian; see Hoyland, p. 391) are equally complex and multiple. The main reasons were new clientage relationships with the Roman power that brought corresponding changes to the Arab groups already settled in imperial territory and that no group in these Near Eastern provinces during this period could remain unaffected by the degree of change that was taking place on all sides. Many of the contributions address the basic methodological problems inherent in drawing conclusions from inscriptional evidence, or from naming practices. But the overall impression left by this volume is of a period characterised by multiple linguistic and cultural shifts, and of highly complex and changing allegiances. Above all, the consolidation of Islam did not take place in a context of cultural or political decline but against an existing background of energetic experimentation and cultural change. Averil Cameron, Keble College, Oxford

Economic Liberalization and Turkey By Siibidey Togan

London, Routledge, 2010, 322 pp., ISBN 9780415495950. "Economic Liberalization and Turkey" provides comprehensive information related to liberalization of trade in agricultural 2061

and industrial goods, the liberalization of services, and the role of regulatory intuitions in trade liberalization. The book is Insight Turkey Vol. 13 / No. 1/2011

divided into three parts. Part I consist of two chapters. The first two chapters provide readers with an informed background about the liberalization of the Turkish economy. It also looks at the liberalization of trade in goods. Part II of this book consists ofsix chapters. The 6 chapters describe liberalization of Turkey's service sector, including telecommunication, electricity, natural gas, banking, maritime freight, and the road freight transport sector. The Part III is devoted to quantifying the impact of economic liberalization and consists of only one chapter. Part I consists of two chapters, which are focused on Turkey's trade regime and trade liberalization.. According to this first chapter, entitled "The Foreign Trade Regime and Trade Liberalization in Turkey," co-authored by Bartlomeij Kaminski, the Turkish economy is stable because macroeconomic conditions are stable and domestic market competition has given way to greater domestic consumption satisfaction since 2001. Because of the Customs Union Decision (CUD) and Turkey's accession process to the EU, the liberalization process of Turkey's economy allowed for an increased competition in Turkey's domestic market and a more efficient service sector. The CUD contributed to Turkeys domestic market competition by providing predictability, transparency, and stability. Even though, there is a free movement of products between Turkey and the ED, certain protectionist measures remain in place on both sides of the alley. In the «Standards, Conformity Assessment and Technical Barriers to Trade;' co-authored by Saadettin Dogan, exports are the main focus of this chapter. For the Turkish economy, exports have become the primary source foreign currency and Insight Turkey VoL 13 / No.1 /2011

economic growth. For this reason, Turkey tries to eliminate barriers by improving trade standards and adapting the EU's technical legislation into, Turkish legislation for Turkish exporters. Unfortunately, technical barriers to trade between the EU and Turkey have not yet been eliminated. It is argued that Turkey still needs to adopt the model ED technical legislation, establish institutions required -for the efficient functioning of quality infrastructure, train a substantial number of qualified staff, and build a modern technical infrastructure. Moreover, the adjustment costs required to eliminate the technical barriers to trade will be significant for the Turkish public sector. Part II of the book is focused on the liberalization of sectors, such as telecommunication, electricity, natural gas, the banking service, maritime freight transport, and road freight transport sector. The first chapter is entitled "Liberalization of Telecommunications Services;' co-authored by Erkan Akdemir and Erdem Baser, and it relates to the history of Turkish telecommunication services. Before 1994, one national company held the monopoly over this sector, the "PTT:' Afterwards, the telecommunications sector was liberalized. Although there have been efforts to enhance the competitiveness of the telecommunication's sector, much is still left on the drawingboard. The chapter entitled, "Electricity Sector Policy Reform;' co-authored by Osman Sevaloglu, evaluates the comparison between the ED countries and Turkey. Sevaioglu argues that at the time the EU put into place the electricity sector policy reform, Turkey's electricity reform was not yet introduced because of its deteriorating fiscal situation. Today, Turkey has yet 1207

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to reach full efficiency and security in its Electricity's sector supply although its fiscal problems have been solved. The chapter, entitled "Policy Reform in the Natural Gas Sector," co-authored by Cenk Pala, focuses on the natural gas sector. It discusses the existing conditions of Turkey's natural gas sector. The authors claim that only the United States and the United Kingdom can put in place the necessary conditions for a fully efficient natural gas market, such as full production competition, wholesaling, retailing, and establishing the proper conduits for transmission and distribution. There are ten ~ sions between Turkey and Russia regarding the location and control of these natural gas pipelines. Much of which are under Russian control. Therefore, Turkey needs to find alternative natural gas sources in order to achieve greater efficiency. "Liberalization of the Banking Services," co-authored by Hakan Berument and Hasan Ersel, is another chapter of this book. They claim that the lack of regulation is Turkey's banking sector is its quintessential problem. Each country has its own regulations concerning its banking Sector. This leads to a belief that their own system is more reliable than the ones in other countries. When Turkey did not adopt the Basel Core Principles, its banking sector subsequently faced a crisis in 2001. The 2008 crisis called into question the ability of supervisory authorities and the adequacy of the existing regulations domestically and internationally. The chapter, entitled "Maritime Freight Transport Sector Policy Reform:' argues that the EU's regulations on maritime transport are expensive now. Owing to the nature of the maritime freight transport, countries need to harmonize their own 2081

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rules and regulations with international rules and regulations. These are related to commercial operations and practices, rights and obligations of states, and safety and environmental regulations. The au~ thors claim that Turkey should prioritize to achieve immediate convergence with the EU's maritime freight transport sector rules and regulations would be extremely costly for Turkey. "Policy Reform in the Road Freight Transport Sector:' co-authored by Sare Ancanh, is the last chapter in Part II. The authors argue that as a result of transportation rate increases - road infrastructure is a significant indicator for economic growth. Turkey's geographical conditions make road transportation essential for Turkey's economy, so that it needs to put into place relevant regulatory rules.. At this point, Turkey is in the process of setting up an institutional framework, as well as passing legislations and regulations in line with the EU's road freight transport sector. By accepting these regulations, Turkey will enhance competition in the road freight transport sector. Finally, the last part of this book, entitled "Impact of Economic Liberalization," co-authored by Hakan Berument and Jan Michalek, indicates that although economic liberalization is beneficial for countries, it also has high costs. The cost will be high in the case of the elimination of technical barriers to trade and adjusting to the E"V's banking, maritime freight and road freight transportation. This edited book also provides an in-depth analysis of Turkey's economic liberalization which is worth reading to understand the trajectory of Turkish economy in recent decades. Erdal Tanas Karagfil, Bahkesir University Insight Turkey Vol. 13/ No. 1/2011

The Broken Olive Branch: Nationalism, Ethnic Conflict and the Quest for Peace in Cyprus By Harry Anastasiou Syracuse: Syracuse University Press, 2008, Vol. I: The Impasse ofEthnonationalism, 2008, 254 pp., ISBN, 0815631960 & Vol. II: Nationalism Versus Europeanization, 2008, 313 pp., ISBN 0815631979.

The Broken Olive Branch is a two volume book wherein the author analyses the Cyprus question through the prisms of ethno nationalism. In the first volume, through his interpretation, the author evaluates the historical origins of the Cyprus issue. According to the author, the uncritical adoption of ethnocentric nationalism is an fundamental factor in evaluating this conflict. The author points to the importance of the physical separation of the two communities on the island since 1964. The author argued that the Greek Cypriot nationalist aspiration of establishing a union with Greece (Enosis) and the Turkish Cypriot aspiration for the ethnic partition of Cyprus created the outcome of a divided island. Greek Cypriots wanted to establish a Hellenic state in which the Greeks of Cyprus would secure state power for themselves alone. Turkish Cypriots also aimed to have a territorially separate Turkish state in which they would have monopolized state power. (vol I, p.44-45) While explaining the historical reasons of the division of Cyprus, the author underestimated the suffering of the Turks of Cyprus from 1963 to 1974 during which Turks were attacked, killed, and forced to leave their homes. In fact the alienation of Turkish Cypriots goes back to 1955 when the EOKA started its armed struggle for union with Greece (Enosis). However, even before that date problems existed between the two comInsight Turkey Vol. 13/ No. 1/2011

munities. The author argued that it was not until the 1990s that Turkish and Greek Cypriots began to overcome nationalist rationals with direct citizen based contacts. 'Through these initiatives members of both communities shared their experiences and this helped to overcome prejudices. The author acknowledged the difficulties of direct dialogue, since there are issues that led to a breakdown of communication. Both communities' perception of certain events is quite different. For example, the author indicated that the Turkish side considered the Turkish Repnblic of Northern Cyprns a historically justified, legitimate independent state, while the Greek side considered it as an illegitimate breakaway state. While Greek Cypriots claimed the right of refugees to return to their homes, Turkish Cypriots considered it as an attempt to retake the northern territory, leaving the Turks without shelter. (vol.L, p.15556) These differences of opinion on key issues were' reflected in the endless negotiation process, which the book explains in detail. For example, the author states that the Greek Cypriots approach to the political settlement is based on the foundations set up by the Republic of Cyprus of 1960. The Greek side wants to maintain a strict legal continuity of the current state to any future settlement. (vol. 1, p. 186) However, for the Turkish side this approach to the negotiations is opposed to a bicommunal 1209

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and bizonal federation, which it supports. 'The Turkish side's arguments are based on the principle that no federation can be attained without first recognizing the existence of two state entities of equal legal status. (vol. I, p.188) The first volume of the book concluded with the Helsinki Summit in December 1999. The author argued that the summit's decision to grant Turkey the status of an EU candidate opened the door to a new political environment on the issue of Cyprus. Since Turkey's candidacy to the EU, the terms of references by which Turkish and Greek Cypriots negotiated have changed In the second volume of the book, the author explains global trends and the impact of the EU as a catalyst for political and civil changes in Turkey and Greece. The negotiation process through the Annan Plan and political realities of the post referendum era were discussed in the book. 'The impact of globalizing trends began to function as a vital catalyst ofsocio-political change, reducing the impact of nationalistic politics of uniIateralism and isolationism. While stressing that global trends encourage integration, the author neglected to discuss that global trends offragmentation and etno-nationalism are also very real today. This latter group ofglobal trends may have had a great impact on the Cyprus question, particularly, after the failure of the Annan Plan. AB he correctly pointed out the failure to resolve the Cyprus problem (with the Annan plan) was perhaps the greatest political setback in the history of the island. (vol. 2, P. 140) The Annan plan failed at a time when even nationalist Greek Cypriots like Maries Matsakis talked about a two-state solution. (vol. 2, p. 189) Turkish Cypriots were very disappointed by the failure of the Annan Plan to be approved 210

I

by their Greek counterparts. And they may have interpreted this failure as meaning that the Greek Cypriots do not want to live in a bicommunal and bizonaI state. Turkish Cypriots were also disappointed by the process after the referendum of the Annan Plan, since despite the Greek side's <no vote' for the plan, Greek Cypriots became a member of the EU and the comprehensive embargo against the Turkish Cypriots still continues. It should be added here that the Greek Cypriots were rewarded by the EU, while the Turkish Cypriots continue to be punished. In the two volumes of the book, the author's objective is to find and evaluate the ways and options in which the two communities can live together in the same state. However, in the first volume of the book, the description of the history of Cy_ prus and particularly the increase of tensions and conflicts since the1950's would lead the reader to question whether the two communities of Cyprus can run a common state as envisaged in the Annan Plan and other previous UN plans. As the author indicated, in 1963 the Greek Cypriots pushed forward constitutional amendments aiming to abrogate the 1959-1960 agreements in order to open the way for 'Enosis; It should be noted that besides the Greek Cypriots' goal of establishing 'Bnosis; the Greek Cypriots felt that the 19591960 agreements were imposed by the international community and they wanted an out at the first occasion. Realistically, we should acknowledge that any international agreement on the Cyprus question would have to be imposed by -the international community. And even if the both sides accept a plan for a solution, there would still be a danger that history would repeat itself Meaning, that the only reason either party Insight Turkey Vol. B/No.lI201]

or both would accept aplan would be because of the pressure from major international powers. Always leaving the possibility open that the unsatisfied side would try and change and/or reverse any potential future agreement. In the two volumes of the book, the. author gave an insightful and comprehensive analysis and he showed goodwill in his intention and recommendations for the solution on the questions of Cyprus. If the author had explained and analyzed the impact of international developments on the Cyprus question after the post Annan era, the work would have been more thorough

and relevant. Because the question of Cyprus can be compared to the continuing global trend towards separation of certain nations today, like the independence ofKosovo. Despite his lack of emphasis on the terror faced by Turkish Cypriots, particularlyin the period between 1963-1974, and the extreme hardships the embargo continues to impose on Turkish Cypriots, the author did try to objectively understand and evaluate the arguments and positions of Turkish Cypriots. Kamer KaSIDl Abant izzet Baysal University

Turkey's New European Era: Foreign Policy on the Road to ED Membership By Burak Akcapar AltaMira: The Rowman & Littlefield Publishing, 2007, 211 pp., ISBN 9780742554016,

$77.00. 'The European Commission, once asserted that «even before Bulgaria and Romania joined the Union, Turkey and Croatia, had begun joining the ED. Negotiations with Croatia may be concluded within a few years, while those with Turkey are expected to take considerably Ionger'" Yet the crux of the matter is that Turkey's full membership negotiation in the EU was not fruitful over the previous four decades. Debates over Turkey's full membership in the European Union (EU) have been gaining salience not only as a matter of scholarly interest in Europe but also as a major issue in Turkey. Akcapar's book sets out to examine the optimal future of the EU membership process for Turkey. The book seeks InSight Turkey Vol. 13/ No. 1.12011

to address the wide dimensions of the relationships between Turkey, Europe, and the United States (US). The major hypothesis that gives substance to the book is to engender the policies for Turkey, Europe, the US, and the neighbours of Europe. Akcapar's book aims to fill the gap between the EU and Turkey's full membership perceptions. His purpose is to study and analyze from various perspectives the benefits of Turkey's membership in the ED. In terms of Turkey's full membership in the EU, however, Akcapar seeks to elucidate a pivotal argument convincingly perceiving his book as an account of a case study for Turkey joining the EU as a full member. Indeed, as Akcapar claims in the first chapter, 1

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while Turkey has maintained its focus on full membership in the EU, the successive EU decision makers barred tangible progress to that effect. Similarly, it is argued that a breakthrough was achieved in December 1999, when the Helsinki Summit officially recognized Turkey without any precondition as an accession candidate on an equal footing with the other candidate states. (p. 35) Proceeding from the European future of Turkey the author points out to numerous reports in the second chapter that may have influenced the EU's thinking on Turkey's membership in the ED. The reports represent that Turkey's membership aspirations are widely seen as a threat to the ED's integration. However, Turkey is an astonishing opportunity for the ED. In the central chapters, Akcapar turns to the EU integration, and the asymmetrical policies between the EU and the US on international issues, such as the 2003 Iraqi invasion. The main innovative contribution of the book in Chapter Five is its attempt to understand the question of whether Turkey should be more or less engaged in its neighborhood (Lebanon, Iraq and Syria), which has yet to be fully resolved. Probably one of the reasons for the tendency to explain the regional role of Turkey is that the Europeanization of the foreign and security policy ofTurkey can no longer be dissociated from the imperative to engage in the surrounding region. (p. 112) In order to substantiate the nature of the US-Turkey relationship, the author argues that the US and Turkey have been longstanding allies and partners. One interesting point, which emerges from this analysis, is the importance that Turkey holds for the US and equally for the EU is not contested. However, the debate about Turkey's eventual membership in the EU is far from over (p. 163) and the negotia-

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tions involve an intricate process. The chief conclusions emerge that first, by opening the accession negotiation of the ED with Turkey, a dreaded EU "Superstate" does not emerge. Second, Turkish membership becomes meaningful wherein the EU had been seeking a more integrated foreign and security policy. Akcapar is to be commended for embarking on a complicated and extensive subject. However, his study has several shortcomings. First, from an international relations theoretical point of view, the approach of the book is not sufficiently comprehensive. Moreover, theorizing European integration could be realized by applying the English School of international relations theory;" In addressing European integration, the English School views that primary institutions could bind the internal and external integration of Europe together. Therefore, primary institutions are the key to understanding the practices within Europe such as bilateral and multi. lateral relations with other players. Among the master primary institutions, diplomacy is pertinent in that context as the author accentuates the role ofnegotiation between Turkey and the ED. Second, a further weakness is the lack ofa clear methodology. Due to the key role that language plays in negotiation, narrative analysis could probably be adopted to study policy formation. Third, regarding the data collection in this book, the majority of data has been chosen from the existing literature while the Current data on the European Commission could be a valuable source. Fourth, while Turkey's membership in the ED is examined and that is expected to find new practices for the issue, Akcapar turns to the USTurkish relationship as a comparison, but it could be argued that this is not within

Insight Turkey VoL 13/ No. 1/2011

the parameters of this study. Fifth, Akcapar exaggerates the praise Turkey is receiving by regional public opinion due to Turkey's increased activism in the region. (p.78) Although other solutions rather than the ones now adopted could have been part of the book, the book highlights the EU's approach to the world outside its borders and the current developments of the European Neighborhood policy. In the particular case of Turkey, this book provides insightful information on what is going on both from the perspective of the ED and Turkey. Researchers examining Turkey's current policies as well as those concerned

with European studies, in general, should closely read this book. , Fatemeh Shayan University ofTampere, Finland

Endnotes 1. European Commiston (2010), "Uniting a continent: enlargement': Retrieved from http://europa.eu/ pol/enlarg/indexen.htm, accessed 21 October 2010. 2. T. Diez and R Whitman R (2002), "Analyzing European integration: RefLecting on the English School- Scenarios for an encounter," Journal of Common Market Studies, vol. 40, no. 1, pp. 43-67.

The Unmaking of the Middle East, A History of Western Disorder in Arab Lands By'eremy Salt California: University of California Press, 2009, 480 pp., ISBN 9780520261709, $18.95. The term "global war on terror" is no longer fashionable. Lip service is now paid to the idea that diplomacy and development are essential components of the effort to counter Islamic extremism, and the realization is growing that making armed force the «default option" for dealing 'With terrorism perpetrated in the name of Islam is probably strengthening the hand of the terrorists. Meanwhile, on the other side of Samuel Huntington's "civilizational divide" there is an appreciation that, however brutal and mindless the U.S.-led war on terror and attendant nation-building efforts have been, and however incompetent, corrupt and repressive governments in much of the Muslim world have become, the replacement of such regimes by the leaders of those who now slaughter Westerners Insight Turkey Vol. 13/ No. 1/2011

and Muslims in the name of Islam would make matters worse than they are at present. A serious effort on both sides to act on these realizations and to find common ground across the divide would seem to be in order. "The Unmaking of the Middle East," Jeremy Salt's extensively and generally well documented, solidly analytical and deeply outraged account of Western domination of the region from Napoleon's invasion of Egypt in 1798 to the middle of the present decade, details many, if not all, the problems that make it unlikely a serious search for common ground will be undertaken, let alone succeed. Professor Salt teaches in the political science department at Bilkent University, Ankara and has been involved with the Middle East since arriving in Bei-

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rut as a young journalist in 1965. Halfway through the book's introduction, he refers to "the similarities across the centuries" of the ways in which Western intervention in the Middle East has been justified as well as the existence of"a certain pathology" involving who "we" and "they" are, what "we are entitled to do, and how " they" must respond if they are to avoid punishment" This "cultural substructure" is the bedrock on which the four parts of Professor Salt's book rest. Professor Salt uses the two chapters that make up the first part of the book to "set the scene" for his denunciation in the remaining three parts of the Western policies that in his well- founded view have unmade the Middle East. He takes Samuel Huntington and Bernard Lewis, who first spoke of a clash between Western and Muslim civilizations, to task for making plain their view that the responsibility for the creation of what Huntington called Islam's "bloody borders" rests with the Muslim world. He goes on to point out that, for a century and a half at least, most of the blood shed in the Middle East was Muslim and was shed by Westerners. Descriptions of the brutality of the French occupation of Algeria begun in 1830, the devastating British naval bombardment of Alexandria in 1882, and the slaughter of the Sudanese Khalifas army at Omdurman in 1898 drive home this point. Salt notes that the terms "West" and "Middle East" are of recent vintage and agrees with the great British scholar H.A.R. Gibb that the two so-called "worlds" have been closely related both before and after the rise of Islam. The transformation wrought by the Renaissance, Enlightenment and Industrial Revolution in Europe were translated by European governments into imperial policies that benefited those gov2141

ernments at great political, economic and above all human cost to the people of the Middle East. The five chapters of the book's second part cover the breakdown of the Ottoman Empire and the ensuing domination of the Middle East by Britain and France through the "civil war along the Potomac' that preceded the U.S. decision to recognize the State of Israel. Salt describes the dismemberment of the Empire, both directly by various members of the Concert of Europe and via the secession of Ottoman provinces in the Balkans and beyond with encouragement and material support from European governments. Events such as the massacre of 18,000 Armenians in Adana in 1909 are briefly mentioned, but Salt is intent on telling the other story - that of the great suffering of Muslims in the Great War, which lasted for the Turks from 1912 to 1923. A chapter describes the unsuccessful British project in Iraq. first as the League of Nation's Mandatory power and then as supporter of the unpopular Hashemite monarchy and its most prominent politician, Nuri al Said. Professor Salt devotes nearly half his book to Palestine and 'Israel, and his critique of British and later American policy there is withering. Sir Arthur Balfour described British commitments in Palestine as "incompatible with facts;' and a major "incompatibility" is his 1917 Declaration, as Foreign Secretary, that "His Majesty's government view with favor the establishment of a national home for the Jewish people" but that "nothing shall be done which may prejudice the civil and religious rights ofexisting non-jewish communities" there. The British allowed enough Jewish immigration into Palestine to reduce substantially the initially overwhelming majority of the Insight Turkey Vol. 13 I No. 1/2011

"existing non-Jewish communities;' dealt harshly with those communities when they began armed resistance to "double colonization' by the British and the Zionists, and then beat a retreat as their Jewish proteges turned against them. Most of the rest of the book traces the development ofAmerican policy in various Middle Eastern "hotspots;' primarily in Israel and Palestine but also in Lebanon, Iraq and the Iran-Iraq war. Israel's rise from its dramatic beginnings in 1948 to its present position of regional military supremacy and economic power and its status as the United States' dosest ally in the region and leading recipient of American aid are chronicled, as are the ruthlessness of its attacks on its neighbors and periodic duplicity in its dealings with the U.S. government. United States policy in the region, from failure to restrain Israel from attacking Egypt in June 1967 to its own invasion

and occupation of Iraq 26 years later are condemned in bitter and generally welldocumented detail. At the end of the book, Professor Salt asks the reader to judge whether 9/11 will one day be seen "as the tocsin that sounded the end of the new American century" and whether this would be "good for all of us:' In presenting its case, the book is not objective; unlike those of the Israel and the West and its friends in the region, which are discussed (and occasionally distorted) in detail, the atrocities, depredations and duplicities of Arab governments and groups receive little or no attention. That said, Salt's questions are legitimate. His book should be pondered by those in a position to act in a way that may someday make the answers to his questions something other than "yes:' Charles Dunbar, Boston University

Egypt, The Moment of Change Edited by Rabab al-Mahdi and Philip Marfleet London: Zed Books, 2009,186 pp., ISBN 9781848130210. Egypt plays an undeniably crucial role in Middle Eastern politics and culture. Its strategic importance and inextricably close relationship to the United States warrant scrutiny not only ofthe current political and economic situation but also of possibilities for revolutionary change. The eight contributors to Egypt: The Moment of Change provide a dear and concise depiction of how events and decisions from the era of Nasser through the present day have led to the untenable situation ordinary Egyptians face. Geared towards the lay reader while InsightTurkey Vol.l3INo.1120!!

retaining academic rigor, this collection of essays documents the horrific consequences of US involvement in Egypt, particularly how neoliberal economic policies were applied in the context of a blatantly authoritarian regime. This volume focuses not on "the economy or political system as such" but rather highlights the ways in which Egyptian "social movements" coalesce within a limited and repressive political framework. The contributors themselves range from wen established professors such as Joel Beinin and Ray Bush to

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Ahmed El-Sayed El-Naggar, an economic analyst and Aida Seif El-Dawla, a professor of Psychiatry and founder of the El-Nadim Center for Psychological Management and Rehabilitation of Victims of Violence. All of the contributors, however, are defined as "activists engaged with the phenomena they discuss" or strongly linked to their subject matter "through extensive personal observation and ties with the people they write about:' (p.Ia) Despite an avowed unity of purpose, the eight chapters which comprise this work range widely in terms of their level of detail, readability, and the degree of importance they ascribe to different social movements. The first chapter "State and Society" by Philip Marfleet provides a strong, historical overview of the Egyptian state apparatus from the free officers to the present day. Marfleet focuses on the repressive tactics of Egyptian nominal or rather "low intensity democracy" as well as the possible avenues of rebellion open to the Egyptian people. In contrast, the second chapter "Economic policy: from state control to decay and corruption" by Ahmad El-Sayed EI-Naggar seems too detailed in its account of the economic shifts in the past several decades of Egypt's history. Bl-Naggar discusses how Nasser's state capitalism gave way to Sadat's Intifah and Mubarak's «free-market principles without concern for social welfaref'(p.So) El-Naggar then highlights problems of unemployment, corruption, inflation, and general economic malaise. While this subject matter is clearly instrumental to the book's argument that change is both necessary and inevitable, its varied statistics could prove overwhelming to the lay reader. The third chapter, "The land and the people" by Ray Bush continues the discussion of Egypt's 2161

economic situation by examining the con': sequences of government policy towards land and land ownership since Nasser's reforms. As Bush demonstrates, Nasser's incompletely implemented policies of land ownership that were designed to benefit the fellahin or peasant class at the expense of the elite class of landholders, which had amassed their estates in the colonial era. Nasser's land reform eventually gave way to Mubarak's neoliberal economic tactics, which often target landholding peasant farmers, leading to increased food prices, a stagnant economy, and a "guarantee of continued communal struggles:' (p.67) Joel Beinin's chapter, "Workers' struggles under 'socialism and neoliberaltsm," Rabab EI-Mahdfs "The democracy movement: cycles of protest" and Sameh Naguib's "Islamism{s) old and new" describe three types ofsocial movements, their protests against Mubarak's regime, and their potential to eventually bring about that regime's dissolution. Beinin focuses on the strikes undertaken by tens of thousands of Egyptian workers, particularly blue-collar employees, during the past decade. Beinin notes that although these workers often win fiscal concessions, political gains, such as democratic reforms or requests for a representative government are few in number, receiving little support or success. Similarly, Naguib discusses the power of the Muslim brotherhood to unite disparate classes of society, including but not limited to the "lurnpen intelligentsia," Since the 1970s, according to Naguib, Islam has become a catchall solution for the myriad problems everyday Egyptians face. Despite documented populist appeal of the Muslim brotherhood, and its ability to mobilize the Egyptian population, Naguib concludes pessimistically that the movement itself Insight Turkey Vol. 13/ No. 1/2011

will not survive "conditions of extreme repression" or "political and social crises:' (p.1l9) Beinin and Naguib's analyses contrast radically to Rabab El-Mahdfs optimistic chapter on Klfaya, the democracy movement in Egypt. El-Mahdi even attributes the workers' struggles (which Beinin links to financial constraints) to Kifaya 's influence. (p.lO!) EI-Mahdi highlights the few successes of the Kifaya movement however, her emphasis on the power of this democratic movement to possibly affeet fundamental change in Egypt's government may be a nod towards the sympathies of an American audience. The final two chapters are the most compelling of the work. Aida Seif El-Dawla depicts the "culture of abuse" (p. 121) perpetrated by Egypt's police and security services. The state of emergency which has existed in Egypt since 1981 provides the legal justification for this abuse, trying civilians in military courts without possibility of appeal, harassment and mutilation of women, and the systematic torture of political dissidents, the powerless and the poor. Moreover, Mubarak's willingness to

comply with the American policy of ex ~ traordinary rendition perpetuates and intensifies the torture of Egyptians as well as prisoners in US custody. Anne Alexander's chapter similarly focuses on the fraught relationship between Mubarak's regime, the United States, the Palestinians, the Arab states, and the Egyptian people. The billions of dollars poured into Egypt by the United States have contributed to economic, not political liberalization. As a client state, Egypt has proved an unwieldy ally, particularly as its people protest Egypt's ties to Israel and the US. As this volume clearly illustrates, the conditions in Egypt do seem untenable: no freedom of speech, freedom of assembly, freedom of the press, accountability to the law: Yet, this work raises more questions about the possibility for change than it answers. Egypt's "moment of change;' so clearly desired by the contributors to this informative book, will remain out of reach until truly radical shifts occur not only in Egypt but in the world at large. Hilary Falb, UC Berkeley

Lebanon, Liberation, Conflict and Crisis Edited by Barry Rubin New York: Palgrave MacMillan, 2009, 244 pp., ISBN 9780230605879, £60. This reviewer wonders why Palgrave Macmillan decided to publish this book. Was the point to produce a neo-conservative distillation of anti-Syrien, anti-Hizbullah, and anti-Iranian prejudices in one volume? If that is the case, it has succeeded admirably. There are one or two good co tributlons, notably Mark Farha's short but Insight Turkey Vol. 13/ No. 1/2011

balanced study of Lebanese. demographics and Charles Paul Freund's disquisition on Lebanese popular music. Tony Badran and Nimrod Raphaeli write knowledgeably, respectively, on Lebanon's militias and its economic problems, but too many of these essays could have come straight out of an Israeli or American think tank. No sur-

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prise, then, that this is the precise background of many of the contributors. The accusations against Syria by Rubin and William Harris, a Professor at the University of Otago in New Zealand and the author of two chapters ("Reflections on Lebanon" and 'Lebanon's Roller Coaster Ride"), centre on the assassination in 2005 of Lebanon's former Prime Minister, Rafiq Hariri, and Syria's alleged desire to dominate Lebanon by destabilising it. According to Rubin, Hariri was killed as an act of retaliation by Syria due to the pressure build up inside Lebanon because of the withdrawal of Syrian troops. Harris calls Syria the 'patron of Hanrfs assassins. The basis for their accusations is the first report by Detlev Mehlis, the German prosecutor appointed by the UN International Indepen ~ dent Investigating Commission. The crux of this manifestly shoddy and unprofessional report is that as Syrian intelligence agents were everywhere in Lebanon, the assassination could not have happened without Syria's knowledge and therefore, ipso facto, Syria must have organised it. Meblis does not even cast a glance at other possibilities. Israel and the CIA have a long history ofassassinations or attempted assassinations in Lebanon. Their agents are also everywhere. In March1985, somewhere between 80 and 105 people were killed in an unsuccessful CIA attempt to assassinate Sayyid Muhammad Hussein Fadlallah, the so-called 'spiritual mentor' of Hizbullah, with a car bomb planted in Beirut near his apartment and the mosque where he preached every Friday. Mossads record ofassassinations in Lebanon and elsewhere is too well known to require further comment. Detectives surely always begin their investigations by looking at all possible suspects. However, Mehlis never bothered. He directly accused

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Syria. The assassination was the lever used by the US and Israel to get Syrian troops out of Lebanon. Would Syria have handed its enemies such a weapon, and having had its name blackened by the Hariri assassination, would it then have proceeded to kill even more 'anti -Syrtan' political, military and media figures? On the basis of cuo bono, whose interests did the Hariri killing serve? Definitely not Syria's. The accusations against Syria in this book have been overtaken by some hard facts. In April 2009, a little over a month after the international tribunal took over the prosecution of the the four 'pro-Synan' Lebanese security figures who had been arrested for alleged complicity in the Hariri assassination, Judge Daniel Fransen ordered that they should be released because of lack of evidence. No one else has been charged. No connection has been established between the assassination and the Syrian government that would stand up in court. As for Syria wanting to destabilise Lebanon, Rubin and Harris do not mention that Syria was invited into Lebanon in 1976 as a 'deterrent' force by the Arab League. No one was happier to see Syrian troops on the ground than the Maronite militias, which were at the point of a comprehensive defeat at the hands of the combined Palestinian-Lebanese leftist forces. Hafez al Assad's objective was not to destabilise Lebanon but to stabilise it, and prevent any radical change in the power balance that that would give Israel a pretext for intervention. In October 2008, Syria finally extended diplomatic recognition to a country it supposedly wants to destabilise or take over. In December 2009, Hartrfs son and Lebanon's recently elected Prime Minister, Saad al Hariri, visited Damascus, where he told President Bashar al Assad that he Insight Turkey Vol. 13/ No. 1/2011

was looking for a strategic relationship with Syria that would enable the two COUlltries to defend themselves more effectively against Israel. Could it be Hariri himself is now having second thoughts about who it actually was that killed his father? In his own essay on Lebanon ("Hizballah in Lebanon: Between Tehran and Beirut, Between the Struggle with Israel and the Struggle for Lebanon"), Eyal Zisser writes that a 'look' at Lebanon after the attack by Israel in 2006 'reveals a shattered state on the verge of a civil war that threatens to tear it apart: With regard to Hizbullah, the fighting "brought the organisation's era of glory and successes to an end:' In Zisser's summary, "During and after the fighting the organisation found itself in a tough uphill struggle to preserve and restore its status in the Shia community, in Lebanon and in the whole Arab World:' In fact, Hizbullah's courage in standing up to Israel was supported across the Arab world throughout the war and afterwards by Sunni and Shia alike. There remains no more popular figure in Arab countries than Hasan N asrallah. He was unpopular only with leaders who have no popular standing themselves, notably Husni Mubarak and King Abdullah of Saudi Arabia. In Lebanon, Hizbullab's alacrity in providing aid to the victims of Israel's aerial onslaught on the towns of the south and Beirut reinforced its standing amongst the Lebanese people in general. Hizbullah has since proceeded to develop ecumenical ties with Lebanon's Christian communities and with the Druze, whose leader, Walid Iumblart, recently abandoned the anti-Syrian alignment in favor of a political alliance with what is now the Lebanese mainstream. Hizbullah is now broadly seen as a national movement of defence and resistance, with probInsight Turkey Vol. 13/ No. 1/2011

ably 25 per cent of its support coming from Christians. Israel's 'allies' and agents inside Lebanon, especially the Falangists, have been completely marginalised. Lebanon, far from falling apart, as one might expect from reading Eyal Zisser's chapter, is united as never before, and for that reason is regarded by Israel as more ofa 'threat' than ever before. Nowhere does this book take into account Israel's violent, destructive and subversive role inside Lebanon for the past six decades. Its invasions, incursions, and assassinations have taken the lives of tens of thousands of Lebanese civilians. There is no act of Hizbullah "terrorism," which even begins to compare. 'What has confounded Israel is that none of its policies have led to a Lebanon divided or a Lebanon under the control of a puppet government but to a Lebanon that is much stronger than before. In the 1980s, Israel failed to impose its will on Lebanon because it could not understand what Hizbullah does understand: no faction can afford to step beyond the consensus that lies at the historic heart of Lebanese stability. In 2000, Israel's long occupation of southern Lebanon was brought to end by Hizbullah's . And not by the UN, whose repeated calls for withdrawal Israel had ignored. Its onslaught on Lebanon, in 2006, took the lives of 1400 people, one third of them children, an infamous performance to be repeated during its attack on Gaza (December 2008 - January 2009). To this day, nothing Israel has done in Lebanon has worked out. On the contrary, its enemies are stronger than ever before. Naturally this book ignores the Israeli origins ofLebanons serial crises, Palestine, and the expulsion of most of its people in 1948. Lebanon was always going to have its problems, as a consequence of 1

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the curious 'confessional' system devised by the French in the 1920s, but once the Palestinians living in refugee camps inside Lebanon turned to armed struggle to regain their rights, as they inevitably would, it was the so-called 'Palestine problem; which would be far more accurately described as the problem of Israel, that almost destroyed it. During the onslaught on Geza, the Israeli-born historian Avi Shlalm wrote that he found it "difficult to resist the conclusion" that Israel had become a rogue state.' Others would say it was a rogue state from the beginning. It has ignored international law, insofar as the human and civil rights of the Palestinians are concerned, and Lebanon no less than Gaza has suffered terribly as a consequence of its ruthless policies. Sooner or later Lebanon's newly-established unity will be put to the test. Israel is an extremely powerful country; which has never hesitated to use any means at its disposal, diplomatic or military; to achieve its ends. Senior figures in the Israeli military establishment have threatened that the enemy next time will not be Hizbullah but Lebanon itself and that the 'Dahiyeh strat-

egy' (Dahiyeh being the predominantly Shi'a suburb of Beirut that was pulverised from the air during the war of 2006) will be repeated on an even bigger scale. Notice has been served and both Hizbullah and Israel are preparing for the next round. Insofar as recent political history is concerned, all the elements that would enable the reader to reach a balanced understanding of the causes of the trauma through which Lebanon has passed in the past three decades are missing from thts book. Lebanon. Liberation, Conflict and Crisis should be regarded for what, at its centre, it is, an ideologically focussed work that uses Lebanon as a platform to carryforward the regional and global campaign mounted in the US and Israel against Hizbullah, Syria and Iran. Jeremy Salt, Bilkent University Endnotes 1. Avi Shlaim, 'How Israel brought Gaza to the brink of humanitarlan catastrophe: Guardian, 7 January 2009.

Spies in Arabia, The Great War and the Cultural Foundations of Britain's Covert Empire in the Middle East By Priya Satia Oxford: Oxford University Press, 2008, 458 pp., ISBN 9780199734801. Spies in Arabia is a much awaited book on the British in the Middle East during and in the aftermath of the First World War. It avoids focusing on Lawrence alone and gives a fine and comprehensive picture ofthe cultural background ofBritish agents employed in the Middle East and in Iraq 20

I

in particular. Satta's compelling narrative, clearly the outcome of extensive research and penetrating thinking, tells us how the preconceptions of Arabia and its inhabitants became the guiding principles that led the actions of British agents and officials in . the Middle East from the beginning of the Insight Turkey Vol. 13 / No.1 /2011

twentieth century throughout the interwar era. Satia's book is a work of British cultural history that intersects several fields -lvliddIe Eastern history, military history, diplomatic history, and history of technology to mention a few - making it a relevant and stimulating work. Satia's main contribution is to expose the British creation of a "covert empire" after the end of the First World War in the Middle East and particularly in Iraq. She argues that this was a new strategy of colonial control implemented through the work of intelligence, newly created air control, and official conspiracy theories. The covert empire was, according to Satia, a more suitable and sellable concept of Empire to the general public opinion who was left in the dark in relation to foreign -politlcs in the interwar period. Satia, in her work challenges the over-popular picture of Britain in the interwar period as a country where democracy was defended and developed against the emerging enemies of Bolshevik Russia, Fascist Italy, and Nazi Germany. In two parts, as the book is divided, Satta at first discusses the foundations of the idea of covert empire, which according to her were generated in Arabia. In part two, Satia shows how the covert empire founded in Iraq worked, defended itself, and became a paradigm to be exported in other contexts. This work follows a chronologicalthematic approach: chronologically, Satta discusses the period from the pre-war era to the end of the First World War, but remaining within the historical boundaries of the 1930s. Thematically, she jumps back and forth from Britain to Arabia showing how British intelligence exploits in the region have been shaped by a particular definition of Arabia and how the outcome of Insight Turkey Vol. 13 / No.1 /2011

the work of the agents on the ground was used in the formulation of policy making on alarge scale. As the reviewer is a historian of the Middle East, much of the focus of this assessment of Sana's work will be on British intelligence in the Middle East and air control implemented in the newly cteatednation-state of Iraq. The book opens with a thorough discussion of the British intelligence community at the beginning of the twentieth century and how their Edwardian imagination shaped the conceptualization of Arabia. Satia convincingly shows how these agents made Arabia and their adventure in the Orient a tool to exploit for launching their literary careers. (p. 61) The Arabia they built was mainly a fiction, an artistic space, which with the outbreak of the war also became a strategic region, a place that according to Satia only these agents were able to understand and interpret. These agents, using Satia's words, came 'to think like an Arab' (p. 100) claiming a knowledge that would give them access to power: their own power that would secure them a position of influence as well as the power of the state itself. These agents not only provided the British with knowledge that would enable them to dominate this space, but according to Satia their activities, modes, and reports normalized the idea of the Middle East as a space for intrigue and above all. As she shows in the second part of the book, the Arabs were portrayed as a race that saw violence as a central element oftheir culture, which they very much needed and invocated. To Satia's credit, the first part of the book really represents an innovative approach to a popular subject: British intelligence in the Middle East that often only revolved around Lawrence and the Arab Revolt. Though Satia's narrative is fresh

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and comprehensible, at times the reader may feel overwhelmed by quotes and sidestories that are a little bit redundant- and superfluous. What Satia really achieves in this fust part is to profoundly analyze the exploits of the British intelligence community and to see how these have been employed in the long term. The exploitation of intelligence gathering in the formation of the covert empire is the focus of the second part of the book. Satia opens this part discussing how the understanding of Arabia turned into conspiracy theories and how contemporaries made sense of those events. (p. 203) Using the tools of a deep cultural analysis, Satia exposes the ways in which British officials and media tried to explain Arab rebellions against the same British rule. Conspiracy theories came to be official theories supported by the same agents, who operated in the region during the war and remained the expert ears and eyes in the Middle East. This environment, according to Satia produced and immanent paranoia, which was partly defied through a new technology of surveillance: air control. This new means of surveillance was not only cheaper and more convenient but as Satia explains, its development also had cultural reasons, as agents on the ground defined Iraq as a suitable place for

aerial surveillance. (p. 240) Air control was intended to be driven by intelligence and to provide the basis of an empire's hold by agents and not military troops. Clearly air bombardment was very much a regime of terror, which proved very difficult to defend vis-a-vis public perception, though Satia shows how paranoia remained a very strong -rationale to defend covert colonial power. (p. 277) "Spies in Arabia" clearly points the finger at the British and exposes how state led terror campaigns were the byproduct of the culture produced in war-time Britain and the Edwardian mentality. Satia's work, though lacking a discussion on the recipients of British policies, clearly not the focus of Spies in Arabia, persuasively tells us of how Arabia and more precisely Iraq was exploited as a guinea pig in the new business of covert empire building. Though Satia closes the book reminding the readers that history does not repeat itself, she clearly suggests that in light of current events in the region it would be wise to draw some lessons from playing imperialism in Arabia. Roberto Mazza Western Illinois University

Gatekeepers of the Arab Past: Historians and History Writing in 20 th Century Egypt By Yoav Di-Capua Berkeley: University Press of California, 2009, 389 pp-. ISBN 9780520257337.

·To study historiography as a prism that elucidates a society's wider developments has experienced a remarkable upsurge

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over the last decades and has produced a number of fascinating works. In the Middle East, -it is especially history writing in Insight Turkey Vol. 13 / No.1 /2011

modern Egypt that has been studied by authors such as]. Crabbs, Y. Choueiri, and 1. Gershoni. Consequently, the work under review raises the question of why we need· yet another study on this subject. And, indeed, the author sometimes embarks on a well-trodden path and repeatedly discusses material that is all too well known. However, he succeeds in producing a unique and original account of the field by setting this material into a sophisticated framework and by integrating the relevant theoretical scholarship into his analysis. 'Thefirstchapter"HistoricisingOttoman Egypt, 1890-1906" deals with the formative period of modern Egyptian historiography and outlines the book's main argument. The author proposes 'historicism' as the Single explanatory framework for the disparate trends that started to emerge during this period. Historicism - or as he repeatedly describes it - the mode of "thinking with history;' revolutionised historical thinking and changed the perception of time, space, and subjectivity in society at large. In this period, traditional forms of history writing (such as chronicles) came to an end and the nation became a central concept. Closely intertwined with the rise of the nation as the subject of historical inquiry, the "founder paradigm" was developed, which set Muhammad Ali's reign as the starting point of modern Egypt. This transformation of historical thinking is traced in more detail in Chapter 2 (bearing the rather enigmatical title "Talking History, 1906-1920"). With the deOttomanization of the Egyptian-Ottoman elites, writers created a firm link between the concepts of nation, history, and modernity. Based on a new political language and acting within a new semantic field, influential historical works favoured RepubInsight Turkey Vol. 13 / No.1 /2011

licanism, undermined the monarchy and set new rules for the politics of historical representation. 'The third chapter on the 'AbdIn archive in Cairo focuses on the crucial space for royalist historiography in the 1920s and 1930s. This is one of the book's most fascinating sections and it shows in detail how the archive was represented as the metaphor of a modern Egypt. At the same time, it served as a workshop for the massive royal project of producing an authoritative account of the emergence of modern Egypt. The author convincingly argues that the organisation of the collections, the daily working processes and the underlying assumptions all fed into the production of historical knowledge that prioritised European influences and royal agency. Concomitantly, the exclusion of specific sources (such as endowments records) m:irrored a view of history where subaltern groups played no role. The following chapters discuss the period from the 1930s up to the end of the monarchy in 1952. Here, the author discusses the intense rivalry between royalist and nationalistic interpretations of history centred on the figures of Shafiq Ghurbal and 'Abd al-Rahman al-Rafi'I. Despite the fierce conflicts - often accompanied by state intervention in tenns of censorship and restricting access to sources - the two 'schools' shared the basic assumptions of the 'founder paradigm'. In this period Ghurbel was able to control the emergence of a professional historiography with its nexus of university departments, libraries, conferences, specialised journals etc. From the 1940s onwards historiography became - also due to a more radicalised politicallandscape - increasingly politicised. This politicisation found its expression in 1223

Book Reviews

the rise of Marxist historiography and the increasing tendency of historical texts to function as "national allegories:' Chapters 7 and 8 deal with historical writing under Nasser's regime. After the 1952 revolution history turned into a practise of justifying and celebrating the political present. Within a historical field that reduced the Egyptian past to a series of key events (1798, 1882, 1919, 1952) and that was not able to develop a pan-Arabist past, Marxist historiography became the most innovative approach. This historiography was able to fill to some extent the void left by the dismantling of liberal networks of historiography and at the same time successfully kept its distance from Nasserite historiography. When the rather sterile Nasserite historiography entered into crisis in the 1960s, it was consequently Marxist-orientated approaches that were able to step in. In his final chapter 'Authoritarian Pluralism, 1970-2000" the author argues that new and previously marginalised groups could insert themselves into Egyptian historiography. However, the regime's practices led to a historiographical field that was methodologically poorer and culturally more provincial. This is a well-written book that is in most parts convincingly argued. At some points the author tends to ascribe too much importance to his chosen field of study. Many historians certainly would wish that history writing was for instance, "the foremost medium through which [modernity] was articulated," but the author does not offer convincing proof for such assertions. Slightly irritating is as well the focus on historical works that study the modern period. A large part and arguably the most important part of Egyptian historical scholarship was devoted to pre-

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Book Reviews

modern periods (the author himself cites the overwhelming number of MA and PhD theses on premodern subjects in the first half of the 20 th century). The reader wonders why the author does not turn to these works that have yet not been studied in detail. As the historians, who are studied, wrote in the zo- century many of them are still alive or at least their family members and students would have been available for interviews. However, considering the author's background it might have proven difficult for him to gain access. Another of the book's weaknesses is that it remains in some places strangely abstract and often lacks detail that could have been filled with fieldwork. My final quibble is that the author shows in much detail the schematic periodization of many historians that subscribe to a top-down view of history. At the same time, the periodization that Di-Capua himself adopts follows the main political events of modern Egyptian history. This leaves very little room for historiography and other fields of intellectual activity as autonomous rooms of human activity. Rather, the periodization implies that historians and history writing developed in dependence on political developments. However, Di-Capua has produced a challenging and highly informative account of modem Egyptian historiography. He makes an interesting set of arguments that will be on interest for students of the modern Middle East and for students of intellectual history more particularly. The author deserves special praise for his wide reading of secondary literature, especially in Arabic, that he puts to very good lise. Konrad Htrschler, SOAS Insight Turkey Vol. 13 / No.1 /2011

Speaking of Iews: Rabbis, Intellectuals, and the Creation of an American Public Identity By Lili Corwin Berman

Berkeley: University of California Press, 2009, 266 pp., (Including 59 pages of notes, a select bibliography, and index). ISBN 9780520256 811.

Speaking of Jews chronicles how Jews explained themselves to non-Jews in the United States from World War I through the Civil Rights era. The basic thesis is that in considering how to talk about being Jewish to non-Jews, the Jews were also searching to find a definition for themselves as to what exactly it meant to be Jewish in contemporary America. Lila Corwin Berman, therefore, focuses on non-Orthodox Jews, because their lives are not principally focused on following the precepts ofreligious law, to the relative exclusion of secular society. Her study relates to the overwhelming majority of Jews in America, who wish to be thoroughly involved and integrated into American society. Berman begins her analysis by focusing on the manner in which Reform rabbis and leaders of the Jewish Chautauqua Society, an organization formed in 1893 whose mission is "to provide knowledge and education about Jews and Judaism, to bring about an appreciation of the Jewish people, their history, religion, and culture, and to build bridges of understanding between peoples of all faiths and cultures:' (http://nftb.org/national_programsljcs. shtml, accessed September 15, 2010). They viewed Judaism as the basis for American values. The dilemma for the Jews was how to justify their existence without having the explanation undermine the continued existence of a separate people. Jewish missionaries and Chautauqua activists placed Insight Turkey Vol. 13 / No.1 /2011

Judaism at the center of modern day ethics and formulated it as a guide for Jews and all people wishing to adopt democratic principles. Rituals and religious practices were downplayed inasmuch as they separated Jews from the larger society. Berman points out that the emphasis on ethics as an argument for acceptance could have set the stage for the demise of the Jews as a separate people. Instead, this group advocated that being Jewish and being American were defined as almost one and the same. The fact is, though, that the Jews were not accepted as equals, and the negative experience they underwent as a non-Christian minority in the United States ensured their continuity as a separate entity. Pollowing this very perceptive analysis, Berman then moves to the heart of her book, and talks about how Jews utilized the social sciences, and in particular, SOciology, to help define Jewish existence in the United States. The basic argument is that Jewish SOciologists studied and discussed the role of Iews as part of an American ethic pattern that sought to categorize the Jewish experience in universal and American terms. The upshot is that Jews had a legitimate place in American society as a separate, but equal group. The independent existence of the Jews was based on SOciological Jewishness-a central concept of the book - meaning the manner in which Jewish patterns and behaviors distinguish Jews from non-Jews. Berman focuses on this impor1225

Book Reviews

tant idea throughout the book and discusses the problematics of such a formulation of Jewish identity, as the sociological basis for Jewish existence as a separate group undergoes change over time. Indeed, it can disappear completely. The issue of intermarriage for Jews is particularly relevant to this as it becomes difficult if not impossible to justify a preference for endogamy once the basis of sociological [ewishness breaks down. That is to say that when there is really little religious or social distinction between Jews and non-Jews, how does one frame a preference for in-marriage as a legitimate claim? This is an issue that American Jewry has to grapple with, and, as Berman discusses quite thoroughly, it has led the Reform and Conservative denominations to reconsider their definitions of [ewishness and how to reach out to non-Jews and to welcome religious converts. Lila Corwin Berman's study is a very insightful analysis of how Jews in the United States react to their environment and seek to be accepted as equals. In her very significant contribution to understanding the construction of Jewish identity in the

Book Reviews

United States, she points out constantly how the explanations that Jews give to their non-Jewish neighbors become an important element in their definition of Jewishness for themselves. Such a process can be expected to take place for other religious groups and in other societies as well, and it is for this reason that the value of this book extends beyond the specific case it studies. For example, in recent years Muslims in the United States and in Europe have had to explain their religion in an environment that is at times quite hostile to them. This volume sensitizes us to the analysis that can be done to inquire whether the definition of Islam undergoes change in light of the explanations given to non-Muslim neighbors. Berman also provides us with an interesting theoretical basis for undertaking a comparative study of Jews (and members of other religions) in various societies, to see how explanations affect religious definitions and lead the same religious movements to develop variations in form and content in different societies. Ephraim Tabory, Bar Ilan University

Archaeology of Religions, Cultures and Their Beliefs in Worldwide Context By Sharon R. Steadman Walnut Creek, California: Left Coast Press, 2009, 348 pp., ISBN 9781598741544, $34.95.

The archaeology of religion has generated increased interest among social scientists involved in the scientific study of religion. Sharon Steadman recognizes that most of the cultures discussed in this interesting text did not recognize the existence 2261

of "religion," It is largely Western intellectuals who have sought to elevate "religion" as a phenomenon ofhuman society in need of clarification by social scientists. However, Steadman rightly explores the world views of ancient cultures insofar as they overlap Insight Turkey Vol. 13 / No. 1/2011

with what contemporary anthropologists recognize as religion. The text is divided into six parts, with varying numbers of chapters per part. Part I introduces Method and Theory in the Archaeology of Religion. In three chapters it introduces the reader to the Archaeology of Religion, an overview Anthropology of Religion, and Interpreting Religion in the Archaeology Past. These chapters provide the reader with a context within which the archaeology of religion is viewed, as a vital framework for understanding what modern social scientists view as religious and cosmological world views. Part II discusses the emergence of religion in human culture, beginning with Shamanism and following through with a study of the Neanderthals and the Rock Art of Africa and Australia. In each case, the focus is upon how artifacts can be used to infer the world views of the cultures represented by the residuals of cultures long past. Parts III through VI discuss religions in the Americas, Europe, South and Southeastern Asia, Africa, and the Middle East. Each region is treated with a balanced perspective of what archaeologists know and what they can reasonably speculate about the religious and cosmological beliefs associated with these regions. The organization of the chapters in Part III is both geological and chronological making for an effective structure and summary of a massive amount of information that is more than effectively presented in a succinct fashion. Throughout the text, Steadman draws parallels between the beliefs ofvarious cultures. For instance, students who are likely familiar with the story of Noah's ark will be perhaps surprised to find that it bears Insight Turkey Vol. 13 / No.1 /2011

a remarkable similarity to Ut-napishtim's account of the flood story in Gilgamesh. However, Steadman wisely acknowledges such, parallels without demeaning the value of flood narratives in any tradition. Likewise, parallels between the early life of Moses and that of Sargon, King of the Akkadians are acknowledged with the reader left to infer reasons for such close parallels. The exploration of cannibalism in various ancient traditions is seen as a reasonable outcome of cosmological beliefs, however distant from those acceptable to modern sensibilities. The overall effect is to present the reader with the fact that religious and cosmological beliefs are not simply derivative from a single set of discreet empirical facts, but form the raw material from which archaeology seeks to illuminate the institution, values, and ideal of societies perhaps distant from our own in chronological time, but no less mirrored in their religions and cosmologies than our own. Sharon Steadman has produced a highly readable and instructive text. It is most suitable for use as a primary text in the archaeology of religion and as a supplementary text in courses dealing with the social scientific studyofreligion. It is arichlyillustrated, and also provides valuable maps for each of the major geographical areas discussed in the text. In addition, it provides a brief list of useful sources for each of the major chapters of the text. Finally, there is also a useful reference list and index at the end of the text. This is a student friendly text in every way and the publication of a reasonably priced paper edition will hopefully make this a text many instructors will adopt to the benefit of their students. Ralph w Hood Jr. University a/Tennessee at Chattanooga 1227

Book Reviews Book Reviews

Turks in Europe, Culture, Identity, Integration Edited by Yalip Kilciikcan and Veyis GUngor Amsterdam: Tiirkevi Research Centre, 2009, 625 pp., ISBN 9789077814130, €30.

Turks in Europe, Culture, Identity, Integration, is a book of collected works comprising 23 articles written by experts from a variety of fields such as sociology, political science, anthropology and cultural studies. It is the largest collection of articles printed so far based on original research and field work about residents of Turkish origin residents in Europe. It is obvious that in view of the title of the book, readers would have different expectations from the book based on their point of interests, particularly those dealing with history or international relations as well as political science. By looking at similar titles published so far, like John Russell's The Establishment of the Turks in Europe, An Historical Discourse (1828), Noel Buxton's Europe and the Turks (1907), William David Allen's A Sketch Study: the Turks in Europe (1919) or Gaston Gaillard's The Turks and Europe (1921), one's findings from this book is different based on his/her expectations due to area of expertise and research interests. In contrast to the studies cited above, which are in fact mainly written with orientalist perspectives, focusing on history, collected essays in this book deal with recent issues facing Turkish migrant population in Europe. Turks in Europe is divided into four parts. The first part of the book is about the Turks as new citizens of Europe in which the authors mainly discuss about the formation of Turkish population in various European countries such as Austria, Belgium, England, France, Germany and Greece. The second part, consisting of six articles, are discourses related to the young generation

2281

in Europe which focuses on their effort to integrate into the societies they are currently living as well as with their continued ties in homeland while trying to protect their ethnic origins and national identities. The third part of the book consists of four articles, all written by female authors, and mainly bringing discussions related to the gender issues from the point of women immigrants in Europe while the articles in the last part focus the Euro-Turks and their entrepreneurship as well as new identity formations as important concerns in the recent debates related to Turkey's membership to European Union. Generally speaking, authors in the first chapter, challenge previous perspectives on the formation of a Turkish population in European countries and offer new insights about their integration into the host societies by developing somewhat new identities as new citizens of these countries. Contributors to this volume also look at the problems of adaptation to the new environment as well as the creation of new individualities in countries of current residency. One of the main concerns of the young generations, as argued in the book, is their identity problems since almost many of them feel themselves isolated. The second chapter of the book with the subtitle "Young Turks, Identity Practices and Integration", is mainly dealing 'With the young generation living in European countries although one of the articles is related to the Turkish migrants in the United States of America. This brings to mind a little criticism for the title of the Insight Turkey Vol. 13/ No. 1/2011

book whether it had to be titled as Turks in West rather than Turks in Europe. Paul Tkachenkos article deals with musical activities ofyoung generation, particularlymales, focuses on the traditional values rather than integration into the European culture as the preferred musical instrument is Turkish 'saz' It is interesting to read the contradictions between the younger generation, mainly born in England, who attended the musical classes where they met their peers in a small coffee place and practice music in a classroom where they usually converse in English language whereas the instructor does not at all communicate in English. Tkachenko also suggests that Turkish music schools in London are similar to the folk-houses (Halkevlert) once opened in Anatolia upon the instigation of Atatiirk while the majority of the instruction is based on the Alevi traditions. The third chapter of the book titled as "Turkish Women between Tradition and Modernity" discusses women issues in four articles. The article written by Mona Fransehn and Margareta Back- Wicklund is an interesting one which provides a comparative insight about the young couples who have different views, aims and concerns in the process of starting a family and their preference to select governmental facilities or family aid to take care of newly born babies highlighting western and eastern cultural differences in farn.ily matters. Another artiele written by Maria Carlson also discusses the issue of gender roles of the Turkish females by merely taking into consideration a certain group, the ones attending the language courses to learn Belgium so as they could integrate into the society. Although this is one important aspect to enable them being part of the society and utilize the public facilities, or at least to carInsight Turkey VoL 13/ No. 1/2011

ryan their daily life in the working environment, their family responsibilities and domestic priorities seem to prevent them attending language. The last chapter o(the book contains seven articles which are mainly on the European Union issues where the role Turks in Europe as a bridge between Turkey and Europe is discussed. Although most of the articles in this chapter contribute to abetter understanding of Turks in Europe, one particular article comparing the restaurant owners and lawyers in England can not escape criticism. From a methodological perspective, I argue that setting up a comparative work between the two groups is problematic because each requires different skills, for example, the restaurant owners, need to spent more physical effort and energy, and have less language requirement and no essential requirement for higher education while being a lawyer requires higher skills in language, law education and specialization approved by the British Bar. Perhaps textile and clothing industry could have been a better group for a comparative work with the restaurant owners. An interesting issue of the book is the concept of 'Turk' which is referred to in most articles. The authors classified Turks as the ones migrated from the mainland and Cyprus whereas the other Turkic countries are excluded from the book. However the Kurds are considered as Turkish citizens in some cases while their origin in the sense of ethnicity is denied in others. Perhaps a chronological categorisation of people of Turkish origin would yield other results. Migration of Turkish Cypriots was intensive in 1950s and 1960s, and in the 1980s some Turkish Cypriots considered moving back at least for their retirement or for establishing businesses. In the 1990s howev-

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er, increasing the number of migrants from Turkey, both Kurdish and Turkish origins came to England due to political and economic reasons. The issue of identity runs throughout the book. As Daniel Paas shows in his article young Turks in England and Germany do not know where they really belong to. Although they live in Europe and have European education, they feel that they are treated as immigrants and inferior citizens in Germany and England while they are considered as 'others' in Turkey referred to as Londoners' or German Turks. Gender differences are also noted as far as the impact of traditions on young people is concerned whereby young females feel more pressurized on matters pertaining to love and sexuality. One other recurring theme in the book is the integration problems of the Turkish society due to language and di-

alect differences as well as religion, which are considered as the most important obstacles for the young generations to have better education or scholarship opportunities. Although articles in the book mainly look at the Turkish community in Europe as immigrants and as second class people, very little of the educated Turks is covered. In this context, an article about 'brain migration and integration of such classes with their colleagues and social circle could have been an important contribution to the book. In conclusion, with its depth and extensive coverage, Turks in Europe is a welcome addition to the literature on identity, culture and integration of migrants of Turkish origin both from mainland Turkey and Cyprus.

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