Mustafa Kutlay Researcher, USAK printable version send your friend message to author add comment (4)

Wednesday, 28 October 2009

In recent years one problematiqué in regards to Turkish foreign policy has captured the attention of the pundits. It is the question of whether Turkey is drifting away from the West. During the last couple of years some developments brought this question to people’s attention. First, Turkey-US relations were shattered due to the Turkish Grand National Assembly’s refusal to send troops to the US’ Iraq invasion. Then, Turkey-EU relations, after experiencing the golden years between 1999 and 2005, plunged into a vicious cycle mainly thanks to the Cyprus issue and the recalcitrant Merkel-Sarkozy coalition against Turkey. Finally, Turkey’s worsening relations with Israel triggered by the famous ‘one-minute’ incident in Davos added fuel to the fire.

Almost during the same time period, Turkey’s relations with its neighbours started to improve considerably.  In line with the new foreign policy paradigm, the ‘zero problem policy’ with neighbours, Turkey devoted most of its energy to mediating the peace process between Syria and Iraq; Israel and Palestine; and to facilitating the talks between Iran and the Western world. More recently, Turkey remarkably fixed its bilateral problems with Syria, Iraq and Iran. As a result, the language of the relations, which had been dominated by ‘hatred’ and ‘conflict’ for a long time, gradually transformed into the language of ‘cooperation’.

The interesting point to which this comment aims to draw attention is that Turkey heavily relies on economic instruments in improving relations with its neighbours. 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 resulted in the reciprocal abolishment of visa requirements. It is somehow ironic that Turkish businessmen have long tried to establish a visa-free regime with the EU. Yet, they cached the chance to enter the Syrian market without visa obligation now.  Turkish and Syrian businessmen are preparing for joint projects in the tourism and industrial sectors. The bilateral trade relations (which expanded to 1.1 billion dollars in 2008 with a 40 percent increase vis-a-vis the previous year) are expected to further increase in the coming years.

The other example is Iraq. The ‘Iraqi conquest’ of the Turkish government in the previous weeks has yielded important economic gains. Turkey aims to expand bilateral trade relations 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. Today, the trade volume between the two neighbouring countries reached 10 billion dollars; this figure was about 350 million dollars just ten years ago. The governments plan to establish a joint industrial region close to the border. This ambitious project is intended to attract entrepreneurs in the Middle East and Caucasia and to transform the region into an industrial hub. Turkish investors have investments in Tabriz, the focal point of the Iranian economy, and they mainly concentrate on textiles, food, chemicals, gas exploration 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.

As shown by the brief examples above, Turkey tries to develop cooperation with its neighbours and strengthen stability in the region. In this context, the practical hand of the Turkish state seems to be trade and economy. These developments have already been reflected in Turkey’s trade balance, albeit narrowly.           

As can be seen from the above figure, the EU still captures the lion’s share of Turkey’s foreign trade. Yet, the figures are quite below the averages during the late 1990s. The ratio of Turkey’s trade with the EU over its total trade decreased gradually starting from 2003 (it was 55 percent of Turkey’s total trade) and was reduced to 41 percent as of the end of 2008. During the same period, Turkish trade boomed from 116.5 billion dollars (in 2003) to 334 billion dollars (in 2008).

When the breakdown of Turkey’s export and import volume by country groups is scrutinized, some interesting results come to the fore. During the last three years, Turkey’s imports from the EU-27 decreased from 42.55 percent to 37.03 percent of Turkey’s total imports. In the same vein, Turkey’s exports to the EU-27 decreased from 56.02 percent in 2006 to 48.00 percent in 2008. Yet, it would be apt to note that Turkey’s export (EU-27)/total export volume has remained around 54-57 percent since the Customs Union decision in 1996. One possible explanation of the recent decline in exports to the EU is the initial impacts of the global financial crisis, which severely hit the domestic consumption in the EU.

Perhaps the most interesting data is about Turkey’s changing trade relations with the Near and Middle East. Turkey’s exports to the region increased more than the overall increase and the Middle East’s share in Turkey’s exports grew from 13.22 percent to almost 20 percent.

Table: The breakdown of Turkey’s export and import volume by country groups
Country Group	share of total exports			share of total imports
	2006	2007	2008	2006	2007	2008
EU-27	56,02	56,29	48,00	42,55	40,34	37,03
Near and Middle East	13,22	14,05	19,26	7,570	7,43	8,72
Russia	4,00	4,00	5,00	13,00	14,00	16,00
Turkic states	2,31	2,67	2,84	1,40	1,56	2,11
Iran	1,24	1,34	1,53	4,03	3,83	4,06

 All in all, it seems that parallel to the developments in so-called ‘high politics’ areas between Turkey and its neighbours, economic relations also started to improve gradually. In fact, similar to the neofunctionalist reasoning, the Turkish government follows a spillover strategy and tries to overcome the political barriers via establishing economic linkages.

What Does the Neofunctionalist Theory Argue?

The focal point of the neofunctionalist theory is the interplay between economic and political integration. It is assumed in the theory that integration in ‘low-politics’, i.e., specific economic sectors, would first create functional pressures in other economic sectors; then, it would pave the way to building a new political community via political integration, because once integration is kicked-off in key economic sectors and supported by a supranational authority (which binds the nation-states), it would yield positive results for interest groups of those taking part in integration. In a pluralist society, these interest groups would push to expand the integration process to the other economic sectors in order to benefit from decreasing transaction costs and increasing economies of scale. In other words, integration of particular economic sectors would create functional spillover for other sectors, which in turn would help to alleviate political conflicts. Although it does not seem possible to directly refer to the neofunctionalist reasoning in the Turkish context due to the lack of high supranational institutions that bind the parties and the restrictions on pluralistic society assumptions, it would not be mistaken to claim that it represents a good take-off point due to one main reason: The improvement of trade (economic) relations creates enough room for the parties to engage with each other. The Middle East and Caucasia have long been dominated by political tensions and the regions’ economic potential could not be exploited. Hence, it is of vital importance to change the ‘language of the relations’ via concentrating on economics and welfare issues. Once the benefits of the economic cooperation are reaped, it would most probably be easier to discuss more sensitive political issues and to develop dialogue among the parties.

Having taken the entire picture into consideration, if we turn to the question at the beginning of the comment, what does it mean for Turkey’s relations with the West? In other words, how should the recent political and economic developments be interpreted? Does this mean Turkey is drifting away from the West? If not, what should be the perspective in evaluating the recent activist Turkish foreign policy?

The following comment will be devoted to these questions.

Mustafa Kutlay,

USAK Center for EU Studies,

mustafakutlay@gmail.com