Other than some conjectural difficulties leading to fluctuations in basic macroeconomic indicators, the deeper problems can be enumerated as follows:(1) Turkey’s strategic partnership with the US is quite asymmetric in the sense that it has been strictly confined to military fields via NATO, while strictly excluding economics and the principle of a win-win strategy. On paper, unlike Turkey, Armenia stands closer to Russia. However, Turkey continues paying billions of dollars in lobbying fees (or, if you like, bribery) to the US in order to counter Armenian arguments in the US Congress.
(2) Under the difficult conditions that could be brought about by global warming and in the event of a reversal from the free trade regime, there would be big problems for Turkey in providing energy from reliable resources for its expanding industry.
(3) As of today, cheap producer countries such as China and India represent a serious concern for Turkey’s major industries. However, it is unlikely that Turkey would encounter negative impacts stemming from these countries merely by transforming its economy into high value-added industries for the reasons to be outlined below. Even if this transformation is successful to a certain extent, the problem of high unemployment will persist because of the nature of the transformation itself.
(4) Turkey’s current national savings performance, as well as potential to increase it in the near future, is not promising, requiring continuous inflow of high quality foreign capital.
(5) In addition to capital, Turkey has serous deficiencies and dependency in providing civil and military technologies.
(6) Turkey’s existing entrepreneurial pool is not sufficient and is not well qualified to overcome new challenges and cultivate the benefits opened up by recent opportunities. This should be seen as the heritage of an isolated political and economic system in Turkey in which competition was almost eliminated and resources were distributed from the center according to quite rigid ideological priorities.
(7) Human capital, in general, is sending out an S.O.S. in most economic and social sectors due to the ideological architecture of the Turkish education system.
(8) The gap between the official state system, dominated by bureaucratic oligarchy, and the citizens is becoming even wider. In a more dangerous development, the system has adopted illegal methods such as military coups, organizing mafia activities, other organized crime organizations, etc., in order to counter civilian demands.
(9) As the state is being weakened and the people are alienated, the capacity of the state to control, guide and create strategic exit scenarios in managing conflicting demands is being dramatically undermined. In other words, we are now passing through a process of the state being dismantled.
Let me briefly clarify some of the points listed above.
Turkey tries to balance its existing asymmetric relationships with the US on the basis of equal partnership by taking advantage of existing gaps in the world economic system, as well as by revitalizing and mobilizing its regional advantages stemming from its economic, historical and cultural endowments. In its new drive, Turkey is demanding a “win-win” strategy and is trying to get its distant but strategic partner to understand Turkey’s new politics of “zero problems” with its neighbors. Because of this strategy, the share of neighboring countries in Turkey’s exports rose to almost 45 percent from just below 10 percent before the 2000s. Unfortunately, it is becoming clear that Turkey’s regional priorities and interests are mostly in conflict with those of the US.
