‘Turkey’s time has come’

An annual joint lecture of the Turkish Confederation of Businessmen and Industrialists (TUSKON) and the Center for American Progress (CAP) on the US-Turkish economic partnership featured Mr. Bryson, and once again economic partnership has become the agenda item in relations. Otherwise, there is much going on in the region that makes it quite hard to talk about economic cooperation and deepening economic relations in this political and social climate. Turkey and the US are working quite closely, and everyone is talking about what is so often referred to as the golden age of the relationship between the two countries nowadays, and yet, there is still no intense debate and focus on bilateral economic cooperation.

The Arab awakening and the recent transformations in the larger Middle East signify the importance of the Turkish economic model and its stellar performance, particularly in the last decade. US policy makers understand this potential and see Turkey as an opportunity in the region. Due to Turkey's soft power as a regional economic performer, everyone is searching for possible methods of cooperation between Turkey and the countries that are being transformed in the region. Many Arab scholars and leaders see Turkey's improving economic prosperity as a source of inspiration for their own success, and they would like to completely understand this business-friendly model and cooperate with Turkey.

However, not everyone is that bullish on Turkey. International media in particular, which are influenced by the financial sector, are discussing the probability of a hard landing, but the business community doesn't see any signs of it. The current account deficit is the key data item that frequently feeds the hard landing debate.  Often public sentiment and the interests of the financiers of growth do not coincide. While financial institutions lose a good chunk of their profits due to the policies of the central bank and regulatory bodies in Turkey, the middle class in contrast is flourishing and enjoying the lower cost of investment.

This middle class became the backbone of development in Turkey, and we often miss the demands and requests of these emerging merchants and manufacturers. Without understanding them, it is very hard to understand the domestic climate in Turkey. Fourteen keys leaders of these tradesmen, contractors and manufacturers, who came to Washington to meet the secretary, showed the strength of the economy by putting projects and investments in their own country. TUSKON, which is a unique institution in Washington, D.C., can contribute to these efforts and help US policy makers and institutions to understand these emerging dynamics better.

Oil prices make it difficult for them and for ordinary citizens, but political and economic stability make it easy to weather all sorts of policy shocks at home nowadays. In the end, the corporate sector in Turkey likes to keep its money abroad, while inflows to the domestic market are funded by portfolio investments of the Turkish private sector. In other words, they hedge their risks abroad and invest their money back into the Turkish economy.

Mr. Bryson made a very similar comparison, one that we often write about in detail in Turkey, pointing out recent developments in the domestic market and the importance of political stability. The Turkish-American partnership in third countries is an even more promising idea to pursue than any other partnership for Turkey. American companies are investing in Turkey and looking more and more enthusiastically at the market. Every day, we hear of another investment announcement in the Turkish real sector, while financial companies are looking for ways to leave the market. Exports to the US valued at $4.3 billion and $16 billion worth of imports from the US show the huge gap and the ignorance of Turkish and American companies in developing trade.