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February 17, 2013, Sunday

Managing Japan’s interest in Turkey

As I analyzed in my last column, Turkey has a growing interest in Asia. This may not be a result of Turkey's well-studied and thought out strategies, but rather a reaction to the unfair attitudes of EU countries to Turkey regarding final membership in the EU. For this and for other reasons, Turkey has to focus on Asia and manage the process effectively.

Right now I am in Japan, the country of my expertise, in order to participate in and give a series of conferences in major cities such as Tokyo, Osaka, Nagoya and the old capital of Kyoto on two major issues: the connection between Islam, democracy and development; and the rise of Turkey as an economic power in the region and the investment opportunities this presents for Japanese businesses.

The most critical international symposium was organized jointly by Tokyo University's Islamic Area Studies and the Japan Institute of International Affairs at Tokyo University (TODAI), Japan's oldest and most prestigious university. Participants discussed many critical issues at this two-day symposium, held on Feb. 15-16, in seminars such as “Moderate Islamic Ethics, Economic Development and Democratization.”

In fact, developments in our region in recent years provoked deep interest in major Islamic countries, principally in the Middle East and North Africa. Among the reasons are rising energy prices, a stable supply of oil and gas, radical political and regime changes due to the so-called Arab Spring, and the rise of Turkey in terms of economy as well as democracy.

As a matter of fact, when I was thinking about the distinctiveness of Turkey's rise in the world, three key terms caught my attention: the combination of Islamic ethics, democracy and development. As I evaluated this perspective, I thought only Turkey could be seen as a successful case. The recent admiration for Turkey as a “model country” is due to its achievements in development while blending elements of Islam and democracy. There is no interest in Islamic countries when they are underdeveloped, undereducated, in poverty, in social chaos, under the oppression of authoritarian regimes and so forth. That is why people in the Arab world are demanding more welfare and freedom. Turkey was just like them only 10 years ago, after the lost decade of the 1990s, a situation that resulted in the successive crises of 2000 and 2001.

Since then, Turkey not only solved many of her macroeconomic problems, such as chronic high inflation, fiscal deficits and deep financial frailties, but also recorded considerably high and uninterrupted growth, with the exception of a very short interval in 2009 due to the global economic crisis, and tripled the per capita gross domestic product (GDP) while making several significant reforms. In this, positive external anchors such as the rapidly expanding global economy (volume of trade and credit/financial), Turkey's motivation for full EU membership, and the incentives of international organizations such as the International Monetary Fund (IMF) and the World Bank were also important factors.

Alongside the growing image and fame of the country, Turkey has become one of the major centers of gravity and therefore Turkey has become a tourism giant and one of the most striking beneficiaries of global foreign direct investment (FDI). İstanbul has truly become a global transit hub, a financial center and a land of investment opportunities especially in real estate development with a valuable geostrategic position.

And so, Turkey has come to the attention of Japan's ruling elite and businessmen after many long years. Leaving historical issues and episodes aside, it could be argued that during the recent past, Turkey was capable of attracting Japan's interest when it was at the peak of its process of catching up to the industrialized nations.

At the beginning of the 1980s, Turkey was trying to recover from the woes of the third brutal military coup since the 1960s and eradicate the repercussions of underdevelopment. Turkey's advantage was Prime Minister Turgut Özal, who was a man of real leadership and great vision. His reforms and open door policies under the auspices of the IMF stabilization agreement of the early 1980s produced concrete results throughout the country.

He also visited Japan. His vision, personality and leadership created a positive climate and Turkey started to attract finance and investment from Japan. After he died in 1993, however, with inconsistent and weak coalition governments, Turkey lost the entire next decade because of rising terrorist activity, military oppression, earthquakes, and so on. Turkey lost Japan's interest to a large extent.

It should be noted that this loss of interest was also due to Japan's own economic crisis lasting two decades, a lack of leadership, and fragile and short-lived governments. During this period, Japan was experiencing a silent period of isolation and self-destruction. It seems, however, that Turkey's remarkable achievements in the last decade, the pressures of the global crisis and intensified global competition have forced the Japanese to take another look at Turkey in order to take part in the rising market of such a regional star.

The last but not least factor in the rise of Japanese interest in Turkey has been the success of China in the region, as well as its activity in Africa. Therefore, the Japanese want to observe what they are doing and how they are doing it. Let me remind you that, at the beginning of the 20th century, Japan sent many military spies and bureaucrats to İstanbul to observe the military activities of Russia in the region and take the required timely measures in response. Now it seems that the Japanese are watching China this time, seeing it as a growing threat in terms of economic as well as security issues.

The question is the capacity of Turkey and Japan to get concrete and fruitful results on the basis of a win-win strategy.