Prime Minister Recep Tayyip Erdogan: A ‘Revitalized’ Turkey Has Joined the Global Marketplace

Just hours before he spoke at the Wharton Global Alumni Forum in Istanbul on June 8, Recep Tayyip Erdogan, Turkey’s prime minister, met with approximately 700 businesspeople attending the Turkey-Arab Economic Forum. The group’s agenda includes finding ways to increase economic cooperation in the region. “The more trade there is, the more prosperous and peaceful the world will be,” Erdogan told the conference, according to coverage of the event in the Turkish Daily News.

It was a theme Erdogan repeated in his remarks at the Wharton Forum, during which he touched upon such issues as the business climate for international investors in Turkey, his country’s application for admission to the European Union, Cyprus reunification, the Arab-Israeli conflict, Turkey’s relationship with the U.S., and the United Nations’ Alliance of Civilizations project initiated by Spain’s prime minister and co-sponsored by Erdogan.

As Erdogan and several other speakers at the Forum noted, any discussion of Turkey’s role in the global marketplace must take into account the country’s unique geographic location. “Throughout the world, there are areas of conflict and threats to peace,” Erdogan said. “We in Turkey are very close to these points of conflict. We are neighbors to Iraq, Syria and Lebanon; we are enmeshed within this region. Therefore we are actively working to reach a culture of consensus. Perhaps the world doesn’t have at the top of its agenda what Turkey is doing to build such a culture, and yet we know that if we fail to establish peace in this region, there will be undesired consequences, and democracy will suffer.”

The 21^st century was been one of “revitalization,” Erdogan said, and Turkey has been a part of this. “We are now a stable democratic country. In only the last three and one half years, in the economic and political arenas, we have accelerated the reform process. We have expanded social freedoms. We have moved ahead on privatization, starting with fiscal markets, and extending into agriculture, telecommunications and energy… . Thanks to these activities, the bridges linking Turkey to the outside world have been reinforced. Turkey is a more attractive player in the global markets as well, and we are an example for those countries that have remained outside the process.”

Erdogan offered specifics: Between 1993 and 2002, the average growth rate stood at 2.8%; in 2003 it went up to 5.9% and in 2004, to 9.9%. In 2005, it was 7.6%. Total GNP was $180 billion in 2002 and is now $360 billion. Inflation, once as high as 30%, was 7.7% at the end of 2005; the goal is to decrease it to 5% by the end of this year. Foreign exports totaled $36 billion in 2002; by the end of 2005, they totaled $73.4 billion. Foreign direct investment was $500 million three years ago. It is now close to $10 billion. “In recent years, we have added iron and steel, glass and leather products, autos and auto parts to our export portfolio,” Erdogan said. “We also have invested in our infrastructure. We now have a dynamic economy, big domestic markets and competitive industries, all of which means that Turkey presents unique opportunities for global investors and global capital.”

Asked at one point how his government is protecting the rights of businessmen, Erdogan responded that international investors looking to get a foothold in Turkey “can establish a company within 24 hours. We have incentives in 49 cities where we provide tax breaks and land with no fees. Social security premiums are at their lowest level, and energy is 50% cheaper. We don’t differentiate between foreign and local businessmen. Rights of ownership are the same for everyone. There is no discrimination.”

A “Conduit for Energy”

Erdogan, who became prime minister of Turkey in 2003 after his AK party won a majority of seats in the Grand National Assembly a year earlier, also spoke of Turkey’s advantageous location as a “major conduit for energy,” noting that close to 70% of the region’s oil supply will have to go through Turkey in the future. With the completion last year of a $4 billion pipeline that will carry oil from Azerbaijan through Georgia and then across Turkey, Turkey is now the main channel for oil and gas from the Caspian Sea/Central Asia regions to Western Europe, or, as Erdogan put it, “we are a natural bridge between energy resources and energy destinations …. The energy map, and energy security map, is changing.” Erdogan added that, given Turkey’s strategic location as an energy crossroads, “our membership in the EU will ensure that we will establish peace and stability, and help the EU open up to these markets.”   

The country’s application to the EU, however, is not going particularly smoothly. On October 3, 2005, membership negotiations were opened between the EU and Turkey, which has been an associate member since 1963 and an official candidate for admission since 1999. On June 12, Turkey was to have started the first of 35 “negotiation chapters” with the EU as part of what is expected to be a multi-year process. One sticking point has been the Cyprus question, an issue that goes back to 1974 when Turkey invaded the country after a coup by supporters of union with Greece. Cyprus was then divided into the Greek-dominated south and the Turkish Cypriot state in the north. A United Nations plan to reunify the island in 2004 was supported by 65% of the Turkish Cypriot community but rejected by 75% of the Greek Cypriots. Since the plan’s implementation needed approval by both sides, reunification did not occur.

On June 12, the EU pegged progress in Turkey’s membership talks to the country’s agreement to open its airports and harbors to Cyprus, which became a member of the EU in May 2004 — a week after the U.N. plan failed — although membership applies only to the southern part of the island. On June 16, Erdogan, according to press reports, announced that Turkey will not open its ports without trade concessions for northern Cyprus, even if that means EU membership talks are suspended. On June 20, a top EU negotiator fired back, suggesting that Turkey was heading for trouble in its membership bid unless it agreed to end the trade curbs. During his earlier talk at the Wharton conference, Erdogan had said that Turkey will not stop trying to negotiate the Cyprus issue, even though “a week after the failure of the plan, southern Cyprus was awarded with membership in the EU, while northern Cyprus is still banned. We are looking for justice” in this matter. 

Membership in the EU, Erdogan said, “is one of the most important pillars that our foreign policy rests on. The EU has the biggest share in Turkey as a global investor. It is also our biggest export partner, with 60% of our exports going to the EU countries. Thus our membership in the EU will contribute to the EU’s economy, a benefit that will also expand to the other countries which remain outside the EU … .We share common values with all these nations.” The Islamic population and African countries, “are watching this process very closely,” Erdogan added. “They tell us that Turkey will be a representative of the Islamic world within the EU.”

At the same time, Erdogan noted at one point during his remarks, Turkey’s relationship with the EU “is by no means an alternative to our relationship with the U.S.,” which has been a strong supporter of Turkey’s application to the EU. “We have always had strong ties with our transatlantic ally. Going forward, we will have even stronger solidarity and cooperation — in the struggle against terrorism, in the resolution of problems in the Arab-Israeli conflict, in [the effort to attain] stability in central Asia and in the security of energy transfer lines. There might be differences in attitudes because Turkey must be more cautious, given its geographic context — close to some areas of conflict. But despite these factors, we are determined to improve our relationship.”

New Friends, Not New Enemies

Asked specifically about Turkey’s relationship with Syria, Erdogan responded that “we don’t have any pressure from the U.S. but of course there is a certain profile the U.S. puts forward … We are neighbors with Syria, and share an 800-kilometer border with them. We have had a bad dialogue for the last 40 years, but that is changing. Now Syria is clearing out all the land mines [on the border] and eliminating its military forces and police. We are doing the same. We are also trying to increase trade between the countries.” Turkey, Erdogan added, “bases its foreign policy on the following principle: We have to produce new friends but not make new enemies. … We are improving our friendships with our neighbors, in every area, from military to economic to cultural.”

Erdogan also noted the failure of the global community to establish peace in the Middle East, a region that is close to Turkey geographically, politically and culturally. “How can we prevent the Middle East from turning into a bloodbath?” he asked. “For humanity, this is something we must do. We believe in the rule of law, in human rights and democracy, and that is why we are seeking peace. But we cannot allow people to present Islam as an intolerant faith that is blind to all other faiths in the world.”

After the events of September 11, Erdogan said, “Islam and terrorism unfortunately were always spoken of in one breath. This hurts us deeply because the concept of Islam itself embodies the philosophy of establishing peace. None of these faiths and religions would permit terrorist activities. And if people belonging to this religion are involved in terrorist activities, you cannot generalize this activity and suggest that the whole religion is full of animosity towards the outside world.

“We need to establish a new world by winning people’s hearts; this will be a safer world than one where we are trying to establish peace by killing people,” Erdogan said. “The problem does not lie between the world of Islam and the rest of the world. The problem lies between countries and is due to the inequalities in the world. Very recently I visited Sudan. I told the government that I didn’t want to leave the country without visiting Darfur. In the end, the government permitted us to do this. My delegation and I went to a camp where 30,000 people are living. They do not have water, electricity or roads; they have so-called tents which are no more than rags tied together. The children are filthy and have no shoes. As you know, in Islam we have circumcision ceremonies. While I was visiting the camp, there was one such ceremony performed. The instruments used were not sterilized. … After I came back to Turkey, we decided to establish a tent city in Darfur that will have water and electricity. This camp, at least, will be provided for by the Turkish government and Turkish people.”

Terror, Erdogan noted, “feeds on poverty. When we look at some countries in the world, we know that money is spent in abundance on trivial things. If we were to channel this means to poorer countries, we could save many people. At the end of 2005, the world spent one trillion U.S. dollars on armaments. How much was spent on eliminating ignorance and poverty? There is a huge gap between developed and developing countries, independent of the different religions. If we do not establish a bridge between these societies, people living in different corners of the world will not be able to benefit from the fruits of globalization.”

Asked also about the influence of radical Islamists in Turkey, Erdogan noted that 99% of Turkey’s population is Muslim. “So we don’t have any worries about this. … The things you call radical are just marginal. These radical groups won’t have any effect on Turkey. But we must [consider] the following: If [someone] has just an idea, an opinion, we have to tolerate that. But if it is more than an opinion, if it becomes an armed attack, we have to respond to that. In three and a half years we have taken many important steps in line with the Copenhagen Criteria, more steps even than in some EU countries.” The Copenhagen Criteria are a set of rules requiring that any country applying for membership in the EU must have a market economy and institutions that preserve democracy and human rights.

Erdogan again cited the importance of Istanbul as a bridge between continents and civilizations, between East and West, and thus as a symbolic choice for the location of an upcoming meeting of the U.N.’s Alliance of Civilizations. The Alliance was announced by U.N. Secretary-General Kofi Annan in July 2005 “to respond to the need for a committed effort by the international community … to bridge divides and overcome prejudice, misconception and polarization which potentially threaten world peace.” Events of recent years, Annan said, “have heightened the sense of a widening gap and lack of mutual understanding between Islamic and Western societies — an environment that has been exploited and exacerbated by extremists in all societies. The Alliance of Civilizations is intended as a coalition against such forces.”

“I think the problem we are faced with today,” said Erdogan, “does not result because of differences in faith, beliefs or civilizations. I think it is rather because there is a huge tendency to segmentize us, to separate us, and to put us into different categories. The Alliance is intended to stand firmly against people who want to divide us.