Turkish Diplomacy, Economics and Political Developments: Interview with Doga Ulas Eralp

Balkanalysis.com Editor’s note: in this new interview with noted Turkish policy expert Dr Doga Ulas Eralp, Hungarian researcher Gergely Nagy gets insight on a fascinatingly complex range of issues in which Turkey has a stake today- from investment in the Balkans, political and economic outreach in Africa, managing crises in Syria and Iraq, as well as the expected freeze on relations with the Cyprpot Republic in June 2012.

Doga Ulas Eralp is non-resident Research Fellow at the SETA Foundation in Washington, D.C. He is currently also working as a Public-Private Dialogue Expert for Fragile and Conflict Affected States at the World Bank Group. Before his assignment to Washington, Dr Eralp was working as an assistant professor of conflict resolution at Sabanci University, Istanbul. He has also taught at George Mason University and the Brussels School of International Studies (BSIS).

Dr Eralp is also the author of a number of articles and book chapters on the Western Balkans, Cyprus and Turkey. His forthcoming book, The European Union in Bosnia Herzegovina: An Actor of Peace? (Lexington Books) will be out in winter 2012. Dr Eralp received his Ph.D. from the School for Conflict Analysis and Resolution at George Mason University. He also holds a BA in Business Administration from Koc University, and a MA degree in Political Science from Sabanci University. His areas of expertise include governance, democratization processes, conflict resolution mechanisms, accountability, sustainable development partnerships, election monitoring, consociational systems, anti-corruption measures, inclusive dialogue platforms, human rights regime in Turkey, third party intervention roles in the ECA and MENA regions.

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Gergely Nagy: Turkey in recent years has experienced rapid economic growth, both exports and imports have also increased at a great pace and, according to these developments Turkish foreign policy has also become more active in the political, economic and cultural fields too. Do you see any major events or issues that could put hurdles in front of this rapid growth and have considerable, negative effect on development during the next few years? How would you evaluate the domestic and foreign factors in this question, which part could be of greater risk, if there is any?

Doga Ulas Eralp: There are two major developments in the Middle East that would affect Turkey’s policies in the coming year. The first such challenge is the withdrawal of the US troops from Iraq; following the departure of the US troops it is likely that the fragile political stability in Iraq will be altered at the expense of the autonomous Kurdish region in the north.

Turkey is the biggest trading partner of Iraqi Kurdistan and there is considerable Turkish investment in that region. Turkey would not like to see its investments and soaring trade relations with Iraqi Kurdistan put in jeopardy. Similarly Turkey started enjoying better cooperation with the Barzani leadership in the fight against the PKK. In the case of a renewal of hostilities between the Iraqi central government and the Kurds, Turkey might find itself in a position where it would need to act as an intermediary between the Arab parties and Iraqi Kurds.

Secondly, the political uncertainty in Syria is bound to worsen in the coming year as the Assad government struggles to find a solution and plunges into an all-out civil war. Turkey would be forced to establish a buffer zone [across] its border with Syria to thwart the flow of refugees before they reach the Turkish border.

One major development will be the freezing of relations with the Republic of Cyprus, when it takes over the rotating presidency in June 2012 for six months. Relations between South Cyprus and Turkey are already tense due to a crisis over the sharing of the oil resources on exclusive economic zones. Turkey’s progress toward EU membership has not been progressing due to the veto of the RoC and it seems that Turkey is in no hurry to push for reforms.

GN: Do you consider these events and risks – like Iraq, Syria or Cyprus – as long-lasting ones, or can some improvement could be expected in the upcoming year? Can these issues have a major impact on the economy of the affected Turkish regions?

DUE: 2012 will be the decision year for Cyprus. It is highly possible that Turkey actively might start pushing for the recognition of the Turkish Republic of Northern Cyprus among its partners. Turkey will remain the biggest donor and trade partner keeping the Northern Cypriot economy afloat; this is especially crucial in a period where the South Cypriot economy is going through a tough financial crisis and had to concede to Russian and Israeli influence over the island. It will not be surprising to see the South Cyprus government eventually reaching out to Turkey to share the oil resources.

Similarly, for Iraq, 2012 will be an important year that would test the maturity of the Iraqi security structures. The first six months could prove to be politically volatile, and this might indeed affect Turkey’s trade with Iraqi Kurdistan substantially, but once the authorities in Baghdad and the Kurdish leaders agree on the control and distribution of oil revenues, Turkish-Iraqi relations will continue to grow at an even faster pace.

[The year] 2012 will definitely be a difficult one for Syria. As Syria’s former partners in the Arab world have begun to turn their backs on the Assad regime and started supporting economic and political measures, Syrian economy will stagnate and more segments of the once burgeoning Syrian middle class will pull their support from Bashar Assad. Turkey is expected to play a controversial role, to coordinate economic support for the insurgent groups in Syria. Many Turkish cities near the Syrian border have been benefiting from the good relations with Syria like Urfa, Gaziantep, Mardin and Hatay. The local businesses in those cities will definitely be negatively affected, but considering the bigger economic gains in place for Turkey following a possible regime change in Syria, these losses will be tolerated.

GN: In connection to this issue, do you think that the developing relations with several Balkan countries could offset the problems and possible partial political negativities on the Eastern and Southern borders of Turkey? To what extent could these steps affect Turkish domestic politics?

DUE: Turkey’s economic relations with the Balkan countries will continue to grow steadily, regardless of the developments in the Middle East. Turkey already has well developed relations with Bulgaria and Romania with billions of US dollars worth of investment. In the Western Balkans, Turkey will benefit even further from the political stability in Serbia, especially at a time when Serbia is bound to be recognized as a candidate to the EU. As Turkey-Serbia relations will continue to evolve into a partnership, there would definitely be more opportunities for Turkish investors in the region, in terms of infrastructure projects such as the construction of highways and energy transit lines.

GN: Turkey is also diversifying its foreign policy, widening and deepening relationships that had previously not been well-maintained. Do you consider this as an opportunity for maintaining, or even speeding up the current growth? Which countries could fuel Turkish growth, in terms of increasing exports, trade, investments etc.? Are these countries complementary to the existing export, investment countries or can they substitute for the existing ones?

DUE: Turkey’s primary focus in the coming decade will be diversifying its trade portfolio with the Middle Eastern and North African countries and the Sub-Saharan African countries that are projected to sustain a high growth rate, on the condition that they achieve political stability. Turkey is not considering substituting the European Union market with the MENA region and Sub-Saharan African countries, but diversifying the trade volume as a way of offsetting its over-dependency on the European markets and leveraging its influence in the Islamic world.
GN: Turkish foreign policy highlights the country’s economic achievements. However, considering the current negative trends in the European economy for example, what do you think about the possibilities in Turkish growth regarding the close future?

DUE: A significant portion of Turkey’s trade is still with the European Union. The crisis in the Eurozone has already started affecting Turkey’s projections for growth in the coming two years. The sound state of the Turkish banking system is Turkey’s biggest asset in sailing through the crisis, but conservative fiscal policies of the Eurozone countries in the short-term might affect Turkey’s efforts to mitigate its current account deficit.

GN: What do you think would happen if Turkey does not prove able to sustain the current pace of growth? To what extent is this expansionist foreign policy – e.g. many new consulates around the world – built on the need for new markets? Is this growth only fueled by foreign trade and exports, and how could this trend develop in the years ahead?

DUE: Turkey’s growth will continue regardless of the developments in the Eurozone, albeit at a reduced rate. Building more sustainable relations with the rising economies of the world like the BRIC, via following a more active role in G-20 and leveraging its partnership with the US, Turkey’s economic growth will continue. The key element is political stability in Turkey. The AKP government is currently going through a difficult time in balancing its desire to maintain political stability in the country and the need to liberalize the political regime. If Turkish politics completes its liberal transformation, Turkey has the potential to become the primary peacemaker in the Eastern Mediterranean.

GN: How do you see this political stabilisation process developing? What are the main issues that AKP needs to address in order to achieve the liberal transformation of Turkish politics? Is this move of the AKP compatible with the current atmosphere in the Turkish politics, public?

DUE: The AKP government is in a political dilemma; on one side, the government acknowledges that the liberalization efforts of the Turkish political culture need to keep on track, especially in the fields of the judiciary and military-civilian relations; on the other hand, the government wants to maintain its grip on the regime without losing ground on the issue of the Kurdish problem and on the issue of freedom of expression. This is not an easy task and there are many challenges in place, such as the long periods of detention in place for the journalists in prison for different cases of the Ergenekon trials and KCK (the so-called political arm of the terrorist organization, PKK).

GN: Summing up the previous points, to what extent is Turkish economic growth facilitated by this active foreign policy, and how do the new export and investment markets contribute to Turkey’s more and more robust voice and stance in the regional and global field?

DUE: Turkey’s export-led growth has so far been the engine for Turkey’s assertive foreign policy in its near abroad and global foreign policies. One significant development will be a more assertive Turkey in African politics.

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About the Interviewer

*Gergely Nagy is a Hungarian researcher who has written for various news outlets, research institutes and think tanks in Hungary, the Czech Republic and the Balkans, such as TransConflict and Transitions Online. He holds an MA in International Economic and Political Studies from from Charles University in Prague, with a thesis on recent Turkish foreign policy developments towards Albania, Bosnia-Herzegovina and Kosovo.