If the 20th century was about the integration of China
into the global economy; the integration of Asia and Central Asia particularly, including Afghanistan and Pakistan, into the global economy is the major project for the 21st century, according to Güven Sak, the head of the Economic Policy Research Foundation of Turkey (TEPAV). As the Silk Road is about connecting China
via land routes, Turkey could play a role there in integrating the Muslim geography into the global economy, Sak told Hürriyet Daily News.
How do you think we should evaluate Turkish President Recep Tayyip Erdoğan’s recent visit to China participating in the Silk Road summit?
China-Turkey relations in the political front have started with the wrong root due to Chinese complaints about ethnic Uyghurs. But now, we are trying to change that into something more positive. In 2015, after Erdoğan visited China, he noted that the problems in Xinjiang were a domestic issue for China. The Chinese were also concerned about the Uyghurs going to participate in the war in Syria, and later returning to China. But Turkey is now trying to change this negative setting into a positive one, by collaborating in the One Road, One Belt initiative.Can you elaborate?
The One Road, One Belt project is an idea that was first declared by President Xi in 2013. It is about the integration of Asia into the global economy. The Chinese are trying to create a land route between China
and Europe, and this is setting two types of issues.
There are hardware issues related to international trade. Both China
and Turkey are countries in which international trade is very important.
The major hardware issue in creating connectivity between China
through land roads and railway lines is that there are too many countries to pass through. So first, there is the need for land routes, the hardware of international trade.
The second issue is related to software. There is the need to define how border crossings are going to be managed; how regulations will have to change. There is a problem even in the case of traffic signs.
So when the issue is about changing the regulations of those countries at the same time, this then becomes a project that requires a lot of diplomacy. For the Chinese, Turkey is important because of the Turkic republics.
When you look at how the Silk Road is functioning, there is now one route that is functioning, going out of Xinjiang and passing through Kazakhstan. It then runs through to Russia, and then to Germany. But the Silk Road that we have known in the past is not composed only of one route, but many of them. The importance is to create as many routes as possible from China
so that there is a kind of competition that can emerge along the way.
If you consider the Russian
route as the northern route, Turkey has been discussing a lot about the middle corridor. But the middle corridor means more countries to pass through; mainly Turkic republics. From Kazakhstan, it needs to pass through the Caspian Sea, which is problematic. Then you come to Azerbaijan. From there the route toward Georgia
is one possibility and the route toward Armenia is another.
That’s why diplomacy is important, since there are so many frozen conflicts in the region that needs to be dealt with.
It is not only about finding a solution to the hardware and software issues; there are also political problems on the route.
Turkish insistence on the middle corridor is one thing; but the middle corridor is not the only alternative either. It is also possible to pass through Pakistan, where there is already a project: the China-Pakistan Economic Corridor; it is possible to tie this corridor to Istanbul. So there is also a southern corridor that passes from Iran.
The major problem there is that it is not easy to divert the flow in the sea route to the land routes.
The important thing is to provide a secure route to traders, but we have not managed to accomplish this. If you look at south and southwestern Asia, even from India
to Pakistan, it is not possible to pass through with containers, not because of the absence of hardware, but because of political problems.
If you look at it as a whole; on the one side of Asia there is China, while on the other side there is Turkey. It is possible for these two countries to do something together to integrate this part of the world into the global economy.
It can be a positive agenda for China
and Turkey to focus on. Up until now, our relation was standing on the wrong route. With the Syria conflict as well, the radicalization issue became of utmost importance.
But after the attack on Reina (a nightclub on the Bosphorus), I believe there is a better understanding in moving forward in these issues. I think it is a turning point in our relations. Turkey has been doing its utmost to prove to the Chinese that it is doing the most it can when dealing with radical elements.
Apparently the Chinese have been putting the brakes on in terms of economic cooperation due to this problem.
A major issue when it comes to trade is that it is not easy for foreigners to do business with China.
If you look at the extent of investment, for instance, there is, let’s say four units of investment to European countries, one unit of investment is allowed by the Chinese.
This is related to protective measures that the Chinese are taking, and this is an issue raised by Turkish companies as well.
For Turkish companies, it is very hard to obtain a visa to do business in China, for instance. They say “we are only getting a visa for a week, but China
is a vast country; it is not easy to complete our business in one week.”
They would like to have longer visas, but they are not getting it. Although President Xi has been saying they are doing their utmost to prevent protectionism to uphold global trade, I think they are not doing their utmost. If you look at the Turkish numbers, China
is number one in terms of our trade deficit.But Turkey is expecting more investment from China as well, and again it is said to be political.
If you compare 2003 to 2012, there are more Chinese investments in Iran, Greece
and in countries surrounding Turkey. So it is obvious that there is some kind of restrictive practice there. I am sure this is an issue on the agenda between Turkey and China. When you raise this issue, the Chinese start to talk about the terror element.The Turkish side says they are doing their utmost, but that it is too difficult to convince the Chinese.
Well, Turkish officials have been saying that Turkey is not like China; there are some rules and procedures. It is not that easy to take measures when it comes to these issues. There are independent courts, etc.This is exactly what the Europeans have been telling Turkey.
Yes, we have been telling the Chinese the same story. But I think Turkey needs to do more regarding this issue. Radicalization in an Islamic context for China
today is what Marxism used to be in the 1970’s.
But it is possible to turn this into something of a positive element.
If the 20th century was about the integration of China
into the global economy; the integration of Asia and Central Asia particularly, including Afghanistan and Pakistan, into the global economy; it is the major project for the 21st century.
And if it is that; then Turkey could play a role there in integrating the Muslim geography into the global economy. It is possible for Turkey to play a positive role in terms of the Turkish example. The Turkish experience could be a source of inspiration because we, in TEPAV, just finished a study on Islam in Turkey regarding Salafi movements; as around 65 to 70 percent of Turks consider Islam and religion as an important issue. But when you look at radicalization, only around three percent are radical. The Turkish example can be a source of inspiration to all Muslims in the Muslim geography.Many in the West are asking whether Turkey is looking for an alternative to the Western alliance.
Turkey is a country that is a part of the western alliance; there is no doubt about that.
Since both the Russians and the Chinese do not have enough money to sustain Turkey.
Turkey is a country with a current account deficit with a saving deficiency. It is not possible for Turkey to sustain its way of living outside the U.S. dollar market.
Who is Güven Sak?
Güven Sak is the managing director of the Economic Policy Research Foundation of Turkey (TEPAV).
Sak is also a member of the steering committee of Business 20 Turkey.
He has served in various academic positions and obtained full professorship tenure in 2003.
Sak has lectured extensively on public economics and public policy design at the undergraduate and graduate levels. He has served as vice rector of TOBB Economics and Technology University starting with the university’s foundation in 2006, acting as rector between September 2011 and June 2013.
A columnist since the mid-1990s, Sak currently writes for dailies Dünya and the Hurriyet Daily News. Sak has also had a career in government service; between 1984 and 1995, he was a research officer and later (1990) chief economist at the then newly established Capital Markets Board of Turkey. Following Turkey’s 2000 banking crisis, Sak became a founding member of the Monetary Policy Committee.