Foreign policy may increase economic fragility

Foreign policy may increase economic fragility

Recently, there have been ongoing debates which may cause serious fractures in Turkey’s foreign policy. These debates also carry the risk of escalating the existing fragilities in the economy.

Prime Minister Ahmet Davutoğlu and members of the cabinet are promoting the reform program in domestic and international markets. The aim is obvious: Despite the tough global climate, Turkey has to attract foreign capital otherwise it will not be able to reach its growth figures. Also, serious concerns may emerge in terms of stability. 

Statements issued by international contacts revealed that foreign investors no longer trusted words for reform in Turkey; they want to see concrete steps. This expectation voiced by Deputy Prime Minister Mehmet Şimşek is actually proof of the lack of confidence by foreigners in the government and the economic course. For this reason, the government has seen that it immediately has to take steps for reforms and apply them swiftly, while also introducing new measures which seem necessary. 

The first test for foreigners will be whether the three-month pledges will be met at the end of March. However, this might not be enough, as I think the Central Bank’s re-postponed simplification steps will also be observed. 

While these economic issues were being discussed, the agenda suddenly turned to foreign policy. The new debate was the meeting U.S. Vice President Joe Biden held with opposition groups in Istanbul and his criticisms over the jailing of petition-signing academics and journalists Can Dündar and Erdem Gül. Biden also voiced criticisms on freedom of expression and the media. Actually, the main topics during Biden’s visit were foreign policy demands such as the participation of the Democratic Union Party (PYD) in the Geneva talks, the withdrawal of Turkish troops from Iraq, a more active fight against the Islamic State of Iraq and the Levant (ISIL) and returning to the resolution process. After Biden, in meetings with the EU, the same topics were brought up.  
Clashing with the West 

As a matter of fact, we can say that the common denominator of the discussions was the Kurdish issue. The government’s recent stance has come to a point which is unacceptable to the West and as an extension of the problem the debate on the PYD has taken its place at the center of foreign policy debates. In short, the government is being forced to change the tough Kurdish policy it started before the elections believing it would increase its votes and adopt a conciliatory policy. The president and the prime minister are resisting. 

Domestic policy in Turkey, except for the incidents in the southeast, looked calm after the elections, but with the existing trust issue and with the effect of the mistakes made amidst an ever-toughening global climate, it was already looking fragile. If the current clash ongoing with the Western alliance gets more severe, it will be very difficult for us to draw the investments we expect. New investments will not come and the existing foreign capital, especially the short-term ones, may withdraw.   

Turkey does not have the economy to go its own way and act alone in the region.