The cost of making a profit in Turkey

The cost of making a profit in Turkey

The World Economic Forum (WEF) started its two-day Istanbul conference on Sept. 28 in order to seek new investment opportunities in Turkey.

Despite spreading pessimism in the world economy which forced a revision in global growth for the next 10 years from around 5 percent to 3 percent, Klaus Schwab, the WEF founder and chairman, has painted a promising picture for Turkey.

Turkish growth is likely to be above the global average, meaning a young and educated population was maintaining the country’s competitiveness, Schwab said during a private dinner in his honor the night before.

He did not exactly explain in that speech how the competitiveness of Turkey, with an inflation rate of 9 percent, a market interest rate of 9.5 percent and an increasing current account deficit, had a continuous need to devaluate its currency against U.S. dollar.

But Schwab was almost certain that in the next 10 to 20 years, in parallel with tremendous achievements in technology, there would be new investment opportunities in Turkey.

Perhaps it will make sense for international investors to shift fields of industry that are not as technology-dependent to Turkey, a country under the security umbrella of NATO, to make use of its young labor force and have easier access to the Middle East, Africa and Transcaucasus markets. Perhaps that is the opportunity in Turkey to make a profit.

Actually, Schwab is not alone in trying to make use of the Turkish opportunity. A high-ranking U.S. trade mission will be in Turkey from Sept. 30 to Oct. 2, headed by Secretary of Commerce Penny Pritzker and Ursula Burns (of Xerox) of the President’s Export Council (PEC). This is a rare opportunity; the last time the PEC conducted such a fact-finding mission was in 2008. It was to Mexico and Brazil then; now it’s to Poland and Turkey.

The American sources say it has nothing to do with the fact that the two countries are playing a key role in a new U.S. strategic defense initiative, the Missile Shield, where Poland is a base for the missiles and Turkey for its early warning radars. And Poland and Turkey are also like two fortresses at the northern and southern corners of Europe, very near to Russia, while Turkey also has access to the Middle East and the Caucasus.

They say it’s all about the investment opportunities in the two countries, which have relatively reliable growth and a young and educated workforce.

It is possible to speculate that Schwab, Pritzker and Burns are all on the same page.

Perhaps the message of continuity on the political stage given to them by President Tayyip Erdoğan for Turkey’s next 10 years, two five-year presidential terms, is like an insurance policy for new investments for European and American companies.

Perhaps that applies to U.S. President Barack Obama, too, who has been asking for a bigger Turkish military contribution against Islamic State of Iraq and Levant (ISIL) brutality next to Turkey’s borders. Does he think about bothering too much about Turkey’s democratic values as long as Erdoğan meets the security needs of the U.S. and the European Union through NATO? Is it possible that he also sees it as a waste of time to push for a more democratic, secular, European-oriented partner in a hellish part of the world?

Will there be anyone to listen to the International Press Institute (IPI) delegation, for example, who are expected to be in Turkey also this week to focus on freedom of expression and the media? Will there still be interest in judicial independence and the quick and fair delivery of justice in Turkey, given that that is actually better for foreign investments as well.

Or will there be anyone there in the West to ask if it is actually a “freedom,” as Prime Minister Ahmet Davutoğlu dubs it, to make it “free” for 10-year-old girls in secondary schools to don headscarves, but not let them be subjected to social pressure by their classmates or neighbors in this part of the world, where political Islam in some of its most radical forms is on the rise?

In 10 years, Mr. Schwab, Ms. Pritzker, Ms. Burns will there be anyone in the West to hear the voices of young Turkish women, now students at the age of 10? Would you like to see them within Turkey’s young, educated, workforce or sitting in their homes unemployed, trying to be obedient wives while giving birth to as many children as possible, just like in most of the Middle East?

Is it worth thinking about it? Or maybe one shouldn’t bother as the system is making such a good profit?