Foreign Affairs Committee publishes report on UK-Turkey relations

The Foreign Affairs Committee’s report considers the Government’s efforts to cultivate Turkey as a “strategic partner” for the UK and to support Turkey’s accession to the European Union.

The report concludes that the Government is right to continue to support Turkey’s accession to the European Union, as long as Ankara meets the accession criteria, and subject to the Government imposing restrictions on the right to free movement from Turkey after it joins.

However, at the moment, shortcomings in Turkey’s justice system are leading to human rights abuses and making it harder to advocate Turkey’s EU membership, the Committee said. The Committee found that the current climate in Turkey is limiting freedom of expression and the media.

Committee Chair Richard Ottaway MP said:

“When we visited Turkey, like many visitors we were struck by the country’s economic dynamism and international ambition; but we were also taken aback by much of what we heard about Turkish legal proceedings and practices, which did not seem to us to ensure the kinds of human rights standards that we would want to see from a country that we want to see inside the EU.

We are pleased that the Turkish government seems to be aware of the shortcomings and to be taking some steps to improve matters. We recommend that the FCO should seek every opportunity to help Turkey in practical ways to achieve further improvements in its human rights practices, including as regards freedom of expression and the media.”

Turkey’s EU accession process is in any case stuck: effectively, it is hostage to the Cyprus dispute. The Committee said that, by undermining the force of EU leverage, the stalemate is having consequences that are detrimental to UK objectives in Turkey across a range of fields, including not only human rights but also energy and market access issues. The Committee found this especially regrettable given that Turkish democracy may be in a critical phase, and given the influence that Turkey may have at the moment over reforming Arab states. The Committee also said that, by creating uncertainty over the timing – if not the fact – of Turkey’s EU accession, the stalemate was discouraging both the EU and Turkey from starting to address some of the most difficult issues that would be involved in Turkey’s EU membership.

The Committee found that the Government’s continuing support for Turkey’s EU membership provided a strong basis for the further development of UK-Turkey bilateral relations, which the Government was correct to be pursuing. The Committee said that there was significant potential to expand UK-Turkey economic and commercial relations; and that as a foreign policy partner Turkey could potentially add value to UK foreign policy.

Source: UK Parliament

 

 

Bourse İstanbul inaugurated in gong ceremony

Turkish Prime Minister Recep Tayyip Erdoğan banged the gong on Friday to open Borsa İstanbul (Bourse İstanbul), a combined entity comprising the İstanbul Stock Exchange (İMKB) and local gold and derivatives exchanges.

Deputy Prime Minister Ali Babacan announced on Wednesday that the 28-year-old İMKB has come together with the İstanbul Gold Exchange and the Derivatives Exchange (İAB) under a single roof called Borsa İstanbul, or BIST.

The bourse was inaugurated in a ceremony on Friday attended by Erdoğan, Deputy Prime Minister Ali Babacan, EU Affairs Minister Egemen Bağış, Capital Markets Board (SPK) Chairman Vahdettin Ertaş and İbrahim Turhan, the recently announced head of the body.

Speaking at the ceremony, Erdoğan described the opening of the bourse as a historic move which he said will contribute to the project to make İstanbul an international financial center.

“The rate of Turkey’s economic growth in 2012 has surpassed that of the United States and the European Union countries… We are planning to pay off our remaining debt to the International Monetary Fund, $400 million, by the end of next month,” Erdoğan said.

He also commented on his government’s initiative to solve the conflict with the Kurdistan Workers’ Party (PKK), which he said has cost Turkey $300 billion since the terrorist group took up arms in 1984 with the aim of carving out a Kurdish homeland in Turkey’s Southeast.

Turkish state authorities have been holding settlement talks with the jailed leader of the PKK, Abdullah Öcalan, since last October with the aim of completing a timetable for the disarmament of PKK terrorists. Öcalan has significant influence among PKK members and supporters, and the state believes that talks with the terrorist leader will achieve their goals of a withdrawal of the terrorists from Turkey and, in the long run, disarmament.

The decades-old terror problem has not only claimed the lives of 40,000 people, but has also taken its toll on the Turkish economy, slowing down its pace of development and preventing its potential from being fully realized.

“A new era when Turkey will see huge economic development will begin once the solution process is concluded successfully,” Erdoğan said, adding that he hopes Turkey will be able to use its energy for the development of the country and the improvement of democracy rather that for the fight against terrorism.

The launch of a single bourse, or stock exchange, in the financial capital of İstanbul is part of a new Turkish law regulating capital markets. The law was published in the Official Gazette on Dec. 30, 2012. The decision to bring the separate trading entities under a single management arrives as part of plans to make İstanbul a regional financial center. The bourse plans to introduce index options in the second quarter of 2013 and foreign exchange options will start trading before the end of the year.

Source: Today’s Zaman

Photo: Anadolu Ajans, Metin Pala

Turkey’s soft-power on the rise despite challenges

Turkey as a regional actor and “source of inspiration” has started to become more active by resorting to soft-power tools, especially in the last decade. However, its rise is dependent on the continuation of elements that make it attractive in the first place, mainly a democratic outlook and the ability to combine Islam and modernity.

Turkey’s increasing profile and attractiveness is easy to detect even before looking at numbers, although surveys support the argument that the perception of Turkey is increasingly positive, particularly in its own region. Simply by observing the growing number of foreigners who visit Turkey, buy property here and establish regional headquarters, especially in İstanbul, one could argue that Turkey is not only the single democratic country in the Muslim world but that it has surpassed the threshold of being the only democratic country in the Muslim world.

Turkey’s clear ascendance is mostly owed to the successful economic performance of a stable single party government in the last decade. Coupled with the Justice and Development Party (AK Party) government’s proactive foreign policy approach, Turkey has become more visible in every respect. It is worth examining how Turkey’s soft power played an influence in the rise of the country. What is really meant by soft power needs clarification since it is widely and sometimes inappropriately used. Today’s Zaman talked to experts in an effort to provide fruitful debate on Turkey’s soft power and challenges it faces.

Soft power is a term coined by Harvard political scientist Joseph Nye. According to him, soft power is the ability of a state to attract and co-opt rather than coerce, use force or give money as a means of persuasion. Nye, whose definition of soft power has become universally accepted, writes that “a country may obtain the outcomes it wants in world politics because other countries — admiring its values, emulating its example, aspiring to its level of prosperity and openness — want to follow it.”

Nye, whose definition of soft power has become universally accepted, writes that “a country may obtain the outcomes it wants in world politics because other countries — admiring its values, emulating its example, aspiring to its level of prosperity and openness — want to follow it.”

Turkey frequently declares that it is willing to be a “source of inspiration” rather than a “model.” Talking to Today’s Zaman, Deputy Foreign Minister Naci Koru says, “Turkey is surely a source of inspiration for the countries in its region.” However, he immediately adds that “we refrain from presenting ourselves as a model since each country has its own dynamics and characteristics.” According to him, this does not mean that the Turkish experience is irrelevant. “Turkey can be seen as a source of inspiration rather than a model,” he says, reiterating the official position of Turkey.

Studying extensively Turkey’s soft power, Dr. Tarık Oğuzlu from Antalya International University first defines power as “the ability of one state to create a difference in the behavior of another state” and then says that whether it is hard or soft has something to do with how this power is exercised. According to him, if a state fears the other or even changes its behavior as a result of a cost-benefit analysis, there is hard power. Soft power, however, is in place if there is attraction and persuasion. “When you do nothing, but a country takes you as a model anyway, this is the most ideal form of soft power,” says Oğuzlu.

Nye: Turkey shows it is possible to reconcile Islam and democracy

According to him, “Turkey is not a soft power in the ideal sense of the term.” He calls Turkey “a civilian power,” which means shaping the behavior of other countries by means of economic instruments. He refers to a Turkey that has shown a tendency for persuasion in the last decade. Although he describes it as a positive step, according to Oğuzlu, when it comes to making a conclusion over whether there is soft or hard power, we need to see the results.

While not underestimating the contribution of Turkish TV shows and cultural and historical ties with its surrounding, Oğuzlu argues that “what we should look at is whether they generate results or not.” However, for another political scientist, Mensur Akgün, soft power cannot be measured. “We may presume but we cannot measure,” says Akgün as he adds that “we cannot rely on our soft power.”

While soft power may not be measurable, apparently perceptions of it are. Research conducted by the Turkish Economic and Social Studies Foundation (TESEV) in numerous Middle Eastern countries in 2012 showed that 69 percent of respondents had a positive opinion of Turkey, making it the most popular of the 18 countries in and around the region. However, this still marks a 9 percent drop over the previous year.

Asked why Turkey could be considered a model, respondents cited its economic performance (31 percent), democratic regime (21 percent), Muslim identity (18 percent) and the country’s strategic value (11 percent).

In accordance with these results, Professor Nye of Harvard University told Today’s Zaman that “Turkey is the first Muslim country in the region to show that it is possible to reconcile Islam with democracy, modernity and success.”

Has the Arab Spring tested the limits of Turkey’s soft power?

Although the idea of Turkey as a model found the most support in Libya, Tunisia, Palestine and Egypt, it received little support in Syria and Iran, which could only be expected given the rift between Turkey and these two countries over the situation in Syria.

In 2011, when the Arab awakening was young, the reasons Turkey could be considered a model in the region ranked in a different order: 32 percent of respondents identified Turkey’s democratic regime as the reason it could be a model, compared to 21 percent in 2012, and 25 percent identified Turkey’s economy, compared to 31 percent this year.

The survey also asked people in the Middle East why they would not see Turkey as a model. The reasons given were that it is “not Muslim enough” (17 percent), it has a secular political system (14 percent), its close relations with the West (13 percent) and it is not Arab (8 percent). Eight percent said there is no need for a model.

To explain the results, Dr. Oğuzlu said that for many years the region’s perception of Turkey was negative. “Turkey was seen as an extension of the West in addition to having the burden of an imperial past,” he stated. Coupled with the fact that Turkey had turned away from the region, its impact was limited until the AK Party government came to power, according to Dr. Oğuzlu.

According to Nye, “the Arab revolutions had roots in their own societies, but for some who wanted change, Turkey served as an attractive model.” However, he said that although Turkey will be “an important beacon in the region due to its stability, democracy and prosperity,” it will not be the only one. Moreover, Nye believes that the term “Arab Spring” is misleading “because these revolutions will take more than a decade to play out.”

When asked whether Syria has tested the limits of Turkey’s soft power, Oğuzlu said this question is open to discussion. Turkey wanted to persuade Syrian President Bashar al-Assad by means of dialogue and cooperation to follow Turkey’s advice, but these expectations collapsed, according to Oğuzlu.

“Which Middle Eastern actor has followed in Turkey’s footsteps without any effort?” Oğuzlu asked, answering himself with “none.” However, he added that since this is a process, “it would be unfair to argue that Turkey’s soft power was an illusion.”

An associate professor of international relations at TOBB Economics and Technology University, Şaban Kardaş, on the other hand, argues that there is “conceptual confusion” in terms of Turkey’s soft power and that as a result, “any increase in Turkey’s influence is seen as if it is soft power.” He calls this problematic because, for example, Turkey’s increasing economic interaction with the region is not soft power.

“In Iran and Syria, Turkey wanted to create a more peaceful atmosphere. It wanted to act as a mediator in the Iranian crisis and prevent the isolation of Syria from the world,” said Kardaş, noting that it only “partially” succeeded. However, he also said that Turkey lost some of its soft power in the wake of the Arab Spring. According to him, “Turkey was not able to use its influence to bring about a regime change in Syria, which is a sign of a decrease in its soft power.”

Turkey still has potential

However, Akgün believes that the Arab Spring had a positive impact on Turkey’s influence, “since the Arab Spring’s main aspiration was democratization and the current government explicitly supported the change towards democratization.” Yet, he warns about possible “scrutiny” of Turkey. “They are observing Turkey more closely and the deficiencies in the system are creating either disappointment for those taking inspiration from Turkey or vindication for those claiming that Turkey cannot be a model for them,” says Akgün.

Dr. Ömer Taşpınar from the Brookings Institution confirms the overall positive impact of the Arab Spring to Turkey’s attractiveness. According to him, in the competition between Turkey and Iran, “Turkey is by far the most attractive country in the region.” In addition, for him, “the Arab Spring also forces Turkey to address its own democratic deficit with the Kurds.” However, Taşpınar believes that “Syria showed the limits of Turkey’s influence” as it also put Turkey “firmly” in the Sunni camp.

Responding to a question on the limits of Turkey’s soft power, Koru, however, says that “it is the will and potential of Turkey which will determine the boundaries of its soft power.” In reference to Syria, he refrains from a debate as he says, “It may not be useful to define the boundaries of Turkey’s soft power by reference to geography or current developments in our neighborhood.” Yet, he believes that “in the last decade, Turkey has taken significant steps in furthering its soft power, but there is still a great potential.”

Taşpınar thinks that “the AKP believes it is a source of inspiration but the secularist circles are very skeptical because they don’t want to give credit to Erdoğan for Turkey’s success.” Despite the skepticism, limitations and challenges that Turkey faces in its region, there is an agreement among analysts that Turkey will likely continue to be a “source of inspiration” as long as it keeps growing as a successful example of coexistence of Islam and modernity. The surveys, however, reveal that Turkey’s soft power can only increase by setting an example, not imposing anything on anyone.


Ever-growing Turkish Airlines contributes to Turkey’s profile

Turkish Airlines (THY) has proven itself to be a national brand of the country and has received international awards for its service. The CEO of the company, Hamdi Topçu, says that “Turkish Airlines is one of the components of Turkey’s soft power.” Deputy Foreign Minister Naci Koru also defines THY as “a global trademark of Turkey.”

According to Topçu, who spoke to Today’s Zaman, Turkey’s soft power increased as a result of “the leap” in the field of foreign policy. For him, Turkey’s democratization at home and its economic development played a role in this leap. Topçu underlines that “the vision of Turkish Airlines overlaps with the vision of the government.”

Directing attention to the “sustainable growth” of THY, Topçu says the company contributes to Turkey’s soft power not only with its flight network but also for the sponsorship it provides to well-known sports clubs and events.

Currently, THY is the airline that flies to the greatest number of countries. It has flights to 98 countries and 219 destinations. It also ranks fourth in the flight web network. In 2012 alone, THY added 34 new destinations. Topçu says that by means of increasing the number of direct flights to the remotest places, they act as a facilitator for Turkish businessmen who were reluctant to take connecting flights beforehand. Topçu also adds that they work in cooperation with the Turkish Exporters Assembly (TİM) to promote their new destinations.

Turkey’s increasing access to Africa is also worthy of attention. THY currently flies to 34 points in Africa. In addition, Topçu says that of the 64 aviation agreements signed with various countries in the last decade, 38 percent were with African nations.

The opening up of THY flights to Africa almost goes hand-in-hand with the new diplomatic missions that the Ministry of Foreign Affairs has started abroad. In Africa alone, Turkey has opened 22 new embassies in the last three years.

Source: Sevgi Akarcesme – Today’s Zaman

Photo: Today’s Zaman

Boom on the Bosphorus

Lots of young people, eager to shop and play online: no wonder Turkey’s internet industry is crowded.

 

MUSLIM farmers do not keep pigs. This is as true of those who play at virtual agriculture as of those who fill physical food-troughs. So there are no pigs in the Arabic version of “Happy Farm”, published by Peak Games, a young firm based in Istanbul. For the same reason “Happy Farm” has no vineyards, and female farmhands wear the hijab. Local tastes matter.

Peak Games has found rich soil. It already employs 200 people and has developers in Jordan and Saudi Arabia as well as Istanbul and Ankara. More than 35m people play its games at least once a month, many of them on Facebook. Half of the players are in Turkey; the rest are in the Middle East and north Africa. Rina Onur, one of its founders, says that she and her colleagues saw a gap in the online-games market that companies catering to Western tastes could not fill. So Peak Games offers people in Turkey and nearby countries games with a regional twist, like “Happy Farm”, as well as online versions of traditional amusements. Okey, a Turkish game played with tiles, is most popular.

Turkey is bursting with internet companies, many of them selling things to the young. It is not hard to see why. The country is big, youthful and embracing the internet eagerly. Half of its 75m people are under 30. Around 44% of Turks use the internet, up from just 14% in 2006 and 3% in 2000. They comprise Facebook’s seventh-largest national audience. Turks are also happy to use credit cards, which are handy for buying things online: the country has three of them for every five people, says GP Bullhound, an investment bank, more than the European average. And the market still has a lot of room to grow. Penetration rates are well below those in western Europe (see chart).

Several companies have attracted foreign money. Peak Games has raised $20m. In September General Atlantic, an American investment firm, and others put $44m into Yemeksepeti, through which Turks order meals for delivery from local restaurants. In 2011 Naspers, a South African media company, paid $86m for 68% of Markafoni, an online fashion club; eBay raised its stake in GittiGidiyor, an auction site, to 93%, and Kleiner Perkins Caufield & Byers and Tiger Global Management, both based in America, invested $26m in Trendyol, another fashion site.

Typically, Turkish internet companies have borrowed business models from abroad and given them Turkish tweaks. Mustafa Say, whose iLab Ventures owns the other 7% of GittiGidiyor, says that buyers pay into an escrow account, from which money is sent to sellers only when goods turn up. That, he says, has helped to build trust. Yemeksepeti’s customers pay nothing extra for delivery and can pay in cash on the doorstep. This still accounts for 37% of sales, says Nevzat Aydin, a founder and its chief executive. Not only money and ideas have come from abroad. So have people: returning Turks, most of them equipped (like Mr Say and Mr Aydin) with American education and experience.

The size of the Turkish market is a “double-edged sword”, says Numan Numan, a former Goldman Sachs banker now at 212, a venture-capital firm which takes its name from the telephone code for the European side of Istanbul. Scale at home is a boon, but start-ups in smaller countries, such as Israel or Estonia, have more incentive to look beyond their borders from the outset. Of the six Turkish firms in which 212 has invested, Mr Numan expects “a minimum of four to go regional at least”.

Turkish internet firms think they have a good base from which to expand, especially into the Middle East and north Africa. Peak Games is perhaps the best example, but others also have ambitions. Because Turkish television and culture are popular in the region, endorsements by Turkish celebrities can help to sell clothes and shoes. General Atlantic’s money will partly finance Yemeksepeti’s move abroad.

Lots of others are hoping to follow the successes. In November, in a hall at Bilgi University in Istanbul, 20 young Turkish companies coached by Bootcamp Ventures, the event’s organiser, presented their plans to prospective investors.

Events like this, Bootcamp’s fifth in Turkey, have become common. “When we started here six years ago,” says Didem Altop of Endeavor, a non-profit organisation which seeks to encourage entrepreneurs in countries from Brazil to Jordan, “there used to be three events a year. Now there are three a day.”

Turkey has so far been short of “angel” investors who will sprinkle money on a seedling company without demanding most of its equity. That is changing, as the first generation of founders become investors and mentors for the next. In Galata Business Angels, Istanbul has a network of such people including Mr Numan and Sina Afra, co-founder of Markafoni. Incubators are being set up: at Enkuba, in Istanbul, Piraye Antika, a former local head of HSBC, a big bank, and her colleagues have taken on Bu Kac Para Eder, which values antiques online, and torpilli, which helps students preparing for university-entrance exams.

The government’s policies have been a bit disjointed, says Ms Altop, but are becoming more concerted. Young companies can already get grants for research and marketing; those in “technoparks” are excused some taxes. More encouraging is the prospect of tax breaks to accredited angels, which are due to come into effect soon. Most start-ups will fail, as they do everywhere: fashion and daily deals, in particular, look horribly crowded. But more of them may get the chance to emulate those already on the road to success.

Source: The Economist