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he Republic of Turkey hosted a NATO Summit once again after a gap of twenty-two years. Whilst the Ukraine–Russia War has triggered a shift in the perception of threats in Europe, the emergence of new security risks stemming from a potential US/Israel–Iran conflict has further heightened the importance of the Summit. Statements made by heads of state and government prior to the Summit indicated that it would be the most significant gathering in recent years in terms of ‘outcomes and decisions taken’.

In this context, the fact that NATO’s future vision was shaped in Ankara, given that NATO is itself a security organization, holds particular significance. Turkey’s central position within NATO, as well as its capabilities in the defense and aerospace sectors, are drawing attention in the context of the Alliance’s future. When the final communiqué is considered, it is evident that NATO is transitioning to a new security architecture referred to as the ‘3.0 era’.

Whilst Ankara hosted the 36th NATO Summit of Heads of State and Government, defense spending and the defense industry were at the heart of the strategic decisions taken by the Alliance in Ankara. Ensuring that Alliance partners adhere to the stated commitment regarding the targeted defense spending limits was a priority. In parallel, the development of defense and security cooperation and relations came to the fore. Discussions held throughout the Summit centered on the role of the capabilities achieved by the Turkish defense industry in the Alliance’s future, and how and to what extent these capabilities could be utilized.

In addition to the statements made, the Defence Industry Forum held as part of the Summit addressed potential areas for Alliance partners to work together and build a sustainable ecosystem. Hosted by the President of the Turkish Defence Industry, Prof. Dr Haluk Görgün, and organized at TUSAŞ as part of the NATO Summit Defence Industry Forum (NSDIF), a reception was held where the capabilities of the Turkish defense industry were demonstrated to participating delegations through both flight displays and an exhibition in the static display area.

Burden-sharing among allies

As part of the Summit, the defense industry forum (NSDIF) – which marked a number of firsts – was held at the ATO Congresium. As announced by NATO, bilateral and multilateral military, security and cooperation agreements were signed for the first time under the NSDIF’26 framework. The agreements, estimated to have a total value exceeding 50 billion dollars, were primarily structured around the following key areas: defense investments and the Alliance partners’ ‘5 per cent’ commitment, capacity enhancement through multinational cooperation, the development of defense industry partnerships, and the improvement of processes from serial production to sustainment. Within the framework of NSDIF’26, emphasis was placed on the importance of developing high-tech and innovation-focused solutions tailored to the evolving battlefield.

NATO’s long-standing target of 2 per cent defense spending was accepted by Alliance partners as a radical increase to “5 per cent” in response to the growing and evolving threat perception. Recently, assessments have been carried out regarding the independent and collective activities undertaken to achieve this objective. Whilst the aim is to significantly increase burden-sharing within the Alliance, the objective is to enter a new era in which allies outside the US (Europe and Canada) directly assume their own security responsibilities. Whilst the concept of “strategic autonomy” is being defined within the Alliance, the initial objective is to establish the financial infrastructure.

The aim is for Alliance partners to increase their defense spending to 5 per cent of their gross domestic product (GDP), which represents a significant economic volume, whilst also developing production capabilities beyond mere procurement. However, the fact that multinational projects implemented, particularly in Europe, have failed to deliver the desired results, due both to their lengthy timelines and their structural nature, has opened the door to alternative approaches: the “Trusted Partner”. Although Turkey has been a NATO member for a quarter of a century, the fact that its capabilities in the defense industry have not been ‘effectively’ utilized within the Alliance has been a subject of debate, particularly over the last 10 years. Turkey, an Alliance member that has also been subject to both covert and overt embargoes, is now being highlighted as a central actor in NATO’s new era.

Mass production capacity and centralized production

The Ukraine–Russia War has highlighted the inadequacy of stockpiles and inventories amongst the world’s armed forces in the face of protracted conflict. Furthermore, a similar scenario has manifested itself in various forms within the US-Israel-Iran triangle. In the face of the reality of the ‘war of attrition’, which has been redefined in the present day, it is imperative that allies ensure their stocks of ammunition and military equipment are sustainable. The signing of supply agreements at the summit, totalling over 50 billion dollars, aims to transform the defence industry from a purely commercial sector into a direct deterrent. In this context, particular attention was drawn to items with high consumption rates, such as artillery ammunition, aircraft bombs and air defence missiles. In this regard, the allies’ efforts – for example, Canada’s increase in artillery ammunition production capacity and Turkey’s allocation of additional funding for the ‘Iron Dome’ air defence systems – were the first examples to be highlighted.

Attention was drawn to the negative effects of projects implemented in a multinational framework in European countries, both on the execution of the projects and on production capacity and capabilities. In assessments aimed at improving this situation, ‘project management’ and ‘autonomous/centralised’ approaches emerged as key priorities. The aim is for key actors in projects to be carried out on a multinational basis, as well as allied nations acting as subcontractors, to implement more effective process management. In this way, both the production capabilities and key areas such as sustainment and logistics of projects carried out on a multinational basis are being improved. Furthermore, Turkey’s long-standing vision of “lifting covert and overt embargoes between allies” aligns directly with this topic addressed at the Summit.

NATO is demonstrating increasing sensitivity regarding the management of interoperability amongst allies. Multinational collaborations are being implemented whilst taking into account the operational needs of the allies. The decision taken at the Ankara Summit to strengthen the transport aircraft fleet, in addition to the NATO-led tanker aircraft fleet, underscored this commitment. The fleet to be established with A400M transport aircraft will be operated to meet the operational needs of the allies. In addition to the transport fleet, in which the Turkish defence industry also holds a share, Turkey will take a leading role in establishing a space-based communications and early warning system through the IMECE project.

The allocation of an additional $24 billion budget for the Iron Dome is significant not only for Turkey but also for the Alliance’s air and missile defence capabilities. Roketsan’s demonstration of its missile systems in the field of precision-guided systems also attracted attention. Turkey’s capabilities in mass production and high technology are being utilised more actively than ever before to meet diverse requirements. In particular, Turkey has gained increasing importance in recent times with solutions such as cyber security and encrypted communications. As emphasised at the Summit, NATO aims to structure its capabilities not only around assets such as ships and aircraft, but also through integrative elements such as cyberspace, communications and intelligence.

Conclusion: An increasing role and key messages

As part of the NATO Defence Industry Forum, the capabilities of the Turkish defense industry were demonstrated to participating delegations at a reception held at TUSAŞ, through both flight displays and an exhibition in the static display area. The delegations were greeted by the modern instruments of the battlefield on display: the Altay tank, ARMA armored vehicles, MKE’s TOLGA air defense solution, ROKETSAN’s ballistic missiles, and Baykar and TUSAŞ’s manned and unmanned aerial platforms. In addition to all this, demonstrations were held to showcase the current state of the aviation sector: the GÖKBEY general-purpose helicopter, the T129 ATAK attack helicopter, the HÜRKUŞ basic trainer aircraft, the HÜRJET advanced jet trainer, the ANKA III strategic bomber, the ANKA-S, the Bayraktar AKINCI UAV and the Bayraktar TB3 unmanned aerial vehicle, all of which demonstrated their capabilities through flight displays.

The capabilities of the Turkish defense industry were demonstrated to delegates not merely through a ‘catalogue’, but directly at the production facilities and via live flight demonstrations. The presence of both executives and project engineers from the relevant companies on site enabled the evaluation of both the products and potential partnerships. In short, the reception provided a unique platform for increasing defense and aerospace exports and establishing new partnerships.

Turkey’s production of systems that are fully compliant with NATO standards (STANAG) and have proven themselves on the battlefield supports strategic interoperability within the Alliance. This, in turn, enables Turkey to export significant quantities of defense systems to its Alliance partners. According to 2025 figures, 56 per cent of Turkey’s exports, totaling 10.56 billion dollars, were made directly to the European Union, NATO member states and the United States. These figures are, in themselves, a testament to the quality and reliability of Turkish defence industry products, which meet Western standards. Furthermore, there is a growing interest in products that have proven themselves on the battlefield.

This reinforces the desire to implement ‘joint projects’, as seen during Belgium’s recent high-level visit to Turkey. The Belgian firm developing the turret proposed to Turkish land vehicle manufacturers: “Let’s integrate our turret into your armoured vehicle and sell them together.” In every discussion regarding Turkey, the door to cooperation is being opened with the message: “You have high-quality products, and we want to benefit from working with you.” Meanwhile, Spain’s supply of the HÜRJET fighter aircraft, Portugal’s warships, Italy’s unmanned aerial vehicles (UAVs) and Poland’s electronic warfare systems are strengthening Turkey’s central position within the Alliance in this field.

In short, the Ankara Summit is more than just a platform for delivering political messages; it represents a critical turning point where the obstacles to defense industry cooperation among allies will be discussed. It was clearly emphasized at this summit that any form of export restriction or covert embargo imposed by allies against one another under the NATO umbrella ultimately weakens the Alliance’s own collective deterrence. It is abundantly clear that Turkey’s high-tech production capacity is not a competitive factor to be excluded or restricted amongst allies. Turkey’s position should be viewed as that of a ‘regional production hub’ which will optimize the Alliance’s overall capabilities whilst also reducing logistical costs.

(Originally published in Turkish by Kriter)

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he stability of political regimes is assessed through the nature of the relationship between the normative power of the constitutional order and the depth of social legitimacy. The mere existence of a constitution, the meticulous construction of the institutional architecture, or the explicit definition of the principle of the separation of powers in legal texts does not, in itself, guarantee the security of the regime. The true resilience of regimes is revealed in the attitudes of social actors towards the source of legitimacy during times of crisis. In this context, coups are not merely power struggles targeting the institutional continuity of the state; they are attempts to forcibly answer the question of who will exercise sovereignty.

In political science literature, a coup is defined as an attempt by an organized group within the state apparatus to seize executive power through the use of force or the threat of force, by suspending constitutional and legal procedures. In this context, coups signify not merely a transfer of power, but the detachment of political legitimacy from its institutional foundation and its subsequent reconstruction through power relations. Studies on coups indicate that such interventions are more likely to occur in regimes characterized by a low level of institutionalization, where the capacity for consensus among civilian political actors is weak and power centers within the state are fragmented. In systems where political institutions are not sufficiently entrenched, power struggles may turn to the direct use of force rather than relying on electoral, parliamentary or legal mechanisms.

Discussions on military tutelage reveal that when the military goes beyond its role as an institution ensuring security against external threats to assume a supervisory and directive role over the political sphere, it weakens democratic processes. When the military positions itself as the ultimate guardian of the regime or the arbiter of its ideological boundaries, it limits the decision-making capacity of elected civilian authorities and erodes democratic accountability. In such a structure, the military begins to be perceived as a legitimate actor capable of intervening in politics. This situation becomes one of the fundamental structural obstacles to democratic consolidation.

Institutional veto capacity

Analyses of democratic fragility emphasize that the institutional veto capacity of anti-regime or extra-systemic actors is decisive during periods of crisis. Situations such as economic crises, social polarization, governance failures or loss of legitimacy can increase the fragility of the political system, creating a fertile ground for anti-democratic interventions. During periods when coordination among the state’s key institutions breaks down and social consensus weakens, coups emerge as the result of a broader regime crisis. For this reason, modern literature explains coups not so much in terms of the will of individual actors, but rather through institutional weaknesses, power balances and fragilities within the regime’s structure.

When Turkish political history is examined through these theoretical frameworks, it becomes apparent that the tension between democratic representation and authoritarian power centers is a persistent feature. From the time of Ottoman modernization onwards, the positioning of the military and bureaucratic elites as the state’s founding and protective actors has led to political legitimacy being constructed in a state-centered manner rather than from a social base. During the Republican era, this structure gained institutional continuity; following the transition to a multi-party system, however, a structural conflict emerged between political legitimacy derived from elections and the tradition of tutelary intervention.

Given this historical background, the coup attempt that took place on the night of July 15, 2016, cannot be regarded as an isolated security incident. This event marks a critical threshold in Turkey’s tradition of intervention, which spans nearly two centuries, and constitutes a historic turning point in the societal defense of democratic legitimacy. The uniqueness of the event is evident in the scale of the attempt, the level of violence involved, and the nature of the societal reaction it provoked.

Pre-Republican political structure

To understand the sociological roots of coups in Turkey, one must examine the pre-Republican political structure. During the classical period of the Ottoman Empire, whilst central authority appeared strong, power relations were shaped by the balance between the palace bureaucracy, the military elite and regional power centres. With the process of modernisation, the centralisation of military reforms within state transformation significantly increased the political weight of the army.

The deposition of Sultan Abdülaziz in 1876 is one of the clearest indications of the Ottoman state elite’s capacity to intervene in the transfer of power. The power structure established by the Committee of Union and Progress after 1908, meanwhile, deepened the institutional intertwining of military-political relations. Consequently, the mindset that the military elite possessed the right to determine the direction of the state became deeply entrenched.

The central role of the military in the founding of the Republic not only failed to bring this historical legacy to an end but also provided it with a new basis of legitimacy. The military background of the founding generation fostered the notion that the military bore a special responsibility for the regime’s survival. In subsequent periods, this understanding formed the institutional basis for the tutelary mindset that argued democratic politics must be kept within certain limits.

Prime Minister Adnan Menderes

The transfer of power in Turkey following the 1950 elections represented a historic advance in terms of democratic representation. However, this transition did not eliminate tutelary reflexes. The coup of 27 May 1960 is the clearest illustration of this reality.

May 27 signifies the overthrow by armed force of an elected, democratic and legitimate government – that is, the will of the people as expressed. The execution of Prime Minister Adnan Menderes and two of his ministers following the intervention constituted a punishment directed against the will of the people. This event represents a deep fracture in the collective memory of Turkish democracy. One of the coup’s most significant consequences was the normalization of military intervention as a legitimate political tool. An event as horrific and repugnant as the coup itself is the fact that this tragedy was declared a public holiday and celebrated for years…

The constitutional order established after 1961 granted military and bureaucratic institutions the power of veto over the system. Thus, a hybrid structure emerged—democratic in appearance, but fundamentally encircled by mechanisms of tutelage.

The March 12, 1971, memorandum demonstrated that the political arena could be forcibly restructured without directly seizing power. The fact that Parliament remained open does not imply that the intervention was of a civilian nature, as political decision-making processes were shaped under military pressure.

The coup of September 12, 1980, on the other hand, radically transformed Turkey’s social and institutional fabric. Parliament was closed, political parties were dissolved, and fundamental rights and freedoms were suspended. This period marked a phase in which state violence intensified on an institutional scale. Detentions, torture, bans and a climate of severe repression produced deep traumas in the collective memory.

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hen one thinks of the Middle East and Iraq, the first thing that springs to mind is often oil. However, developments in Iraq over recent weeks have once again demonstrated that oil is no longer merely an economic resource, but a strategic factor that determines state capacity, foreign policy and the regional balance of power.

Following the tensions between Iran and the West, the reopening of the Strait of Hormuz provided short-term relief in global energy markets. However, for Iraq, this process did not merely signify a return to normal oil sales. The Baghdad administration has also brought back onto the agenda its long-delayed objectives of increasing production and securing a higher quota within OPEC.

Whilst this may appear at first glance to be merely a matter of energy policy, there is a larger story behind the issue. As is well known, oil is both the most vulnerable and the seemingly strongest aspect of the Iraqi economy. Oil revenues bear the main burden of the state budget. Many sectors, ranging from public sector wages to infrastructure investment, and from security expenditure to social payments, are dependent on this revenue. Consequently, every fluctuation in international markets comes to the attention not only of the economic bureaucracy but also of political decision-makers in Baghdad. Even a slight decline in oil revenue can place significant pressure on the state.

The messages conveyed by the Iraqi government in recent weeks are therefore noteworthy. On the one hand, new international investments are being discussed; on the other, it is stated that production capacity can be rapidly increased. The recent interest shown by major energy companies in oil fields suggests that Baghdad wishes to draw up a long-term growth plan. The recent increase in production in the southern oil fields also emerges as a development serving the effort to boost capacity.

Turkey-Iraq talks

However, the main issue in Iraq is not merely about producing oil. The real challenge facing Iraq is determining via which routes, with what political guarantees and within what economic framework it will deliver the oil it produces to the world market. From this perspective, the renewed intensive energy talks between Turkey and Iraq carry particular significance. The topics on the agenda between Ankara and Baghdad point to a broader framework than merely the technical operation and capacity expansion of the Kirkuk–Ceyhan pipeline: oil, natural gas, electricity, energy supply security and the energy dimension of the Development Corridor.

The Kirkuk–Ceyhan pipeline, which has passed through Turkey for years, has become one of the most critical elements of this equation. The recent talks between Ankara and Baghdad, which have focused on energy cooperation, do not merely signify the renewal of a technical agreement. It appears that the two countries are seeking ways to establish a new energy architecture that will adapt to the changing regional geopolitical landscape. The duration of the agreement, the pipeline’s capacity, the transport of oil to the Mediterranean, and Iraq’s need to diversify its export routes are all being discussed at the same table.

The situation is equally significant not only from Iraq’s perspective but also from Turkey’s. Turkey has long aimed to be a country that manages energy corridors. One of the fundamental and most important pillars of this strategy is the secure delivery of Iraqi oil to the Mediterranean. For this reason, stable energy relations with Baghdad will also serve as a key tool in building political trust. An energy corridor stretching from southern Iraq to the north, and from there to Turkey and the Mediterranean, will form part of a broader picture encompassing regional trade, transport and security.

Iraq, meanwhile, has learnt the hard way in recent years the risks of relying on a single export route or a single regional balance of power. Crises in the Strait of Hormuz, the prospect of regional war and the occasional disruption of export routes in the north are prompting Baghdad to develop alternative routes. Iraq must now define its energy security not only in terms of production capacity but also through the diversity of its export routes. Consequently, the future of the Kirkuk–Ceyhan pipeline has become a key indicator of Iraq’s capacity for economic sovereignty.

Anti-corruption operations

Amidst all this, another notable development has been the anti-corruption operations being carried out domestically. The operations in Baghdad, which have targeted high-ranking figures, send a significant message regarding the corruption networks that have long been the subject of discussion within state institutions. Of course, it cannot be expected that a few operations will eliminate decades-old institutional problems. However, the rule of law and transparency in public administration will be just as decisive as oil in shaping international investors’ view of Iraq.

Similarly, the US’s resumption of dollar transfers to Iraq should not be interpreted merely as a technical financial decision. This step demonstrates that economic ties between Washington and Baghdad have not been completely severed, but that issues of security, militias and financial oversight remain on the table. It has once again become clear that economic and security issues cannot be addressed in isolation from one another.

Viewed in the light of these developments, Iraq today stands at what is perhaps one of the most critical economic thresholds of the post-2003 era. Whilst the country is striving to attract major energy investments on the one hand, on the other it is seeking to strengthen public administration, strike a balance in its foreign relations and keep as far away as possible from regional crises. If successful, it could not only become a country that increases its oil production but also emerge as a new regional actor at the centre of energy, trade and transport corridors.

However, it is clear that oil revenues alone will not be sufficient for this to happen. Institutional reforms, legal predictability, investment security and sustainable relations with neighbours are just as important as new oil fields. The fundamental challenge facing Iraq is not actually extracting oil, but utilising oil revenues for the benefit of the state. To the extent that Baghdad succeeds in this, it may cease to be a conflict zone where regional crises persist.

From Turkey’s perspective, too, it would be insufficient to view developments solely through the prism of the oil trade. Iraq’s transformation into a stable, economically strengthening country open to regional integration will serve Ankara’s interests across many areas, from security to trade, and from logistics to energy. Consequently, in the coming months, we will be monitoring not only whether Iraq can produce more oil, but also whether it can channel this oil into political stability and economic development.

(Originally published by Middle East Africa website in Turkish)

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rom a macroeconomic perspective, gold savings kept under mattresses represent idle wealth. It is estimated that Turkish households hold around 4,000–4,200 tonnes of gold. At current prices, this is worth around $550 billion. Of this amount, 1,000–1,200 tonnes are held within the financial system (in the Central Bank and in bank gold accounts), while an estimated 3,000 tonnes remain outside it. In other words, it is estimated that there are 3,000 tonnes of gold under mattresses, with an economic value of 415 billion dollars! In my opinion, it is worth even more than half a trillion dollars!

The equivalent of the current situation

If you ask what this figure means, I will briefly explain: it represents around 30 KAAN-scale defense industry projects. It signifies the end of structural unemployment in Türkiye, with 8,300 factories employing 4 million people. It means around 500 world-class universities. It means 1,400 city hospitals, each with 1,000 beds. It means becoming Europe’s largest energy powerhouse with 380,000 MW of wind energy capacity. It also means 700,000 MW of solar energy capacity. This is six times Türkiye’s current installed electricity capacity, which would eliminate the need for energy imports and close the current account deficit. Shall I continue? It means 400 Eurasia tunnels, 185 Çanakkale bridges and 350 Osmangazi bridges. Therefore, the question we are seeking an answer to is very valuable. We need to address the issue within this framework.

According to a 2025 ING Türkiye study, physical gold held under mattresses is the most popular savings instrument in our country (35 per cent). It is not difficult to guess what comes second: cash foreign currency held under mattresses (28 per cent). Third on the list are TL deposit accounts (21%), and so on.

In order to answer the question of how to bring gold held under mattresses into the financial system, we must first understand why it is outside of it and grasp the characteristics of the saver.

There are two essential pillars of the economy: trust and stability. The above figures clearly show that Türkiye’s long-standing preference for gold stems from a lack of trust in the financial system. Past periods of high inflation, collapsed banks and financial crises have damaged the trust of the Turkish people. Combined with religious sensitivities, this has led to the widespread accumulation of physical gold over the years, with people adopting the mindset of ‘just in case, I’ll keep it under my control’.

What has been done so far?

Over the past fifteen years, various tools have been introduced in Türkiye to incorporate ‘mattress gold’ into the financial system. For example, in 2011 the Central Bank of the Republic of Türkiye (CBRT) introduced a gold option to its Reserve Requirement Mechanism (RRM), leading to the development of gold banking. Banks drew physical gold into the system through gram gold accounts. However, the requirement to import gold in order to reach the targeted volume limited the release of existing under-the-pillow stocks. Although approximately 60 tonnes of gold were brought into the system in subsequent years through scrap gold campaigns organized by banks and collaborations with jewelers, society’s adoption of gold as a financial instrument remained limited.

In 2017, the Treasury and Finance Ministry issued gold bonds and gold-backed lease certificates, which aimed to build trust by allowing physical gold to be redeemed in kind at maturity and offering additional returns in gold. However, these lost their appeal in an environment of high inflation, and the amount collected remained limited to a few tonnes. The Mint Gold Certificate, issued by the General Directorate of the Mint and Stamp Printing House and traded on the Istanbul Stock Exchange since 2022, has attracted new investment to the market by offering the opportunity to invest in small amounts of digital gold in a safe way. However, it has not significantly reduced the existing stock of gold.

Over the past fifteen years, various tools have been introduced in Türkiye to incorporate ‘mattress gold’ into the financial system. For example, in 2011 the Central Bank of the Republic of Türkiye (CBRT) introduced a gold option to its Reserve Requirement Mechanism (RRM), leading to the development of gold banking. Banks drew physical gold into the system through gram gold accounts. However, the requirement to import gold in order to reach the targeted volume limited the release of existing under-the-pillow stocks. Although approximately 60 tonnes of gold were brought into the system in subsequent years through scrap gold campaigns organized by banks and collaborations with jewelers, society’s adoption of gold as a financial instrument remained limited.

Consequently, while these instruments have provided technical diversity, they have failed to fundamentally resolve the issue of gold held under mattresses, as they have not fostered the strong trust and behavioral transformation required to bring gold into the system without selling it or undermining the sense of ownership.

Why was It not successful enough?

This situation is better explained by structural factors relating to trust, behavior and perception than by a lack of technical tools. Research shows that a significant proportion of citizens view gold as ‘too valuable to entrust’ and are deeply mistrustful of handing it over to banks and the state. It is also important to highlight a paradox regarding trust. Although negative responses to calls to enter the system are driven by a lack of trust, it should also be noted that some citizens deliver their gold to local jewelers in the hope of making a profit.

Another reason is that the financial returns offered are not appealing to individuals. In a high inflation environment and at a time when gold prices were already rising strongly, the annual returns of 0–2.4 per cent offered on gold deposit accounts and gold bonds were not considered attractive; in some products, the fact that the return was in Turkish lira reinforced the feeling of relative loss when the gold price rose. Concerns about liquidity and access also played a part: while physical gold held at home can be converted into cash immediately, individuals perceived the maturity, procedures and physical delivery conditions in the banking system as a loss of flexibility.

In addition, the loss of craftsmanship and sentimental value when gold jewelery is brought into the system makes it difficult to convert gold, particularly family heirlooms, into financial instruments. The perception that registration could pose future risks through taxation, questioning or possible regulations has also led to a continued belief that keeping gold unregistered is ‘safer’. In these circumstances, the state’s objectives of strengthening reserves and financing have not been sufficiently aligned with individuals’ motivation to protect themselves from uncertainty.

International comparisons: The situation and models in other countries

International comparisons show that hoarding gold is not a universal problem. Rather, it is closely linked to a country’s cultural structures, the depth of its financial system, and the relationship between the state and its citizens. The issue is more prevalent in countries with a cultural affinity for gold. In contrast, in economies with robust financial infrastructures and high levels of trust, gold accumulation is not considered a policy issue.

International comparisons reveal that Türkiye and India have taken the most concrete steps towards incorporating gold held in private hands into the financial system, but the outcomes vary significantly between countries.

Leasing model

The gold leasing model is based on the principle of providing financing to the real economy without selling the gold held in people’s homes and without changing ownership. At the same time, it generates returns in gold for the owner of the gold. This approach aims to transform gold from a mere store of value into a productive asset. The model’s fundamental promise is that ‘gold earns gold’; in other words, investors focus not on monetary interest, but on increasing the amount of gold they hold.

Working principle of the gold leasing model

This structure is based on a three-way relationship between the gold-owning investor, the business using the gold and the intermediary platform. Investors entrust their physical gold to the platform for safe storage in vaults, and the gold is leased through the platform rather than directly. Payment in the form of gold returns is a critical element that eliminates inflation and currency risk.

Businesses that lease gold are usually jewelers, refiners, miners and industrial firms that use gold in their production processes. By leasing gold instead of purchasing it, these businesses can produce goods without tying up capital, gain natural protection against price fluctuations (hedging), and obtain off-balance-sheet financing. The lease term is usually short-term, but can be renewed if both parties are satisfied. The platform’s role is to match investors with businesses, perform risk analysis, manage contracts and provide secure storage.

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he word “cloud” sounds ethereal—light, floating harmlessly above us. Then you step into a data center, and the romance hits a wall of concrete. The digital world is not made of mist. It is built from industrial chillers, heated copper, and the constant drone of fans pushing hot air away from machines that never sleep.

Once you adjust to the noise, a blunt fact remains: the AI boom has turned technological competition into a raw contest for electricity.

We call this competition “digital,” as if it lives in a weightless realm of code. In practice, it has the heavy texture of transformers, substations, permits, and long lead times. Strategic advantage will belong to countries that can build boring things fast—lines, switches, redundancy—without breaking public trust.

Unlike office towers that sip energy with polite moderation, data centers are voracious. They devour power steadily, day and night, punishing any grid that fluctuates. A single facility can rival the electricity demand of a town while employing surprisingly few people on-site. That imbalance creates political strain. When grids struggle, governments reach for whatever delivers capacity quickly. What begins as a “temporary” fix has a habit of becoming a new default.

Major technology firms are no longer just buying power; they are shaping how it is produced, secured, and priced. Renewables remain central to corporate branding, but reliability is the non-negotiable. Solar goes dark at night. Wind can stall. Data centers cannot pause because the weather is inconvenient.

The grid is no longer background infrastructure. It is industrial policy.

The strategic pivot

Türkiye enters this global electricity squeeze at a critical moment. The country is being offered a chance to be more than a consumer of cloud services—it is being invited to host the engines of processing themselves.

One marker is the Turkcell–Google Cloud partnership, which envisions a new cloud region in Türkiye and a $1 billion multi-year push into data centers and cloud technologies through 2032. For a country long positioned as an energy corridor, the prize is distinct. Sovereignty in the 21st century is not only about pipelines and transit routes. It is also about hosting the machines that refine data into economic and strategic value.

But this digital ambition rests on a physical foundation: The grid. The World Bank’s power transmission modernization project underscores a reality that policy debates too often soften: If you want scale in the digital economy, you must modernize transmission, integrate renewables, and improve reliability.

Data centers are indifferent to geopolitical slogans. They run on one thing: Electrons arriving on schedule.

The bill on the kitchen table

Türkiye’s physical backbone will set the ceiling for its digital ambitions. The strategic question is not whether Türkiye can attract data centers. It is whether Türkiye can integrate them without turning the AI boom into a domestic legitimacy problem.

Legitimacy here is not abstract. It is the bill on the kitchen table.

Nobody votes for a data center, but everyone feels its footprint. A hyperscale facility can draw enough power to change the mood of a city while employing a small team on site. The optics can turn quickly: A massive, windowless complex rises on the outskirts of town, consumes an outsized share of local electricity, and receives priority connections. If households experience price pressure—or brownouts—while that facility appears “protected,” the story stops being “strategic investment” and becomes resentment.

Industrialists will not miss the shift either. Factory owners worry about voltage dips halting production lines and unpredictable outages damaging equipment. If the grid creates an informal hierarchy where data centers eat first and manufacturers eat last, the economic fallout will be measurable.

Hosting global compute can be a national advantage, but only if it does not undermine the perceived fairness of energy access at home. A state can sell a grand digital vision to investors. It still has to explain that vision to citizens who experience the grid as daily life.

The hidden water battle

Electricity is the headline constraint, but water is the quiet second front.

Cooling demands vary by facility design and climate, yet they can be substantial. In a country increasingly exposed to water stress and seasonal volatility, this matters. Municipal systems are not built for sudden industrial-scale cooling needs alongside growing residential demand.

The politics here is local and immediate. If a municipality must weigh irrigation against industrial cooling in a dry season, the conflict moves from engineering meetings into public pressure. Water disputes tend to escalate faster than electricity debates. Price hikes generate anger; water shortages generate fear. A serious data center strategy must treat water governance as part of digital governance, not an afterthought.

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ürkiye’s fish production reached a historic high of 1.02 million tons in 2025, marking the largest output in the history of the Republic, Agriculture and Forestry Minister Ibrahim Yumakli said on Wednesday.

Speaking to Anadolu Agency during a meeting with fishermen in Istanbul’s Sariyer district on the final day of 2025, Yumakli said production planning and quota systems played a key role in achieving the record.

“Fish production in Türkiye reached 1.02 million tons in 2025, breaking an all-time record in the history of the Republic,” he said, calling the figure “massive.”

Yumakli said the fisheries sector made a major contribution to the national economy, with exports nearing $2 billion in 2025.

He noted that climate change continued to affect the sector, citing rising sea temperatures and shifting fish migration routes, but said the year was completed without major disruptions.

“Sometimes these conditions made the year challenging, sometimes easier. Overall, we completed 2025 without serious problems,” he said.

Aquaculture leads production growth

According to preliminary data from the Agriculture and Forestry Ministry, around 600,000 tons of total production came from aquaculture, while roughly 400,000 tons were obtained through capture fisheries. Final figures are expected to be released by the Turkish Statistical Institute in June.

Anchovy production exceeded expectations, reaching about 245,000 tons, Yumakli added.

The minister stressed the importance of balancing conservation with sustainable use of marine resources, thanking fishermen and fish farmers for complying with regulations.

“2025 was a year in which our fisheries sector made a very important contribution to Türkiye’s economy,” Yumakli said, adding that it was a record year for both capture fisheries and aquaculture.

He said the ministry would continue close cooperation with the sector to maintain similar performance in 2026 and wished all stakeholders a safe and productive new year.

(Source: Anadolu Agenncy)

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or several years, Türkiye has prioritized technological development, particularly artificial intelligence (AI), in its national vision. This trajectory began with the National Technological Move (Milli Teknoloji Hamlesi) framework, continued with the National AI Strategy, and has since expanded to include the integration of AI across multiple sectors, such as defense, health, education, agriculture, and public administration. Each year, Türkiye’s policies in this area have become more proactive, structured, and strategically coordinated. One of the clearest reflections of this evolution is evident in the recently released 2026 Presidential Annual Program.

These programs are important policy instruments because they outline Türkiye’s priorities, targets, and strategic direction for the coming year. Therefore, examining the 2026 Program offers valuable insight into how Türkiye envisions the role of AI within its broader technological and geopolitical landscape.

From this perspective, the 2026 Presidential Annual Program represents a pivotal moment in national technology policy. While previous editions acknowledged technological transformation, most notably the 2025 Program, the 2026 document elevates AI to a central position in state strategy. AI is no longer presented as a tool for modernization, but rather as infrastructure for national power, closely linked to economic sovereignty, military capability, and institutional reform.

This shift is especially noteworthy because the 2026 Program treats AI as a strategic, regulated, cross-government capability. To understand the significance of this change, it is important to examine how AI is integrated into the program’s broader governance philosophy.

How AI appears across the 2026 program

The 2026 Presidential Annual Program differs from its predecessors in that it integrates artificial intelligence into state planning to a much greater degree. Unlike earlier programs, which featured AI sporadically or only within specific technological chapters, the 2026 document presents AI as a central component in nearly every major policy area. AI is present not only in defense, but also in tax administration, customs risk management, hospital decision-making, public health monitoring, drug supply chains, agricultural analytics, environmental assessment, citizen-state communication platforms, and public-sector training. In each case, AI is presented as a means to improve accuracy, eliminate inefficiencies, combat informality, and strengthen the state’s administrative capabilities.

Furthermore, the 2026 Program stands out not only because AI is spread across multiple domains, but also because a coherent regulatory and ethical framework has emerged to govern its use. For the first time, the Annual Program outlines a structured approach to establishing ethical and legal principles for AI applications in the public sector. The Program introduces a formal system for assessing AI-related risks within government institutions and proposes creating an AI management system through which public-sector AI tools will be certified, standardized, and monitored. This is a significant change from the 2025 Program, which only anticipated secondary regulations and basic risk awareness measures, but did not present a comprehensive governance structure.

The administrative implications are significant. Rather than treating AI as an experimental add-on or a future possibility, the 2026 Program integrates it into the daily routines of governance. Rather, it integrates AI into the daily routines of governance. Continuous digital assistance for taxpayers, machine learning–supported customs controls, and automated risk assessments in social security and fiscal policy demonstrate that AI has transitioned from the fringes of state operations to its core. It can now be argued that AI is not just being applied through isolated pilot projects, but is being institutionalized as a standard instrument of public service delivery.

These developments collectively represent a shift in the state’s understanding of AI. Türkiye is transitioning from an adoption model, in which AI is incorporated into specific projects, to a governance model, in which AI becomes subject to regulation, oversight, and ethical responsibility. The 2026 Program acknowledges that AI is not just a technology to be deployed, but rather, it is a field that necessitates its own institutional framework. This evolution signals the beginning of a more mature phase in Türkiye’s approach to AI.

The Defense sector: AI as a strategic capability

Although AI has spread across many civilian sectors, its most consequential strategic impact emerges in the defense domain. Türkiye’s defense industry has grown rapidly over the past two decades, reaching record export levels and surpassing an 80 percent indigenous production rate by 2023. However, the 2026 Presidential Annual Program marks a turning point because it is the first time that AI has been explicitly classified as a breakthrough technology at the core of defense modernization.

AI enters Türkiye’s defense ecosystem in several critical ways. Most notably, it is the foundation of at least nine ongoing research and development (R&D) projects led by the Defense Industries Presidency (SSB). These initiatives include autonomous platforms, drone swarm coordination — widely regarded as the future of aerial warfare — advanced ISR systems, and cognitive electronic warfare technologies. Their inclusion reflects Türkiye’s growing recognition of how rapidly the nature of conflict is evolving.

For example, swarm drones can saturate and confuse enemy defenses, operate autonomously in tightly coordinated formations, and adapt to battlefield conditions in real time, giving militaries a significant operational advantage. Therefore, the fact that such technologies are embedded in a national strategy is far from symbolic. It signals a deliberate effort to prepare for a battlefield where success is defined by speed, autonomy, and information dominance.

In this context, AI is treated not as an auxiliary upgrade, but as a horizontal enabler that cuts across platforms, subsystems, and domains. AI functions as a sensor, an autonomy layer, and a decision-support engine simultaneously, making it integral to the architecture of next-generation military systems and to Türkiye’s broader vision for technologically sovereign defense capabilities.

Reliance on foreign datasets

AI’s expanding role also aligns with Türkiye’s strategic goal of reducing external technological dependence. These developments unfold within the framework of the National Technology Initiative, which aims to increase the share of indigenous production to 83 percent by 2026.

However, AI-enabled defense systems that rely on foreign datasets, imported model architectures, or externally controlled cloud environments introduce deep structural vulnerabilities. For this reason, the 2026 Program emphasizes the importance of local AI models, sovereign computational capacity, and secure data infrastructures. The emphasis is on more than just adopting AI; it must strengthen national autonomy rather than create new dependencies.

The Program’s strengthened focus on dual-use technological development is equally significant. Artificial intelligence (AI), often described as a force multiplier, gains strategic value precisely because it operates across civilian and military domains. Leading technological powers, particularly the United States and China, place dual-use AI at the center of their innovation strategies.

They recognize that breakthroughs in one sphere rapidly accelerate advancements in the other. Türkiye’s 2026 program decisively moves in this direction. While the 2025 Program referenced the potential for transferring military-developed capabilities to civilian industries and highlighted the role of technology mapping platforms, such as YETEN, the 2026 Program takes it a step further by proposing the creation of a formal dual-use roadmap.

This roadmap aims to institutionalize two-way technological circulation. Military AI innovations, such as autonomous coordination algorithms, advanced computer vision, and real-time analytics, can be adapted for civilian applications in precision agriculture, energy optimization, autonomous logistics, and smart manufacturing. Conversely, advances in civilian AI markets, such as natural language processing, image recognition, and predictive modeling, can be adapted for defense purposes more quickly and efficiently. This bidirectional flow reinforces both ecosystems, accelerates innovation cycles, and reduces costs.

In this sense, the 2026 Program’s approach to defense artificial intelligence (AI) reflects a broader shift in Türkiye’s technological strategy. Rather than treating AI merely as a set of tools to be integrated into existing systems, the program recognizes it as a foundational capability that reshapes industrial planning, defense doctrine, and national power dynamics. The consolidation of AI, indigenous production, and dual-use innovation indicates a transition to a more mature and strategically coherent model of technological statecraft.

What does the program signal?

The 2026 Presidential Annual Program represents a significant shift in Türkiye’s approach to artificial intelligence. Its significance lies in its detailed policy measures and what they reveal about the state’s evolving strategic vision. AI is no longer viewed as merely a tool for modernization; rather, it is considered essential infrastructure for national power, central to administrative performance, economic sovereignty, and military capability.

Overall, the program signals the emergence of a new strategic era. AI is no longer situated at the periphery of government planning, but rather, it is placed firmly at its center. The document reflects the clear recognition that a state’s ability to develop, govern, and effectively deploy AI-enabled systems will be crucial for future geopolitical influence. Instead of reactive adoption, Türkiye now anticipates proactively. The program operates as both a forward-looking roadmap and a strategic declaration. Türkiye intends to do more than simply adjust to the AI-driven transformation of global politics and future warfare; it intends to play an active role in shaping it.

(Originally published in Turkish by Kriter)

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ürkiye’s first uncrewed fighter jet, Bayraktar KIZILELMA, achieved a historic milestone by becoming the world’s first UAV to successfully fire a beyond-visual-range air-to-air missile at a jet-powered target aircraft, defense company Baykar announced Sunday.

The landmark test, carried out over the Black Sea off the coast of Sinop, marked a major step for Türkiye’s growing national defense capabilities.

In a statement, Baykar said KIZILELMA launched the domestically developed GOKDOGAN air-to-air missile, striking the high-speed aerial target with “pinpoint accuracy.”

National radar guides KIZILELMA strike

KIZILELMA detected and tracked the target using the MURAD AESA radar, an advanced sensor system developed by Turkish defense firm ASELSAN. Officials noted that the engagement represents the first time in Turkish aviation that a national aircraft fired a domestically produced air-to-air missile guided by a national radar system.

“With this successful test, KIZILELMA became the first and only uncrewed platform in the world with verified air-to-air combat capability,” Baykar said.

During the test, five F-16 fighter jets from Merzifon Air Base conducted formation flights with KIZILELMA in a coordinated crewed–uncrewed operation. The mission also featured the Bayraktar AKINCI UAV, which documented the test from the air.

The flight marked a significant demonstration of future air combat concepts involving the integration of uncrewed aircraft with manned fighter fleets.

Advanced systems strengthen Türkiye’s air power

KIZILELMA is equipped with a low radar cross-section design, advanced sensors, and an array of domestically produced munitions. Its integration with the MURAD AESA radar and TOYGUN targeting system enables long-range detection and precision engagement.

In earlier tests, KIZILELMA successfully deployed TOLUN and TEBER-82 munitions, showing high accuracy in air-to-ground missions. The recent air-to-air strike demonstrates its operational readiness for multiple mission profiles.

Baykar, which has self-funded all its UAV projects since 2003, continues to be a leading exporter in the Turkish defense industry.

The company recorded $1.8 billion in export revenue in both 2023 and 2024, with exports making up 90% of its total sales.

Baykar has signed export agreements for its Bayraktar TB2 UAV with 36 countries, while its high-altitude long-endurance AKINCI platform has been exported to 16 countries.

Official data shows Baykar has been the top defense and aerospace exporter in Türkiye for the last four consecutive years.

Milestone for Türkiye’s defense technology

The successful test is considered a major milestone in Türkiye’s efforts to advance its national uncrewed fighter capabilities and strengthen its role in next-generation air warfare.

Officials said the achievement will contribute to Türkiye’s long-term strategy of developing autonomous air combat platforms with both air-to-ground and air-to-air mission capabilities.

(Source: Anadolu Agency)

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n October 16, 2025, Türkiye reached a historic milestone in its digital transformation. The $3.5 billion 5G spectrum auction marked the country’s formal entry into the next generation of connectivity. Turkcell, Türk Telekom, and Vodafone competed for 11 frequency packages, securing the critical 700 MHz and 3.5 GHz bands, which will influence the country’s communication landscape for decades.

According to the terms of the auction, the operators must begin providing commercial services by April 1, 2026; maintain domestic and national component ratios of 60 and 30 percent, respectively; and pay five percent of their annual revenues to the Information and Communication Technologies Authority (BTK) through 2042.

What may appear to be a technical upgrade is, in fact, a strategic shift. 5G is not just about faster downloads; it is the foundation of a new geopolitical order in which digital infrastructure defines power as much as territory once did.

5G and the new geopolitics of connectivity

Although 5G is often described in terms of speed, its true significance lies in its role as the twenty-first century’s technological infrastructure — a system that enables critical services to function in real time, including logistics, industrial automation, secure communications, and emergency response. Due to its dual civilian and military relevance, 5G has become a central arena of geopolitical competition. This competition is most evident among the United States, China, and the European Union, all of which are seeking to influence the technological standards and supply chains that will govern the next phase of global digitalization.

China’s rise in telecommunications has been deliberate and strategic. Its government recognized early on that securing dominance in communication infrastructure would translate into influence over the global economy and intelligence landscape. Through long-term industrial policy, subsidized financing, and protection of domestic markets, Beijing has empowered its firms to grow quickly, offering 5G equipment at prices that few competitors can match. This model has positioned Chinese vendors as more than just market actors; they are now seen as instruments of state power capable of exporting technology and digital governance norms.

In stark contrast, the United States—builder of the internet and pioneer of 3G and 4G—assumed its leadership was unshakable. Major American firms gradually exited the telecommunications equipment market, leaving the West dependent on just two major European vendors: Ericsson and Nokia. When Washington finally recognized that the backbone of global connectivity was being built primarily with Chinese infrastructure, the U.S. government shifted toward a national security framing. The concern was not only that foreign equipment could enable espionage, but also that the data transported over these networks — a vital input for artificial intelligence — could bolster the military and strategic capabilities of a peer competitor.

The Clean Network Initiative

This concern has been amplified by the intersection of 5G with emerging technologies. Networks handling information from millions of cameras, sensors, and industrial systems could provide unmatched situational awareness to the controlling state. Consequently, the United States has promoted initiatives like the Clean Network to prevent high-risk vendors from accessing allied networks. In contrast, Europe has adopted a risk-mitigation approach through the 5G Cybersecurity Toolbox. Meanwhile, the development of Open RAN architectures aims to diversify the ecosystem by ensuring that network components are interoperable and reducing the dominance of any single actor.

For Türkiye, this landscape presents valuable opportunities and challenges. As a NATO member with strong ties to Europe, a rapidly expanding domestic tech sector, and significant engagement with Asian markets, Türkiye is uniquely positioned among the major players. Instead of becoming dependent on one supplier bloc or exclusive partnership model, its aim should be to leverage relationships across multiple sectors while cultivating its own indigenous technological ecosystem. By anchoring 5G development in domestic capabilities, Türkiye can benefit from global innovation while maintaining resilient, flexible, and secure critical infrastructure.

In this context, Türkiye’s 5G strategy is inseparable from its long-term ambitions: strengthening national sovereignty, enhancing competitiveness, and securing a place among the architects — not merely users — of the future digital order.

Türkiye’s 5G moment

Türkiye’s approach to 5G is guided by a clear strategic ambition: to become a country that designs and exports the technologies of the future rather than merely adopting what others build. The government’s “Uçtan Uca Yerli ve Milli 5G” initiative — a collaborative effort involving TÜBİTAK, leading technology firms, and all major mobile operators — reflects this goal. The initiative aims to provide faster connectivity to end users and ensure that the backbone of Türkiye’s digital infrastructure is rooted in domestic capabilities, including network software, base stations, cybersecurity mechanisms, and data processing technologies.

Transport and Infrastructure Minister Abdulkadir Uraloğlu has repeatedly emphasized that 5G marks a strategic turning point for Türkiye because it has the potential to transform far more than just communication services. With its promise of real-time data processing, ultra-low latency, and massive machine-to-machine communication, 5G will transform how societies produce goods and services, provide healthcare, move people and goods, and respond to crises. Uraloğlu emphasizes that this technology will enable automation, artificial intelligence–driven systems, and intelligent infrastructure — the building blocks of an advanced industrial economy.

This transformation is already visible. Türkiye has begun deploying 5G systems at Istanbul Airport, in large sports venues, and even at the Grand National Assembly. This demonstrates that the implementation of 5G is not a distant aspiration, but rather an active restructuring of national infrastructure. As deployment expands, the impact will be felt across every major sector of the Turkish economy. Production lines will evolve into autonomous factories where smart machines can communicate and adapt instantly, strengthening Turkish industry’s position in global supply chains. Transportation networks will become safer and more efficient as vehicles communicate with each other and the roads on which they travel.

Healthcare services will transcend geographic limitations, making remote surgery and patient monitoring standard practice — a vital capability for an earthquake-prone nation. Agriculture and energy systems will also undergo a digital shift, with interconnected sensors optimizing resource use and supporting sustainable growth. The creative economy, education, and digital culture will also benefit as high-bandwidth, immersive technologies become widely accessible.

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t this historic crossroads, as the global power equation is rewritten and paradigms are shaken, the parameters of national sovereignty are undergoing a fundamental transformation. Full independence is now measured by control over not only land, sea, and airspace but also the digital (cyber) and space domains, which connect these elements via invisible networks. At the heart of this equation is one of the most critical technologies: national positioning systems. Turkey’s decision to develop its own national positioning system is a strategic response to 21st-century challenges and a concrete manifestation of the “Turkey Century” vision.

A country’s economic functioning and military operational capabilities depend on invisible signals, namely Global Navigation Satellite Systems (GNSS). Turkey, a long-time user, is now taking decisive steps toward becoming a system builder. Developing a national navigation and global positioning system is not just a technological ambition, but a strategic necessity that has become one of the cornerstones of the country’s future sovereignty, security, and prosperity.

Alongside Turkey’s space program, the Regional Positioning and Timing System (RPS) will be established as a vital capability. Thus, Turkey’s positioning, navigation, and timing data needs will be met with high-precision, domestically produced systems that will replace those currently in use.

Warning from the field: Breaking the dependency spiral

There is experience from various war environments regarding jamming and interference activities targeting Global Positioning System (GPS) systems. The precision guidance capabilities of today’s modern armies’ striking elements are priority jamming targets. In this context, reports have emerged of Russian GPS jamming (electronic warfare) applications against HIMARS and various smart munitions provided to Ukraine in the Russia–Ukraine War. Even advanced systems equipped with receivers that obtain data from different positioning systems and anti-jamming subcomponents are not immune to jamming or deception under current conditions.

Although GPS is an important data source, sophisticated munitions do not rely solely on a single GNSS source or GNSS-based guidance technologies. Ballistic and cruise missiles can currently operate without being affected by jamming with inertial navigation systems; however, the increase in flight time causes deviation errors to grow proportionally over time. For this reason, hybrid structures that support data such as GPS are needed.

Counterterrorism operations in Syria and Iraq, as well as in areas of national interest such as Libya and Azerbaijan, have confirmed the Turkish defense industry’s game-changing role in technologies such as unmanned aerial vehicles (UAVs) and missiles. However, there is a bitter truth on the other side of the coin: the risk of strategic blindness. Our long-range ballistic and cruise missiles depend on foreign-sourced GPS signals, particularly those controlled by the U.S., for position and target data. Rival powers can compromise the effectiveness of our most advanced weapon systems by jamming or misleading these signals through intensive electronic warfare applications, even momentarily.

This situation represents an unacceptable strategic vulnerability that undermines Turkey’s ability to determine its own destiny. Rival forces’ ability to jam or mislead these signals through electronic warfare measures means the effectiveness of your most advanced weapon systems could be compromised at the most critical moment. This situation is an unacceptable strategic vulnerability that conflicts with Turkey’s determination to chart its own course. A national system would eliminate this vulnerability by providing a military signal similar to a P/M code that is resistant to such interference, fully encrypted, and accessible only to the Turkish Armed Forces.

Examples from around the world: Regional positioning systems

Today, many GNSS satellites are in operation. Each satellite has its own unique frequencies for transmitting navigation and timing information and typically operates in low and medium orbits. The global positioning (GPS) data they provide is intended for different users. GPS services include the C/A code, accessible to all users, and the encrypted P(Y) code, accessible only to authorized users. The system operates with three components: space (satellites), ground (ground control stations), and user (GNSS or GPS receivers). Receivers determine position using signal data from both space and ground components.

Regional positioning systems result from the need to provide positioning data for specific areas or purposes using indigenous resources. Japan’s Quasi-Zenith Satellite System (QZSS) enhances GNSS signal performance in Japan and neighboring East Asian regions by employing a mix of satellites in various orbits (GEO and MEO) to augment GPS. The QZSS program was announced with four operational satellites and currently operates with seven.

India launched the NavIC program to end its dependence on foreign GPS data amid tensions with Pakistan. Designed to cover mainland India and the surrounding region within a 1,500-kilometer radius, the NavIC system uses geostationary (GEO) satellites. Furthermore, satellite-based augmentation systems (SBAS) have long been used in North America (“WAAS”) and Europe as a method of providing positioning services for critical applications, such as civil aviation.

Turkey’s National Technology Initiative: Actors and roadmap

Recognizing the importance of independence in strategic capabilities is the driving force behind Turkey’s national technology initiative. The leading institutions of the defense industry are transforming this vision into reality. TÜBİTAK UZAY’s satellite technology expertise, ASELSAN’s electronic warfare, signal processing, and cryptology expertise, ROKETSAN’s launch and fuel technology competence, and FERGANİ’s satellite target team form the pillars of this major project. Rather than a series of disjointed efforts, Turkey’s goal is a complementary, holistic strategy coordinated by the Turkish Space Agency.

This goal will not be achieved overnight, but rather through systematic accumulation over many years. In the first stage, rather than bearing the enormous cost and time burden of establishing a global system, the goal is to establish a regional positioning system (RPS) that covers Turkey and its sphere of influence, including the Balkans, the Caucasus, the eastern Mediterranean, and the Middle East. This system will provide a more precise, secure, and uninterrupted service in a specific geographical area using fewer satellites than existing global systems. Successful implementation of the first phase will provide Turkey with invaluable technological expertise and lay a solid foundation for the TR-KKS, which aims for full global coverage in the long term.

The first and most realistic goal is to establish a regional satellite navigation system covering Turkey and its immediate surroundings, such as the Blue Homeland, the Balkans, the Caucasus, and the Middle East. This system would be similar to India’s NavIC or Japan’s QZSS. Like other systems, this one will consist of three to seven satellites operating in different orbits (GEO and MEO) and will provide a much stronger and more accurate signal in the region than existing global systems. Implementation of this phase is expected to begin in the early 2030s with the launch of the first satellites.

The long-term objective is Global Coverage (TR-KKS). Upon building on the success of the regional system and the technological expertise gained, the long-term goal is to transition to a full global constellation of 24–30 satellites placed in low- and medium-Earth orbits (LEO and MEO). This would elevate Turkey to the same level as systems such as GPS (US), GLONASS (Russia), Galileo (EU), and Beidou (China). This phase could be realized by the 2040s.

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he 1970s and 80s saw regular armies in Latin America, Asia and later Africa, including Turkey, facing serious problems in their fight against terrorist groups, guerrillas and paramilitary groups. The appetite of Western countries such as the United Kingdom, France, and Germany, and most intensely the United States, to intervene in regimes in many countries around the world, along with the financing of the U.S.’s shadowy paramilitary companies and military-industrial complex through hundreds of operations conducted by the Pentagon and the CIA, led to an unprecedented expansion in the volume of arms and ammunition imports by developing countries, both Atlantic and non-Atlantic.

In the post-World War II era, when NATO was established, global military spending stood at around 500 billion dollars in today’s figures. As the Cold War escalated and tensions between the Western and Eastern blocs deepened, military spending first rose to 1.5 trillion dollars and then to 1.8 trillion dollars just before the end of the Cold War. Of this expenditure, $750 billion was by the United States, $1 trillion by NATO, $600 billion by the Soviet Union, and the remaining $200 billion by countries not belonging to any military pact. After the Cold War, in the early 2000s, global military spending fell to $1.2 trillion, with $750 billion spent by NATO, approximately $100-150 billion by Russia and China, and $250-300 billion by the remaining countries.

Global military expenditure at record levels: $2.8 trillion

Today, particularly since the outbreak of the Russia-Ukraine War in 2022, we are talking about global military expenditure that has surpassed $2.8 trillion on an annual basis as of the first half of 2025, up from $2.2 trillion. In the defence sector, the 15 leading countries, including Turkey, in terms of military power and capability; are caught between coordinating, transitioning, and adapting to conventional army structures, conventional weapons, ammunition, and platforms; new-generation irregular warfare techniques; new-generation warfare technologies and strategies; and artificial intelligence-focused new-generation weapons, ammunition, and platforms. They are struggling to train sufficient high-quality personnel and manage costs effectively. The United States’ defence spending, which has reached $1 trillion, is now straining the federal budget.

Therefore, after taking office for a second term, President Trump made it clear that it is not possible for the United States to bear the entire burden of the Atlantic Alliance and NATO’s defence and warfare capabilities. He warned that if NATO member EU countries do not increase their military investment and spending by at least 2.5-3 times by 2028, the United States may withdraw from NATO to some extent. Therefore, despite objections from some EU countries, at the recent NATO summit, all countries pledged to comply with the U.S. call for spending and investment. Russia’s drone and fighter jet violations in September, first in Poland, then in Estonia, and subsequently in some Scandinavian countries’ airspace, have prompted NATO to take action.

Consequently, strategic efforts to design a more comprehensive air defence system under NATO and to deepen NATO’s capabilities will be accelerated. For this reason, many NATO countries have also accelerated mutual cooperation with Turkey in the areas of defence, security and new generation warfare technologies.

Rewriting the global defence architecture in the age of drones

Especially in the last five years, the concept of warfare has changed radically. With drones, land, sea and submarine platforms are no longer just reconnaissance or surveillance tools, but have become strategic elements with direct attack capabilities. The Russia-Ukraine War has proven on the ground how low-cost but deadly unmanned systems can upset the balance on the front lines. Ukraine’s FPV drones and the naval drones it uses in the Black Sea have shaken the traditional understanding of naval and air superiority.

The 2020 Azerbaijan–Armenia Karabakh War demonstrated that UAVs could alter the course of ground warfare without the need for air superiority, opening the door to a new doctrine. This change in warfare techniques on the battlefield heralds an era described internationally as ‘lethal transparency.’ New-generation electronic warfare systems, artificial intelligence-supported swarm algorithms, and layered air defence networks have now become integral components of the new generation battlefield.

This rapid evolution is also forcing NATO to take radical steps. At the recent summit in The Hague, alliance members agreed on a target of defence spending reaching 5% of their GDP. This ratio represents a radical departure from the long-neglected 2% spending threshold in many European countries. Russia’s increasingly frequent violations of NATO countries’ airspace in the Baltic and North Seas are raising the need for ‘active defence’ beyond deterrence. Faced with this situation, Trump first sent a loud message to European capitals to ‘fulfil your commitments’. Trump stated that Russian aircraft and drones should be shot down immediately if they violate airspace but left the details of U.S. support on this issue up in the air.

Turkey’s historic defense leap forward in the last decade

NATO’s new concept centers on drone technologies and electronic warfare capabilities, focusing on a vision of a multi-layered ‘defence dome’ that effectively covers the skies and seas. Thus, the alliance aims to establish a security architecture that integrates not only land and air forces, but also space and cyberspace. In this historic transformation process that NATO must rapidly implement, Turkey has become a power centre not only regionally but also globally. Ten years ago, Turkey accelerated revolutionary steps to produce its own UAVs and SİHA (unmanned aerial vehicles) with local and national capabilities, and in just five years, it has become the world’s most ambitious drone manufacturer and exporter.

Baykar’s TB2 and Akıncı models have successfully served in Syria, Libya and Karabakh, and have become symbols against the Russian army in Ukraine. The TB3’s ability to take off and land from the TCG Anadolu has propelled Turkey into the drone carrier concept and placed it at the forefront of sea-air integration. Unmanned combat aircraft projects such as Kızılelma and ANKA-3 also enable manned and unmanned air assets to converge under the same doctrine.

In addition, the process of building short, medium and long-range air defense layers with domestic capabilities under the HİSAR and SİPER programs and the Steel Dome project is being followed with admiration by many of Turkey’s allies and is also facilitating the signing of successive long-term defense technology and security cooperation agreements between Turkey and these allies. The GÖKDENİZ close-range air defence system, TF-2000 air defense frigates and the naval drones under development also reinforce the ‘system of systems’ vision in terms of Turkey’s new generation warfare doctrine and strategy.

Our defence industry exports, which reached $1.8 billion in 2024 and are already projected to exceed $2.5 billion in 2025, demonstrate in figures how this historic leap is transforming into high added value for the Turkish economy on a global scale. Turkey’s goal is to gradually increase its defence industry exports from $11 billion to $15 billion in the 2028-2030 period.

In a context where the emerging E7 economies are accelerating strategic cooperation and wide-ranging joint project steps to deepen their economic, commercial, political and military cooperation with Turkey without exception, the President’s fair, strong and determined stance, which reinforces the perception of a ‘Strong Turkey’, is causing the messages he has delivered and will deliver at all international meetings to be followed with great interest by the international public.

Therefore, under the visionary leadership of the Turkish President, the giant strides taken over the past 20 years in the fields of defense, security, energy and digital technologies, along with our capabilities and capacities that have elevated the Turkish Armed Forces to among the world’s strongest armies, enable a strong Turkey to stand up for its own geography and the oppressed, to hold those responsible to account, and to manage a strong diplomatic process both on the ground and at the negotiating table. Under President Erdoğan’s strong, determined and visionary leadership, Turkey has assumed the role of a ‘game changer’ that is reshaping the destiny of Eurasia. A strong Turkey also forms the essence of the Vision for the Turkish Century.

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he world is facing a deeper climate crisis than ever before. Temperature records, severe droughts, and extreme weather conditions are now topics of discussion among economists, engineers, health professionals, and security experts. For some time, the United Nations has been seeking solutions to this global threat through climate diplomacy. In 2015, the Paris Climate Agreement was signed, representing the most concrete and comprehensive step in these efforts, with the goal of keeping global temperature increases within the 1.5–2°C range. The agreement envisions a collaborative effort based on the principle of common but differentiated responsibilities, considering countries’ historical emissions and levels of development.

In recent times, Turkey has become one of the countries more actively involved in this global struggle. By ratifying the Paris Agreement on October 6, 2021, and formally joining the process, Turkey has ushered in a new era of climate action. With the Climate Law adopted last July, Turkey’s vision for combating climate change is set out for the first time within a national legal framework. The large-scale forest fires that Turkey experienced this summer have highlighted the tangible effects of the climate crisis and underscored the vital importance of the Climate Law. Following the forest fires of this summer, the law provides a historic opportunity to swiftly implement technological firefighting investments, artificial intelligence–supported early warning systems, and ecosystem restoration.

This article will examine the law within the context of the Paris Agreement and international climate policies. Our goal is to explain the meaning and opportunities of this legal regulation without getting bogged down in technical details.

A powerful opportunity?

Throughout history, our ancient civilization has regarded the land as a trust, water as a blessing, and trees as a source of shade and sustenance. Islam’s commandment to not waste food or water has been brought to life through the Seljuk waqf waterways, Ottoman birdhouses, village fountains, and orchards. Living in harmony with nature has been accepted as a way of life and a moral responsibility. This understanding has taught us that it is our sacred duty to not upset the climate’s balance, to regard the earth and sky as a trust, and to leave a clean earth for future generations. Turkey’s criteria for joining the Paris Agreement also reflect this ancient approach, and today’s modern climate policies are rooted in this understanding.

Today, fires, droughts, and floods triggered by the climate crisis are testing business ethics and market order. The production approach that encourages unlimited consumption habits and recklessly exploits natural resources for short-term profit also jeopardizes economic stability. These misguided choices cause price increases and disrupt the balance of nature. Thus, the climate issue has become an indicator of the deep connection between ethics and economics, and is no longer merely an environmental problem.

On October 6, 2021, Turkey officially joined the global climate agreement by ratifying the Paris Agreement in the Grand National Assembly of Turkey with Law No. 7335. During the ratification process, Turkey declared its intention to join the agreement as a “developing country,” thereby formalizing its long-standing position. While Turkey’s official status with the United Nations remains unchanged, this declaration clearly demonstrates its intention to benefit from the climate finance and technology transfer opportunities intended for developing countries.

No more talk, it’s time for action

Turkey has long prioritized addressing climate change. Although calls for action have grown louder in the wake of disasters, the issue has often fallen off the public agenda. Passed by the Turkish Grand National Assembly on July 2, 2025, and published in the Official Gazette on July 9, 2025, the Climate Law is a regulation that breaks this vicious cycle.

The Climate Law presents a vision that transcends environmental policy. It aims to protect natural resources, ensure that economic development is compatible with the principle of sustainability, and reduce disaster risks. By doing so, Turkey has established its national commitment to the global climate struggle within a concrete, applicable, and measurable framework.

What does the 2025 Climate Law bring?

It is a law that prioritizes the environment and people

This summer, Turkey experienced the severe effects of the climate crisis. In Izmir, for example, the capacity of the dams fell below five percent, prompting municipalities to implement mandatory nighttime water cuts. A total of 3,067 fires damaged forests and villages. Drought in Central Anatolia reduced wheat cultivation by half.

The concrete steps to be taken in this regard can be summarized as follows:

Forest areas burned in villages will be reforested quickly after the fires, and affected families will receive support to rebuild their livelihoods.

Early warning systems will be installed in high-risk fire areas, and a drone- and artificial intelligence-supported surveillance network will be deployed to combat fires.

Drip irrigation systems will be installed for farmers affected by drought, and drought-resistant seeds will be provided.

Rainwater harvesting and gray water recycling systems will be implemented in areas experiencing water shortages.

All state institutions are involved

A stronger Climate Change Presidency is at the forefront. However, the presidency will not act alone. All ministries and institutions must prepare annual plans and submit reports to fulfill their responsibilities in climate change mitigation and adaptation.

The concrete steps that will be implemented in this context can be summarized as follows:

• The Climate Change Presidency will coordinate the process.

The Ministry of Energy and Natural Resources will manage the transition away from coal and toward investments in renewable energy.

The Ministry of Agriculture and Forestry will carry out projects to combat drought and restore ecosystems after fires.

The Ministry of Transport and Infrastructure will implement low-carbon transportation projects.

The Ministry of Environment, Urbanization, and Climate Change will initiate projects to increase green spaces and building energy efficiency in cities.

• AFAD will implement early warning and rapid response systems for disasters such as floods and fires.

Every Sector Has a Role to Play

Each sector, including energy, industry, agriculture, and transportation, will play its part. These sectors will develop habits that promote the use of renewable energy, reduce waste, and encourage more efficient consumption.

The concrete steps to be taken in this regard can be summarized as follows:

In the construction sector, zero-energy building standards will be mandatory for new buildings, and thermal insulation and passive energy systems will be implemented.

In logistics, freight transport will shift to railways, and electric cranes and equipment will be introduced in ports.

In waste management, biogas plants that convert organic waste into energy will be established, and plastic recycling will increase with mandatory quotas.

In urban planning, construction will be restricted in areas at high risk of flooding, and rainwater harvesting and green roofs will be required.

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ollowing the July 15 coup attempt, Turkey accelerated its nationalization efforts and launched the KAAN development project, with TAI as the prime contractor, to replace the F-16 fighter jets currently in its air force. The 5th-generation manned fighter jet project, which will be the most advanced stage of the Turkish Military Aviation Industry, will not only be a milestone in aircraft production but also a key milestone in Turkey’s strategic independence. The KAAN project, which will strengthen Turkey’s regional and international standing, will also enable the Turkish Air Force to operate with domestically produced weapons and mission systems.

Turkey’s national fighter jet, KAAN, ushering in a new generation of the Turkish defense industry, broke the record for the largest single export in Turkish defense history, reaching a contract value of $15 billion just one year after its first contact with the sky. Under the defense agreement signed between Turkey and Indonesia at the INDO Defense 2025 Fair in Jakarta, 48 5th-generation KAAN fighter jets will be produced and exported to Indonesia within 120 months.

The KAAN fighter jets to be produced under the agreement will also utilize engines developed domestically and nationally by Turkey. Additionally, technologies transferred from Indonesia will be incorporated into the 48 KAANs.

The ability to produce 5th-generation fighter jets

Following the U.S., Russia, China, and South Korea, Turkey has joined a limited number of countries capable of producing 5th-generation fighter jets with the KAAN. The National Combat Aircraft KAAN, a quintessence of Turkish defense engineering and one of the most crucial production capabilities for Turkey’s strategic goal of independence, is poised to shift the balance not only in our homeland but also on the global aviation scene. Following the agreement with Indonesia, Turkish Aerospace Industries (TAI) General Manager Mehmet Demiroğlu announced that they are in contact with several other countries regarding the KAAN.

Indonesia is negotiating with several countries to procure fighter jets to strengthen its air force. In this context, 42 aircraft have been ordered from France, with initial deliveries scheduled to begin in 2026. An agreement has been reached with the US for 24 F-15EX fighter jets, but the final contract has not yet been signed. Indonesia is also evaluating an offer from China for 42 second-hand J-10Cs, particularly in light of the Pakistani Air Force’s operational experience.

Meanwhile, the agreement reached with Russia for 11 SU-35 fighter jets has been suspended due to US CAATSA sanctions. Finally, in addition to the KAAN agreement signed with Turkey at the INDO Defense 2025 Fair, the Indonesian government resolved issues with the KF-21 fighter jet program with South Korea. The government has also decided to restructure its financial contribution to the project, reducing it from approximately $1.168 billion to $438 million. Under the agreement, 48 KF-21 aircraft will be delivered to the Indonesian Air Force.

Domestic Aviation Adventure, From Vecihi Hürkuş to Nuri Demirağ

The Ottoman Empire was one of the first states to establish military aviation. Starting in 1909, several initiatives were undertaken in the field of air warfare, and exploration was carried out to establish aircraft factories in Kayseri and Sivas. Furthermore, the world’s first use of fighter aircraft in combat was by the Italians against the Ottoman Empire during the Tripoli War, and the first fighter aircraft used in combat was shot down by Turkish soldiers 113 years ago.

Following this dream inherited from the Ottomans in the early years of the Republic, Turkish pilot Vecihi Hürkuş designed and built the first Turkish aircraft, the “Vecihi K-VI,” in 1924, using aircraft parts left over from the Greeks after the war. However, the flight of the Vecihi K-VI was delayed, and after a member of the committee responsible for permitting the flight said, “Vecihi, we can’t give you this license. If you trust your plane, jump in, fly, and save us too,” HÜRKUŞ made his maiden flight with the Vecihi K-VI on January 28, 1925. However, Vecihi’s flight was penalized for being unauthorized.

The “Turkish Aircraft Society” was founded in 1925, and Vecihi Hürkuş was declared “Turkey’s Chief Aircraft Pilot” and entered the society as a pilot. That same year, the Turkish Aircraft and Engine Corporation (TOMTAŞ) was established in partnership with Junkers, a pioneer in German aviation. A year later, the Kayseri Aircraft Factory was commissioned, and maintenance and repair activities for two types of aircraft were carried out at the factory. However, shortly thereafter, due to various pressures and political reasons, TOMTAŞ was closed, and the factory was transferred to the Ministry of National Defense.

Nuri Demirağ

Meanwhile, Nuri Demirağ, one of the wealthiest businessmen of the early Republic, spent a significant portion of his fortune establishing a national aircraft factory. As part of this effort, Demirağ established an aircraft factory in Beşiktaş in 1936. The factory produced the Nu.D-36 model training aircraft that same year. The Turkish Aeronautical Association (TAA) requested the training aircraft produced by Demirağ, and a certain number of aircraft were ordered.

In 1938, the aircraft produced were ordered to undergo final testing before delivery and brought to Eskişehir. The aircraft, piloted by engineer pilot Selahattin Reşit Alan, who had also drawn the plans for various aircraft, including the Nu.D-36 trainer aircraft, crashed into a ditch dug to prevent animals from entering the runway during landing. Tragically, Selahattin Reşit Alan, one of Turkey’s first aircraft engineers, lost his life in the accident.

Following this tragic loss, the Turkish Aeronautical Association canceled its orders for the Nu.D-36 model training aircraft, claiming they were unfit for flight and did not meet the desired requirements. Demirağ took the Turkish Aeronautical Association’s order cancellation to court, but despite expert reports stating that the aircraft were airworthy and had not suffered any accidents, the court ruled in favor of the Turkish Aeronautical Association.

Following this process, Nuri Demirağ continued his aviation studies with renewed vigor and began work on the Nu.D-38 aircraft, using domestic and national resources except for the engines. Designed for civilian passenger transport, the aircraft was also designed to be convertible into a bomber with various modifications applicable in the event of war.

By 1944, the Nu.D-38, which had completed its flight tests, had attracted interest from Spain in Europe, and from our neighbors, Iran and Iraq. However, the government of the time enacted a law preventing the export of aircraft manufactured in Turkey. Consequently, Demirağ, unable to secure domestic orders, closed his aircraft factory.

The Etimesgut Aircraft

Following Mustafa Kemal Atatürk’s instigation in 1937 to establish a national aircraft and engine industry, the Turkish Aeronautical Association Etimesgut Aircraft Factory began operations in 1941, the Turkish Aeronautical Association Gazi Aircraft Engine Factory in 1947, and the Ankara Wind Tunnel (ART) in 1950.

A total of 15 different types of aircraft were manufactured at the Turkish Aeronautical Association Etimesgut Aircraft Factory between 1941 and 1950, but one jet-powered aircraft remained in the project phase. It is said that the drawings for the THK-16 aircraft, which remained in the project phase, were smuggled to Germany.

In addition to aircraft manufacturing, the factory also carried out maintenance and modernization work on 63 aircraft for the Ministry of National Defense and 48 for the Turkish Aeronautical Association. The Etimesgut Aircraft Factory and the Gazi Aircraft Engine Factory, which were in their tenth year of operation and continuing their successful activities, were transferred to the MKE Institution by a law enacted in 1951.

The Gazi Aircraft Engine Factory was converted into a tractor factory in 1954, and the Ankara Wind Tunnel was abandoned until its reopening by TÜBİTAK in 1998. The Etimesgut Aircraft Factory now lies idle. The Etimesgut Aircraft Factory was destined to share the same fate as Nuri Demirağ’s aircraft factory.

On June 22, the U.S. struck three nuclear facilities in Iran with radar-stealthy B-2 bombers. Following the incident, numerous comments were made on social media about the design similarities between the THK-13 Aircraft Wing Glider, produced at the Etimesgut Aircraft Factory, and the B-2 Bomber. The THK-13 was manufactured in 1948 as a single-seat national flying wing glider, but the project was terminated following a flight test accident.

During the years when aircraft factories in Turkey were bankrupted and closed down, the US Northrop Corporation’s project to develop a powered bomber aircraft based on the YB-49 flying wing design, although it failed to reach mass production, utilized the design and engineering expertise gained from this project to create a war machine that began production in 1988 and is now capable of taking off from American soil, striking Iran, and returning.

(Originally published in Turkish by Kriter)

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planned update to the free trade agreement between the United Kingdom and Turkey is set to serve as a “great example” of modern, forward-looking trade partnerships, according to the UK’s Consul General in Istanbul and Trade Commissioner for Eastern Europe and Central Asia, Kenan Poleo.

Speaking in an exclusive interview with Anadolu, Poleo said the first round of negotiations concluded on a positive note, covering key areas such as trade in goods and sustainability. Future discussions, he noted, are expected to broaden the scope to include services, innovation, and digital sectors, reflecting a mutual ambition to modernize bilateral ties.

“The most exciting thing about this new free trade agreement is the opportunity for the UK and Turkey to set a great example for the whole world around what a modern free trade agreement between two important partners looks like,” said Poleo.

Negotiators are preparing for the next round of talks later this year, with both sides aiming to build a roadmap for deeper cooperation in technology, climate-related industries, and other future-oriented sectors.

With bilateral trade already exceeding £27 billion (approximately $36 billion) annually, Turkey has become one of the UK’s top 20 trading partners. That number is expected to grow, driven by shared economic goals and geopolitical developments that are encouraging both countries to diversify supply chains and expand global trade ties.

“Given the depth of our relationship, really, the sky’s the limit,” said Poleo, highlighting the growing synergy between the two economies.

A Relationship of Strategic Depth

Poleo described trade ties as “huge,” pointing to recent gains across multiple sectors including clean energy, advanced manufacturing, and mobility. The UK, in its post-Brexit trade strategy, sees Turkey as a gateway to wider regional markets. For Turkey, the UK represents not just a major consumer market but also a valuable partner in innovation and regulatory reform.

“There isn’t a sector where we don’t see positive opportunities,” he said.

The two countries are also finding alignment in high-tech and defense cooperation. A standout development came during the International Defense Industry Fair (IDEF) in Istanbul last month, where the UK and Turkey signed a memorandum of understanding paving the way for Turkey to acquire Eurofighter Typhoon aircraft.

Describing the deal as emblematic of a “strategic and defense partnership,” Poleo emphasized the economic as well as security benefits.

“A third of those aircraft are going to be built within the UK,” he said. “It provides huge opportunities for both countries in terms of defense and security, but also economic growth.”

The Eurofighter Typhoon, a multirole aircraft equipped with advanced radar and cutting-edge combat capabilities, is co-produced by the UK, Germany, Italy, and Spain. Turkey’s inclusion as an operator reflects deepening trust and interoperability with NATO partners.

Clean Energy and Nuclear Power Collaboration

Beyond defense, clean energy and next-generation nuclear power represent some of the most promising areas of UK-Turkey collaboration, according to Poleo. He spotlighted the UK’s Offshore Renewable Energy Catapult, a research institution in northern England, as a hub attracting Turkish firms interested in wind energy technologies.

“We’ve developed innovation capability and capacity that have allowed Turkish companies, who are looking to explore those opportunities globally and also in Turkey, to come and become part of that ecosystem,” Poleo said.

With Turkey aiming to install 5 gigawatts of offshore wind capacity by 2035, the UK’s expertise could accelerate progress. The British envoy sees the potential for Turkey to “leapfrog” into a leading position through targeted partnerships.

On nuclear energy, cooperation could involve regulatory development and capacity building, especially as Turkey moves forward with its first nuclear power plant in Akkuyu and pursues small modular reactor (SMR) technologies by 2050.

“There’s an opportunity for us to collaborate and learn from each other on our experiences,” Poleo added, referring to the UK’s decades-long leadership in nuclear infrastructure.

A Diplomatic Farewell to a Dream Posting

As Poleo prepares to conclude his assignment in early 2026, he reflects on a tenure marked by personal and professional milestones. Born in South London to a Turkish Cypriot family, he described his post in Turkey as a dream come true.

“This was always my dream job,” he said. “It is both a joy to have served here, but it’s also a tragedy for me that it has to come to an end.”

During his time in Istanbul, Poleo oversaw a steady expansion of bilateral trade, high-profile joint projects, and cultural diplomacy. Fluent in Turkish, he charmed local audiences with an emotional farewell speech, switching languages mid-sentence to remark with a smile:

He also spoke warmly of his daily view of Istanbul’s Golden Horn, calling it one of the “great joys” of diplomatic life.

Poleo first visited Istanbul as a student at the age of 21 and recalled standing outside the British Consulate building, dreaming of working there one day. Now, nearly three decades later, he is set to leave the city having fulfilled that vision.

(Source: Anadolu Agency)

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he security and defense agreement signed between Turkey and Somalia in February 2024, although not talked about enough in Turkey, made a major impact and generated discussion globally on the role of Turkey especially in the Horn of Africa. The impact and interaction of this 10-year agreement is likely to be felt in the region for many years. However, what does this agreement mean for Turkey and its overall Horn of Africa policy? How should we understand it in a broader perspective?

First of all, this agreement is part of the Turkish strategy in recent years whereby any crisis should be utilized to the maximum level for the benefit of Turkey’s national foreign policy. In the past, during the crisis of Qatar and the Gulf countries in 2017, Turkey acted quickly and decisively, increasing its military presence in the Gulf and opening a military/training base in Doha. After several years of criticism and complaints, it is now clear that Turkey has a firm military place in the Gulf.

What we see here is a similar case. When Ethiopia and Somaliland signed an agreement granting the former naval and commercial access to Somaliland’s coast, Somalia’s central government saw it as an existential threat. Not only did a security crisis occur, but many inside the Somali government interpreted this as a sovereignty crisis between Somalia and Ethiopia. Ankara quickly responded to the Somali request for help to the central government in Mogadishu. Ankara evaluated the crisis and signed an agreement to increase its military presence in Somalia.

This agreement is important in two aspects for Turkey. First, it will increase Turkey’s military in Somalia and possibly lead to the addition of a small airport for military planes in the military training center in Somalia, the lack of which came to the fore during the evacuations in Sudan. Second, it can clearly pave the way for Turkey’s presence in the open seas in the region and, therefore, its effectiveness in the developments in the Gulf of Aden.

The agreement is both a continuation of the deepening military relations between Turkey and Somalia in the last decade, and a reflection of the self-confidence that Somalia has gained over al-Shabaab, allowing it now to act more independently in regional politics. In addition, the agreement can be interpreted as the most effective playmaking move made by Somalia in the geopolitics of the region after 2010.

Effects and Reflections

The United Arab Emirates is likely the country most disturbed by the Turkey-Somalia security and defense agreement. The UAE has been conducting serious diplomacy for the last year to sign a very similar or even more advanced security agreement with Somalia. However, the response from Somalia has been reluctant—which is why there is both reaction and disappointment on the part of UAE about this development.

Ethiopia also was shocked and uncomfortable with the agreement, but, at the same time, attaches great importance to relations with Turkey. Ethiopia-Turkey relations experienced their golden period in 2020-2021 when Turkey helped Ethiopia in its fight with the Tigray region by supplying drones and other military equipment. It will be difficult to return to the same period again, however, multidimensional military-security relations between Turkey and Ethiopia are at a point of no return with mutual trust on this issue being well established.

For this reason, Ethiopia, which is experiencing serious economic difficulties, does not want problems with a country with which it works closely in the field of security. Nevertheless, one should expect that we will see the reflections of Ethiopia’s discomfort with the relevant agreement in its relations with Turkey in the coming period; however, the continuously deepening security-centered relationship is likely to balance this.

Turkey in the Horn of Africa

The most important question now is “What should Turkey do next in the Horn of Africa?” The geopolitics of the region will be reshaped as an atmosphere of insecurity has emerged: Somalia is dealing with al-Shabaab; Ethiopia is struggling with internal problems such as Tigray and Oromia; Somaliland is seeking independence; Kenya is preoccupied with domestic political issues; and the civil war in Sudan deepens and becomes a stalemate.

Turkey’s Horn of Africa policy in the 2010s was to strengthen the Sudan-Somalia line against the Ethiopia-Kenya line, and ensure the historical regional order. This approach manifested itself in Ankara’s activities that contributed to state-building efforts in Somalia and to socio-economic stability in Sudan. But in 2011, Sudan was divided into two, and a military coup and, most recently, the ongoing civil war destroyed the regional balance.

Despite this, Somalia has made progress in re-establishing order economically, politically, and militarily beyond expectations. The Somali diaspora has supported this process economically, and Somalia has presented itself as a new actor in the region. Turkey recently provided serious support to the Somali central government in the fight against al-Shabaab terrorism and made an sizable contribution to the strengthening of the country’s military.

Alongside its support to the Somalia-Sudan axis, Turkey has also established serious relations along the Kenya-Ethiopia axis. Political and military relations with Ethiopia, and commercial relations with Kenya came to the fore. This process has made Turkey one of the key countries in the region’s geopolitics.

The main axis of Turkey’s future policy in the region is likely to be based on further strengthening its presence there. Ankara may consider opening a consulate in the restored former Turkish Consulate General in Harar, Ethiopia. This move will strengthen Turkey’s social and religious ties on the Harar-Hargeisa-Djibouti line.

The second move may be paying special attention to Mekelle, the second-largest city in Ethiopia, in order to develop social bonds with the local population. Recently, the Turkish Maarif Foundation opened a school in Mekelle as a sign of Turkish interest in developing relations with the Tigray region. In the past, the tomb of King Negus in Mekelle was restored by the Turkish Cooperation and Coordination Agency (TİKA), but it is currently abandoned. The Turkish Directorate of Religious Affairs can establish a presence in Mekelle by hiring a local imam and re-establishing ties with the region. The school opened by the Turkish Maarif Foundation in Mekelle is currently the most popular school in the region and is working at full capacity.

Turkey has been conducting a mediation process between Somalia and Somaliland for a long time without any serious progress. It would be appropriate now for the regional countries to support the Turkish effort to establish workable relations between the two countries and between Somalia and Somaliland and the other countries in the region, including Ethiopia. Following the security agreement between Turkey and Somalia, such a constructive move will reinforce Turkey’s constructive influence in the region, bringing an end to the disturbances between Somalia and Ethiopia. This, though, can only be achieved with the help of the regional countries.

Today, Turkey is visible everywhere in the Horn of Africa in a multidimensional manner and continuously emphasizes the tantamount importance of regional peace. Turkey is the only country that has established schools across the region, namely in Djibouti, Hargeisa, Mogadishu, Harar, Mekelle, and Addis Ababa. Regional countries need to utilize Ankara’s presence and relations with different countries in the region for the benefit of the entire region. Only under such circumstances, will everyone win, including Turkey.

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he agreement signed between the defense ministers of Turkey and Somalia on February 8, 2024, has had a significant impact on national, regional, and global politics. At the current stage, there is no official statement regarding the details of this agreement, and examining its possible repercussions is a more promising endeavor than attempting to make assertive statements about it.

Somali President Hassan Sheikh Mahamud stated, “Our Turkish brothers will only protect our seas for ten years under this agreement. After ten years of cooperation, we will have a navy that will protect our seas.” The president’s statement reveals an important detail about the content of the agreement between Ankara and Mogadishu, namely the signing of a 10-year cooperation agreement between the two countries regarding maritime security. It also discloses that Turkey’s presence in Somalia, which began in 2011, and its influence in the Horn of Africa are on even more solid ground following this latest development.

If the agreement with Somalia is evaluated alongside the defense agreement signed with Djibouti on February 19, it becomes clear that Turkey’s presence in the Horn of Africa has increased. The U.S., the United Kingdom, France, China, Italy, and Japan have military bases in Djibouti, while Germany and Spain have military assets in the region, but no military bases. In the medium term, Turkey’s growing presence in the Horn of Africa may also lead to the establishment of a naval base in Somalia or Djibouti.

In addition, given Turkey’s recent rapprochement with the West and its already good relations with Djibouti, Turkey can be expected to contribute to the risks and threats in the Gulf of Aden and the Red Sea. If Turkey were to become a security actor in the Gulf of Aden, this would likely put Iran in a position of concern. Thus, although the agreement was signed between Turkey and Somalia, it has regional implications as well.

Moreover, as Turkey continues its rapprochement with Saudi Arabia, one of the critical issues is likely to be the Houthis. One way to eliminate the parameter of Houthi violence in terms of the security of the Red Sea and the Gulf of Aden is to stop the arms shipments. This, however, could create a situation that directly concerns Iran and Saudi Arabia; as a result, the moves in Somalia and Djibouti are seen as very critical in the context of the Gulf of Aden and the Red Sea.

The Houthis’ asymmetric attacks, especially in the Bab al-Mandab Strait and the Gulf of Aden, have continued since October 19. The attacks are perpetuated primarily with weapons of Iranian origin; if arms smuggling in the region is prevented, the Houthis could be neutralized—a situation that could become a concern for Iran.

The agreement with Somalia paves the way for Turkey to make frequent naval deployments in Somali waters. The presence of the Turkish navy in Somali waters could create a situation that would help curb the illegal, unreported, and unregulated fishing activities of countries such as Iran and China, as well as the recent resurgence of piracy off the Somali coast. Both in the long and medium term, the Turkey-Somalia agreement is likely to strengthen Somalia’s navy and coast guard, with the potential to further deter illegal fishing and piracy. In this context, it is projected that Somalia is losing at least $500 million in revenue annually due to illegal fishing activities.

The economic problem, in fact, is as significant as the current terrorism problem in Somalia. After being elected president of Somalia for the second time, in his speech during his visit to SETA in Ankara July 2022, President Mahamud stated that he would focus very seriously on the fight against terrorism. At the same time, Somalia’s economic development will eliminate many of the security problems caused by al-Shabaab and other militants.

Regional implications of the agreement with Somalia

President Erdoğan visited Somalia in 2011 when the country had been left to its fate. That year was a new beginning for Somalia, and now, the new agreement between Turkey and Somalia, which heralds a renewed alliance between the two countries, can be regarded as a “second 2011.”

The agreement has the potential to allow steps to be taken towards the security of Somalia’s territorial waters, allowing investments in Somalia and tourism activities in the coastal area to increase. What is more, economic prosperity in Somalia can be expected to increase and security problems to decrease. At the same time, the improved security environment, supported in part by Turkey, will also provide an opportunity to increase investments in relevant regions.

An important aspect of the agreement is the compatibility of the development with Egypt’s foreign policy. Recently, immediately after the meeting between President Erdoğan and Egyptian President Sisi, the Egyptian Deputy Foreign Minister for African Affairs visited the Turkish Ministry of Foreign Affairs. The possible cooperation between Turkey and Egypt in Africa was discussed during the meeting, establishing that Egypt has accepted the presence of Turkey in East Africa.

In addition, the Turkey-Somalia agreement has the potential to affect the Egypt-Ethiopia-Sudan equation in the context of the Grand Ethiopian Renaissance Dam (GERD) in terms of regional competition in the Horn of Africa and East Africa. Of course, the agreement does not directly affect this issue; however, the expectation of increased cooperation with the Egypt-Turkey normalization can potentially affect the security perspective of Egypt’s attitude towards Ethiopia regarding the dam with Ethiopia. It should be noted, though, that Turkey should not be expected to intervene directly on the issue.

Egypt also supports the Federal Government of Somalia against the Ethiopia-Somaliland MoU. At this point, Turkey and Egypt stated that they stand by international law against Ethiopia’s move into Somalia. Yet, it should be noted that the agreement that Turkey made with Somalia was not related to the Ethiopia-Somaliland MoU, and that Turkey has good relations with Ethiopia. In fact, in addition to the economic ties between Ethiopia and Turkey, which is the second country with the most investments in Ethiopia after China, they seem to stay away from attitudes that would negatively affect mutual relations.

Global Actors’ Reactions to Turkey’s presence in the Horn of Africa

After the agreement signed by the defense ministers of Turkey and Somalia, the United States and the United Kingdom, which had previously been active in Somalia, took initiatives to hold meetings there with the Somalian government. Global and regional actors are likely to be concerned about Turkey’s increased influence and footprint in the Horn of Africa, and the U.S. can be seen to have expectations of cooperation with Turkey in the region.

Somalia has a federal structure, and the U.S. and the UK are working closely with the administrations of Puntland and Somaliland, respectively. It is possible that the U.S. will cooperate with police forces and maritime security in Puntland, which borders Somaliland and has a coast on both the Gulf of Aden and the Indian Ocean. In fact, Puntland’s maritime security forces are being trained by the U.S. At the same time, the UK is implementing a similar plan in Somaliland.

Following the agreement with Somalia, the U.S. expects cooperation with Turkey in new areas. Turkey and the U.S. are already cooperating against al-Shabaab terrorism in Somalia. However, the gains that Turkey and Somalia can achieve together in Somali waters, especially for Somalia’s blue economy, can potentially affect U.S. economic interests. On the whole, Turkey and the U.S. are not expected to directly confront each other regarding the conflict and challenge in Somalia, and have the potential to cooperate on specific files both in Somalia and throughout Africa. At the forefront of these issues is the fight against terrorism.

Overall, although Turkey and the U.S. are two allied countries within the NATO alliance system, they pursue very different policies in the context of Africa. Energy and economic policies play an essential role in U.S. policy in Somalia and Africa as a whole. On the other hand, Turkey’s success story in Somalia and across the African continent is rooted in a policy that is “people-oriented,” and based on the principles of “winning together” and “partnership.” In this light, Turkey and the U.S. have different approaches to Africa.

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recent threat by the United States to impose sanctions on financial institutions engaged in business with Russia has led to a slowdown in Turkish-Russian trade, affecting payments for both imported oil and Turkish exports, according to seven sources familiar with the matter.

The U.S. executive order issued in December did not specifically target the energy sector, but it has complicated payments related to Turkish imports of Russian crude and Russian payments for a broader range of Turkish exports. The sanctions aim to reduce Kremlin revenue and disrupt its activities in Ukraine without impeding Russian oil flows to global markets.

While the threat has not disrupted Turkey’s crude supplies significantly, some delays and disruptions in payments have occurred, particularly due to Turkish banks reviewing business relationships and tightening compliance with Russian clients. Russia, a major crude and diesel exporter to Turkey, has faced similar payment problems with other countries, affecting oil supplies to India and complicating those to the United Arab Emirates and China.

Complexity to the trade relationship

Russian President Vladimir Putin and Turkish President Tayyip Erdogan have been working to maintain close ties, with Ankara opposing Western sanctions on Moscow. However, the recent threat of secondary U.S. sanctions on Turkish banks and companies has added complexity to the trade relationship.

The disruption in payments began after the U.S. executive order on December 22, raising concerns among Turkish banks about potential risks associated with doing business with Russia. Turkish exports to Russia in January saw a 39% year-on-year decline, while imports from Russia fell 20.2%. The impact has been more prominent in non-oil trade, with exports of machinery, in particular, coming to a halt.

Turkish banks are said to be taking “extremely meticulous” measures regarding sanctions, with compliance departments closely scrutinizing transactions. The U.S. State Department expressed encouragement for reports that Turkish banks are reviewing and tightening their compliance programs for Russian clients, emphasizing the responsibility of foreign financial institutions to avoid processing transactions benefiting Russia’s military or circumventing U.S. measures.

Heightened restrictions

Additionally, two other Turkish banks have reportedly issued 30-day closure notices to Russian corporate clients who had opened accounts following Moscow’s invasion of Ukraine in 2022. The affected businesses include those using Turkey as a transit jurisdiction for settlements and deliveries, along with oil and gas traders, according to Iskander Mirgalimov, an international payments consultant for Russian businesses.

Individual clients are also facing heightened restrictions, including the necessity to maintain a higher account balance, as Turkish banks adjust their practices in line with increased scrutiny and compliance requirements.

These developments mark the latest impact of the U.S. sanctions threat on Turkish-Russian economic relations, adding further complexity to the financial landscape between the two countries. The situation continues to evolve, with potential consequences for businesses and individuals engaged in cross-border transactions.

Source: Reuters

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urkish Energy and Natural Resources Minister Alparslan Bayraktar embarked on a diplomatic mission to Venezuela, aiming to fortify energy collaboration between the two nations in the crucial sectors of oil, gas, and mining. The high-profile visit included significant meetings with Venezuelan officials and resulted in the signing of several crucial agreements.

On January 30, Bayraktar held a pivotal meeting with Venezuelan Petroleum Minister Pedro Rafael Tellechea Ruiz in Caracas. Both ministers engaged in discussions centered around oil and natural gas exploration, production, trade, and services. Following the productive talks, Venezuela and Turkey formalized their commitment to enhanced collaboration by signing a memorandum of understanding for oil and natural gas cooperation.

Minister Tellechea expressed the significance of the meeting, stating, “We reviewed various issues of strategic cooperation and the great window of opportunity that exists for investments in oil and gas.” The agreement lays the groundwork for future joint ventures and economic partnerships between the two nations.

Energy and mining

Later in the day, Minister Bayraktar met with Venezuela’s Vice President, Delcy Rodriguez, to further discuss ways to strengthen alliances in energy and mining. Rodriguez highlighted the importance of increasing commercial exchange and encouraging direct investments between the two countries. The discussions underscored the mutual commitment to fostering economic ties and exploring new avenues of cooperation.

The Turkish energy delegation didn’t stop there; they also engaged with Ecological Mining Development Minister William Serantes Pinto. The meeting focused on the potential for investment and collaboration in the mining sector.

Minister Bayraktar expressed optimism about the opportunities for Turkish companies, including state-owned entities such as Eti Maden, MTA (Mineral Research and Exploration General Directorate), and Turkish Petroleum International Company (TPIC), to operate in Venezuela.

The culmination of the official visits took place on January 31 when Minister Bayraktar met with Venezuela’s President, Nicolas Maduro. Following the meeting, Bayraktar pledged to deepen cooperation with Venezuela in the energy and mining sectors. “Our goal will be to further expand our relations, which are built on solid foundations, with our collaborations in the fields of energy and mining,” stated Bayraktar.

Bilateral relations between Turkey and Venezuela

The visit has marked a significant shift in bilateral relations between Turkey and Venezuela, with Minister Bayraktar emphasizing the transformative dimension the official visits have imparted to the ties between the two nations. As a testament to the commitment to cooperation, Bayraktar signed two separate memorandums of understanding with Venezuelan Petroleum Minister Pedro Rafael Tellechea Ruiz and Ecological Mining Development Minister William Serantes Pinto.

In a social media post, Minister Bayraktar expressed hope that the signed agreements would yield tangible results that deepen the relations between Turkey and Venezuela. The comprehensive approach to collaboration in energy, mining, and trade is expected to open new avenues for economic growth and strengthen the bonds between these two nations.

Source: Anadolu Agency.

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urkish President Recep Tayyip Erdoğan announced a groundbreaking achievement as Turkey embarked on its first human space mission, marking a significant milestone as the nation enters the second century of the Republic.

In a video message, Erdogan expressed pride in this historic moment and underscored the importance of Turkey’s manned space mission, which symbolizes a new chapter in the nation’s scientific history.

“We are taking a step into the second century of our Republic, the Century of Turkey, with the manned space mission we have undertaken for the first time,” declared president Erdoğan, emphasizing the cultural and scientific contributions of Turkey throughout history.

He highlighted the mission’s inspirational aspect, as Turkey sends its first citizen, Alper Gezeravci, a former pilot in the Turkish Air Force, into space. Gezeravci’s journey to the International Space Station is part of Turkey’s National Space Program, and Erdogan expressed pride in achieving one of the program’s key goals.

13 experiments

Erdoğan emphasized the scientific significance of the mission, with 13 experiments covering diverse fields such as astronomy, medicine, genetics, and material science to be conducted during the 14-day mission at the International Space Station.

The launch, initially planned for January 9, took place on January 18 from Cape Canaveral, Florida, under the Ax3 mission by private space exploration firm SpaceX. Four space travelers, including representatives from Turkey, Spain, Italy, and Sweden, are set to conduct over 30 scientific experiments and demonstrations during their orbital research on the ISS.

Axiom Space Astronaut Mission

In a separate development, Axiom Space successfully launched Turkey’s first astronaut, Alper Gezeravci, and three other crew members on the Ax3 mission from NASA’s Kennedy Space Center in Cape Canaveral.

The Axiom quartet, aboard a SpaceX Crew Dragon capsule atop a Falcon 9 rocket, embarked on a 36-hour flight to the International Space Station (ISS). The mission is a testament to Axiom’s growing business of arranging commercially sponsored missions from its Houston-based startup.

The launch was a significant achievement for Turkey, marking its entry into the exclusive group of ISS-guest countries. The mission aims to conduct more than 30 scientific experiments during the crew’s approximately 14 days in microgravity aboard the ISS, focusing on various aspects of human health and disease in space.

The success of this all-European commercial astronaut mission reflects the increasing global interest in space exploration and enhances the prestige and capabilities of participating nations.

Source: Anadolu Agency and Reuters

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olitical parties are shaped by the different divisions within society. Studies on the emergence of political parties generally take into account different variables such as socioeconomic divisions, religious and ethnic distinctions, urban and rural divisions, sentiments towards the current system of governance, foreign policy preferences, and whether economic policies are state-oriented or private entrepreneur-oriented. However, the shaping of politics over time, the presence of parties in the political arena, as well as their rise or fall in influence, are also explained through various other dynamics.

Although political tendencies in the world are categorized on the basis of two main labels, namely right and left, the breadth of the political spectrum cannot be explained solely on the basis of this distinction. The practice of political culture, the conjunctural positioning of election periods, and the constitutional and legal obligations of the political and electoral system often render a distinction solely based on a template of values ambiguous. In Turkey, despite the changes and transformations in politics and society, the main issues and axes that shape voter behavior still remain decisive.

For example, in the 2023 elections, as a manifestation of Turkish modernization, the idea of shaping society from the top down through elites influenced the political actors of the opposition bloc as they tried to bring together parties with different identities under the leadership of the Republican People’s Party (CHP), assuming that the electorate would accept their engineered political vision. Through the discourse of the “historical and intellectual background of the Table of Six,” the opposition bloc tried to idealize the combination of right-left, conservative nationalist and secular liberal as a search for a kind of social contract, through ideas that even the actors sitting at the table themselves were ambiguous about.

Some of those who expressed this view, which was put forward as a “Century of accumulation,” did not hold back from declaring that after the elections the last thing they would want in their political lives was to be a CHP candidate. They misconstrued the transformation in politics and society in Turkey and presented de-politicization as a political tactic. This interpretation of politics was a manifestation of a failure to analyze fully the dynamics of Turkish politics and the basic worldviews and perspectives of Turkish society.

Continuities and ruptures in political culture

The divide that has existed between society and elites since Ottoman modernization has been the dominant determinant of Turkish politics in the last century. This dividing line, which stands out in political and sociological analyses as the center-periphery divide, has formed the founding basis for political parties in Turkey and the way they relate to society.

Since the Tanzimat period, certain elitist interest groups led and articulated by the military and civilian bureaucracy, mainly the forces representing the center, have supported political parties hat represent the interests and worldview of the latter. Meanwhile the more traditional, conservative, and religious segments of society, representing the periphery, have mostly clustered around the parties that are the main carriers of right-wing politics within the periphery bloc. Periodically and conjecturally exceptions exist and there are partial crossovers between these two main blocs, but for the most part identities are the main determinant of the behavior of the majority of voter clusters. In other words, the weight and determinacy of right-wing politics in Turkey persists.

Since its foundation, the CHP has represented the central forces, while the Democrat Party and its successors have been the representatives of the periphery. In the entire history of the republic, these two main blocs have also determined the course of ruling-opposition relations. Although the manifestations of social transformation were clearly visible in the 2000s, the CHP failed to achieve a meaningful increase in voter support, let alone win elections. Unable to come to power through democratic means, elitist interest groups and the tutelary structures with which they are allied have historically relied on the fragmentation of political space and the weakness of political structures to reduce the determinism of right-wing politics.

Since the 1960s, intellectuals and the press have played a central role in the fragmentation and polarization of Turkish politics. Most political scientists agree that the fundamental problem of fragmentation and volatility in Turkish politics is the result of intervention through different means and methods in the political sphere.

Political parties in Turkey were established at the beginning of the last century. A multiparty system was first introduced during the Second Constitutional Monarchy (Ikinci Meşrutiyet). In the early Republican period, the opposition attempted to form political parties, but they were soon shut down, as for example in the case of the Progressive Republican Party (Terakkiperver Cumhuriyet Fırkası). In the single-party period, opposition parties were not permitted, and in 1936, the CHP, which was the only party, was integrated into the state.

Multiparty politics began in 1946, but democratic politics began on May 14, 1950 when the Democratic Party (DP) came to power. Since the DP’s first years in power, the state elites—civil and military bureaucracy, the majority of the educated class including the academia, and the economic class fed by the state—wanted democracy to be practiced in a restricted sphere and aspired to monopolize the normative sphere of politics.

By supporting military coups against civilian politics and demanding the permanence of the tutelage establishment, these groups created mechanisms of distrust towards political parties. They believed that only they, as opposed to democratically elected politicians and political parties, could determine the developments that would be in the long-term interests of society.

Thus, when political parties “went astray,” military coups could be “legitimized.” From this perspective, these self-interested tutelage groups supported the coups and coup attempts of 1960, 1971, 1980, 1997, and 2007, blaming the parties elected by popular vote. In order to justify their undemocratic behavior, they took refuge behind the argument that the “political parties had deviated from Atatürk’s principles.”

In order to construe a “flawed democracy,” the elite blamed the people who voted for political parties they did not approve of. When the parties they opposed were elected, they devalued the people’s preferences by saying “democracy is not just about the ballot box” and that the majority of voters belonged to the “ignorant masses.” The idea that the main characteristic of Turkish modernization was its top-down, coercive nature, that democracy could be dictated from above, and that the people should vote for the indicated parties was defended even by political scientists who described themselves as democrats.

Parties voted into power by the people were punished, periodically removed from power, and had their institutional structures banned from the political arena. Their replacements were asked to engage in politics in a limited and narrowly defined field and, if they came to power, to deal only with roads, sidewalks, bridges, and infrastructure services. Foreign policy, security, higher education, even education and youth policies were required to be framed and implemented by the presidential office under the control of tutelage and the civil and military bureaucracy under its command.

Since the transition to democracy and until the Justice and Development Party (AKP) government, no party has been in power for a long period of time, with the exception of the DP’s 10-year uninterrupted government that ended with a coup d’état. In every election held from the late 1980s until 2002, a different party came out on top.

In Turkey, political parties have always lacked institutionalization and existed as leader-centered entities. The parties of leaders who could not manage political elite change and management well were constantly divided and lost ground. Again, as a result of the lack of institutionalization, external interventions in political parties’ elites often facilitated divisions. With the exception of the AK Party and the DP, none of the parties that were founded as offshoots of major parties have been able to become an alternative to power; these efforts have only contributed to the fragmentation of the political sphere, serving populism and the devaluation of politics.

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he century-long development journey of the Turkish defense industry can be characterized by its pioneering actors and decisive breaking points. The developmental phases of the Turkish defense industry can be outlined in the following phases: (i) Early Republican era (1923-1950), (ii) NATO accession (1952-1964), (iii) the Cyprus Peace Operation (1964-1978), (iv) embargoes on the Turkish defense industry (1980-1990, (v) change in domestic and foreign procurement models (1990-2002), and (vii) the final development phase of the Turkish war industry 2003-2023.

First Steps

The importance of the first phase (1923-1950) lies in the awareness of Mustafa Kemal Atatürk, the founder of the new republic after its heroic liberation struggle, who encouraged self-reliance in national self-defense by developing military skills and capabilities with domestic and national resources. The legacy inherited from the Ottoman Empire, the century-old Sevres conspiracy of the Great Powers, and the transformative impact of World War I on military technology and the arms race played an important role in this consciousness.

For this reason, on the one hand, Atatürk adopted a “peaceful” rhetoric in foreign, security, and defense policies with the principle of “Peace at home, Peace in the world”, and, on the other, he considered the formation of a land, air, and naval war industry as essential for the political, military, diplomatic, and economic rights and interests of the country.

With his instructions, the small arms and cannon repair ateliers, and cartridge and carpentry facilities were gathered under the umbrella of the General Directorate of Military Factories, which was established in 1921 and transferred to the Mechanical and Chemical Industry Corporation (MKEK) in 1950. This initiative accelerated the activities of the arms, ammunition, and chemical factories.

Another distinctive feature of Atatürk’s era was the encouragement of private sector entrepreneurship. Revolutionary names such as Nuri Demirağ and Vecihi Hürkuş, as well as the Turkish Aeronautical Association (THK) and the Turkish Aircraft, Automobile and Engine Limited Company (Tayyare, Otomobil ve Motor Türk Anonim Şirketi, TOMTAŞ), which are today cited as pioneering actors in the history of the Turkish defense industry, are products of the early Republican period.

Likewise, the Gölcük Shipyard, the largest facility of the naval warfare industry today, was established based on the decision to found the Naval Base in Gölcük with Law No. 2173 approved by the Turkish Grand National Assembly in May 1933. However, despite the attempts made during this period, Turkey continued to procure weapons from abroad.

The reason for foreign defense procurement was the desire, on the one hand, not to burden the state with the new enterprises, and, on the other, the time that was required for Turkish companies to reach the technological level to meet the needs of a more modern Turkish Armed Forces (TAF) and to move to the mass production stage. Meanwhile, following Atatürk’s death and World War II, the Turkish warfare industry entered a period of stagnation.

While the destructiveness of the war and its impact on the world economy put many countries into financial bottlenecks, the East-West struggle centered on the Soviet Union and the U.S. was instrumental in strengthening Turkey’s warfighting capability and capacity, while at the same time sowing the seeds of a long-lasting “dependency.”

The third phase (1964-1978) was characterized by the Cyprus Peace Operation in 1964 and the subsequent arms embargo imposed by the U.S. until 1978. With the so-called Johnson Letter Turkey once again realized how vital it was for its national security and interests that it establishes a war industry and maintains it with national sources.

In fact, this bitter experience was not only about the shortage of spare parts and logistical support for the TAF; it also led to the realization of how quickly Turkey’s foreign policy decisions could isolate it from its regional alliances, with which it had developed high-level and multiple engagements.

Thus, Turkey once again turned to indigenous initiatives, this time in a more institutionalized and industrialized manner. The Air, Naval and Land Forces Foundations (Turkish Armed Forces Foundation as of 1987) and companies such as Turkish Aerospace Industries (TUSAŞ or TAI in English), ASELSAN, a defense electronics company, Rocketsan, a rocket and missile manufacturer and defense contractor, and HAVELSAN, a software and systems company, which are the leading institutions and organizations of the Turkish defense industry today, were born in the 1970s.

The fourth phase (1980-1990) of the Turkish defense industry was characterized by overt and covert embargoes. Turkey’s counterterrorism operations against the PKK—as well as its Syrian offshoot, the PYD/YPG today—often lacked support from its NATO and European allies, who introduced new procedures and decisions that made it difficult for Turkey to use the weapons, ammunition, and equipment that Turkey had procured from them.

However, as a result of the lessons learned from the 1970s, Turkey entered the 1980s with a higher level of awareness which led to institutionalization efforts to achieve a more modern defense industry, first with the establishment of the Presidency of Defense Industry Development and Support Administration (SAGEB) in 1985 and then the Undersecretariat for Defense Industries (SSM) in 1989.

Another important aspect of this period is that, despite all the political conflicts of interest and challenging economic conditions, Ankara highly valued cooperation, and in this sense, the joint establishment by the U.S. and Turkey of Turkish Aerospace Industries (TAI) and TUSAŞ Engine Industries (TEI) provided an extremely important theoretical and technical input to the domestic defense industry.

The fifth phase (1990-2002) saw a change in domestic and foreign procurement models thanks to this institutionalization. In this context, Turkey’s procurement trend shifted from smart supply to production under license, co-production, technology transfer, and cooperation.

While the F-16 project was valued as an important acquisition of knowledge and experience, new projects were initiated by the Turkish Armed Forces Foundation companies from this accumulation and capability enhancement.

The indigenization of the defense discourse

The sixth and final development phase (2003-2023) of the Turkish war industry is the period from the beginning of the 21st century to the present day. The defining characteristic of this period is the defense industry discourse of the AK Party, which has been in power for the last 20 years, and which has been widely featured in both the party charter and election manifestos.

This discourse is based on the pursuit of indigenization, nationalization, and strategic autonomy, and subsequently took on a more robust face with the “National Technology Initiative.” A Defense Industry Executive Committee (SSİK) meeting in 2004 represented the first breaking point in these discourses and practices. In this meeting, it was decided to cancel many foreign procurement projects that were already on the table, and to develop the new procurement structure, which was envisioned to be applied to many old projects whose seeds were sown in the 1990s, by maximizing the support of domestic resources and capabilities. In the new period, Turkey has given higher priority to indigenous design and R&D models, taking advantage of co-production, technology transfer, and cooperation models.

This revolutionary decision initially raised some concerns about meeting the needs of the TAF in a timely manner and with competent technology. However, the projects that were realized in a short period of time, and the platforms that were quickly brought into the national inventory and put into the development phase with feedback from the field, gained the confidence of the TAF.

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he ongoing crisis in the Middle East once again confirms that Turkey is the safest and most reliable route for East-West trade. However, how could Turkey further utilize its geo-economic, geopolitical, geostrategic, and geocultural location in global trade competition and in the new era of rising trade corridor wars? Why is there an argument that there can be no corridor without Turkey? And why must Turkey be included in all relevant new trade routes and economic corridors?

As a country positioned at global trade crossroads, Turkey both strategically and logistically should be part of all trade equations between East and West. This is both for Turkey’s own benefit and for the longer-term success of such projects. Turkey’s involvement in these projects may also create significant positive regional and global externalities. Improving relations with the Gulf could, for instance, foster a solution for energy and trade equations in the Eastern Mediterranean.

Turkey has greatly strengthened its privileged position thanks to remarkable infrastructure investments in the last 20 years. Turkey’s infrastructure is well prepared as huge investment projects, from bridges and highways to seaports and airports, new high-speed train lines and other large-scale projects such as the Marmaray, are already completed.

Global power balances are also shifting: together with global integration and cooperation, global and regional competition is also a fact. Multipolarity is the new contemporary reality, and Ankara is strengthening its position in this new era of global economic competition, aiming to preserve its strategic autonomy. Meanwhile, as part of this geostrategic competition, numerous new trade routes or economic corridors are under discussion, and have given rise to economic and political debates.

In this sense, sundry new major developments are in order in the global political and economic landscape. New transformations have been triggered by new trade routes, tackling dependence on reserve currencies; by regional and strategic cooperation mechanisms gaining significance with the changing global economic center of gravity, and the increase in the importance of new economic and political cooperation organizations such as BRICS; and by the increasing importance and weight of the Asia-Pacific, Africa, and the Middle East in the global economy and global politics.

Turkey is at the epicenter of the most suitable trade routes from East to West, providing the most convenient corridors from Asia and Africa-MENA to Europe; political considerations, however, often push this reality into the background. The options to keep Turkey out of the equations are often kept on the table as a bargaining card too.

Yet, Turkey is the safest and most suitable route from East to West, thanks to its human capital, logistic transportation, supply chain infrastructure, and strategic intercontinental advantages. Turkey is a natural candidate to connect economies along all cardinal directions and its stance regarding the India-Middle East-Europe Economic Corridor (IMEEC), or any similar projects, is crystal clear. Turkey monitors all regional trade and economic cooperation attempts, and reminds all parties that there can be no corridor without Turkey.

The IMEEC, on the other hand, was a rather surprise outcome of the G20 Summit in New Delhi, India, in September 2023. This new trade route is projected between Asia and Europe, and is supported by the U.S. and the EU. The IMEEC is a new strategic extension to the global trade routes or supply chains; however, in many ways, it also resembles the historical Spice Route and has thus been described as a “modern Spice Route.”

The memorandum of understanding or declaration to build this new economic corridor was signed during the G20 meeting in India. The IMEEC is a new framework to build an economic cooperation and a trade corridor to enhance cross-border economic cooperation and integration in South Asia, the Middle East, and Europe. The project was signed by India, Saudi Arabia, the UAE, the U.S., the EU, France, Germany, and Italy. The corridor is expected to pass through India, the UAE, Saudi Arabia, Jordan, Israel, Cyprus, Greece, and Italy.

The project consists of maritime, railway, and highway legs. It will have a maritime leg in the Arabian Sea and the Mediterranean Sea, and railway transport and land routes on the Arabian Peninsula and in Europe. New railway networks in addition to the existing sea and land routes are expected to be established between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe.

Goals and questions

The IMEEC corridor is commonly perceived as

• a major alternative route to the Chinese Belt and Road Initiative (BRI), and
• a means to contain China and promote the Indian economy.

It further aims to

• mitigate China’s growing proactive role, and counter its economic and political influence in the Middle East and Asia;
• support alternatives to the Belt and Road Initiative (as in the 2022 announcements regarding the Global Gateway);
• foster the normalization process in the region and improve connectivity (adding on to the Abraham Accords);
• enhance regional stability and global economic cooperation;
• build huge infrastructure investments, new railways, and ports;
• improve global digital connections, and create new “green and digital bridges” (using cable connections);
• strengthen the supply chains between East and West as part of the search for new alternatives after the COVID19 pandemic; and
• facilitate regional economic growth.

The IMEEC aims to connect India, the new global manufacturing hub, to the Middle East and Europe. The U.S. and EU support this project despite India’s economic, political, and even military cooperation with Russia. Meanwhile, the Gulf region economies are still looking for ways to diversify their economies from dependency on fossil energy exports.

That being said, the potential impacts on other regional trade routes and projects should also be considered. Maritime jurisdiction disputes in the Eastern Mediterranean and the Arabian Sea are a critical issue in terms of security. For instance, the project in its current form seems to pass through the Turkish EEZ (Exclusive Economic Zone), and it seems unlikely for Turkey to approve a project that would exclude it from partnership. The EastMed pipeline is a good example of such a failed project.

Moreover, the multilayer steps in transportation could also increase monetary and time costs. Loading ships two times, once in India and once in Israel, and unloading them twice, once in the UAE and then in European ports, indicate a very inefficient process. The fact that regional projects without Turkey are just corridors (consisting of sea, railway, and highway legs) with more filling and unloading means significant loss of time and cost. Even just for this, Turkey’s exclusion from such projects does not appear to be a rational choice.

Factors such as political uncertainty in the region, controversial bilateral and multilateral relations, security, time, and profitability are also noteworthy disadvantages for the corridor in question. Despite the current positive atmosphere, the economic rivalry between Saudi Arabia and the UAE (both of which are focusing on saving their economies from energy dependence and their investments in the energy and technology sector and the problems that Israel may experience with the countries in the region may also pose a handicap for the project.

Furthermore, while the chosen IMEEC route aims to divert trade from insecure routes such as Syria, Iraq, and Iran (and even pirate attacks in the Red Sea), the Israeli territory may not be that safe either, as has been the case recently. This very fact is proven once again with the Palestinian-Israeli conflicts resumed in October 2023.

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he 20th century did not start off well for the Ottoman Empire. The expansionist states of the period saw the Ottoman Empire, which they described as the “Sick Man of Europe,” as a country whose resources and territory were to be shared.

In 1923, Turkey had won the War of Independence on the military front, but it was vulnerable to new threats from outside as it was not among the economically and militarily powerful actors in the international political system established after World War I. In addition, the Ottoman Empire was among the war’s defeated states and suffered great territorial losses, forced to give up many regions with rich economic resources, notably energy.

The newly established Republic had a population of 12.5 million, a GDP of $561.4 million, exports of $51 million, and imports of $87 million. (Table 1) With these indicators, the new Republic, whose share in the world was insignificant, directly neighbored Britain and France, the major power centers of the period, via Iraq and Syria, which were under their tutelage.

Via the Dodecanese, Turkey neighbored Italy, which had declared fascist rule with Mussolini’s rise to power in 1922 and did not hide its expansionist ambitions by calling the Mediterranean “Mare Nostrum” (Our Sea). Turkey was also neighbors with the Soviet Union, another important state of the time, via the Caucasus. Under these circumstances, Turkey, surrounded by threats on all four sides, had to increase its economic and military capacity rapidly while pursuing a policy of balance through successful diplomacy in order to eliminate the risks of its relative weakness.

TABLE 1: TURKEY’S POPULATION AND BASIC ECONOMIC INDICATORS IN THE PERIOD 1923-1960

Source: Ekrem Pakdemirli, Numerical Outlook of Our Economy, Milliyet Publications

An analysis of economic data from 1940 reveals that Turkey did not make significant progress in increasing its power, and that its foreign trade volume remained at a similar level to that of 1923, despite nearly tripling its GDP in the ensuing 17 years. In this period, the share of European countries in Turkey’s foreign trade was more than 60%, indicating the weight of Europe on Turkish foreign policy.

In parallel with its low economic capacity, Ankara tried and succeeded in staying out of World War II. Despite the alliance agreement it had signed with Britain and France in 1939, Turkey did not enter the war against Germany and its allies, citing the lack of military support from these countries and maintaining a policy of balance throughout the war. However, in 1945, when the outcome of the war became clear, Turkey officially declared war against Germany and Japan.

Asymmetric dependency

Turkey’s economic and military weakness in the postwar period was the main determinant of its foreign policy in the newly emerging bipolar international political system. Ankara, which felt that it did not have the means to resist the pressures and threats of the Soviet Union, decided to pursue rapprochement with the Western bloc. As a result, Turkey decided to transition to democracy and sent troops to Korea to join NATO, the Western bloc’s main military organization.

By 1950, Turkey’s population had reached 20.8 million and its exports and imports had risen to $263 and $286 million, respectively. With 0.84% of the world’s population, Turkey’s share in total world exports was 0.47%, while its share in total world imports was 0.49%. Increased military and economic cooperation with the United States led to a significant increase in Turkey’s GDP, reaching $9.2 billion in 1960, but also to an asymmetrical political dependence on Washington.

Although Turkey continued to be part of the Western bloc between 1960 and 1980, it was during this period that it experienced its first major crises with the United States. The two major crises of 1964 and 1974 were caused by tensions over Cyprus. Washington prevented Turkey from using its guarantor rights to help the Turks under attack in Cyprus in 1964 with the Johnson Letter, and imposed an arms embargo on Turkey in 1974 following Ankara’s military intervention on the island after the coup d’état. Turkey’s dependence on the United States for its defense industry made it easier for Washington to pressure Ankara with measures such as the arms embargo.

Diversifying foreign policy

Turgut Özal, who left his mark on Turkish politics in the 1980s, wanted to reduce the excessive weight of the United States in Turkish foreign and domestic policy through new collaborations. In this framework, Özal revived relations with the European Union and made EU membership one of the most important goals of Turkish foreign policy.

Özal also aimed to improve cooperation with Iran, Pakistan, and later with Central Asian countries under the Economic Cooperation Organization (ECO), and with the countries around the Black Sea, especially Russia, through the Black Sea Economic Cooperation Organization (BSEC). The most important of these initiatives, which aimed to balance the U.S. by diversifying Turkish foreign policy, was undoubtedly the cooperation with the EU.

Özal hoped to alleviate the discomfort that Turkey’s pursuit of a more independent foreign policy would cause in Washington. Thus, while Turkey’s improved relations with the countries of the Middle East and Central Asia, as well as with Russia, would have disturbed the United States, it would not be easy for the U.S. to object to Turkey’s rapprochement with the European Union.

However, the EU shifted its interest in enlargement to this region in the wake of the Eastern European revolutions and no longer saw much need for Turkey’s security contribution. As a result, in 1987, the EU rejected Turkey’s application for full membership, exposing the limits of Özal’s policy of rapprochement with Europe. Moreover, even though Turkey’s economic capacity increased significantly during the Özal period due to its shift to an export-oriented development policy, the dependence on Western countries for foreign trade and foreign direct investment continued.

The weight of the West in the world economy and the U.S. dominance in the Cold War resulted in the U.S. and European countries being the most important determinants of Turkish foreign policy in the 1990s. During this period, Turkey was once again governed by coalition governments, which led to political instability and the February 28 coup d’état. Following this coup, which was supported by wide circles in the U.S. and European countries, the weaknesses in the country’s economic management led to the 2001 crisis, one of the biggest economic crises in Turkey’s history.

One of the most important consequences of the crisis was Ankara’s increasing dependence on Western countries and the international financial institutions they dominate. After coming to power in late 2002, the AK Party government had a very difficult task ahead of it: to manage this relationship without harming Turkey’s interests.

The 21st century also began with difficult conditions for the Republic of Turkey. Turkey was experiencing one of the biggest economic crises in its history and was struggling politically with the instability caused by the February 28 coup in 1997. After scoring a victory at the November 3, 2002 elections, the AK Party came to power alone and brought stability to Turkey. Rapid economic growth and military capacities were able to suppress foreign pressure and intervention in the 2010s, making Turkey more resilient.

Multilateral balanced policy planning

On the one hand, the AK Party administration had to maintain close relations with the U.S. and European countries in order to access the financial resources Turkey needed, and on the other, it had to prevent Washington and European capitals from excessively interfering in Turkey’s foreign and domestic policy. The first major tension in this context was with the United States. Washington had expected Ankara to support the intervention in Iraq, which was against international law, in return for its economic support to Turkey; however, as a result of the March 1 decree, the U.S. could not open a front against Iraq through Turkey which led to a long-lasting crisis in Turkey-U.S. relations.

The steps taken by the U.S., which had invaded Iraq, to foster the development of the PKK in that country and to prevent the Turkish Armed Forces from continuing their operations against this organization in northern Iraq once again demonstrated that Turkey needed to establish a more balanced relationship with the U.S. in line with its national interests.

The first serious crisis in relations with the EU, which had been progressing well in line with the goal of membership in the first years of the AK Party’s rule, emerged over the Cyprus issue. The Merkel government, which came to power in Germany in 2005, openly expressed its opposition to Turkey’s EU membership, and the Cyprus issue was used as leverage to block membership. The 2007 French presidency of Nicolas Sarkozy, who was openly against Turkey’s membership, led to a crisis in Turkey-EU relations.

Turkey’s move towards a more independent foreign policy as a result of its economic and military prowess in the 2000s caused discomfort in the U.S. and its European allies. Their pressure and sanctions in the 2010s to bring Ankara back to Western-oriented policies, in turn, led to an escalation of the crisis.

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he global agenda is concerned with the enlargement of BRICS, a non-formal economic organization consisting of Brazil, Russia, India, China, and South Africa. Though the group does not have an official status, it functions as an international organization and accepts or rejects memberships of applicant countries.

In August, South African President Cyril Ramaphosa announced at the 15th BRICS Summit that Iran, Argentina, Egypt, Ethiopia, Saudi Arabia, and the United Arab Emirates had been invited to join the bloc and the membership will take effect on January 1, 2024.

Aside from new members, 16 countries have formally applied to join BRICS while 16 others, including Turkey, have shown interest in the group. The increasing amount of interest attests to the popularity of the bloc, which attracts countries mainly from the Global South. With new members, BRICS will represent 46% of the global population, 29.3% of global GDP, 43.1% of global oil production, and 25.1% of global exports.

Why do countries want to join BRICS?

There are several reasons why the BRICS are attractive to certain countries. First, current members, future members, and other applicants are non-members of the Western bloc and generally disadvantaged against the U.S. and the EU in many respects. Among many such countries, there is a general understanding that the West tries to maximize its economic and political power and interests on account of the rest of the world. What is more, the maximization policies of the West are considered unfair and often morally questionable actions. Therefore, BRICS-like groupings are seen as a way to resist the destructive dominance of Western economies, best summed up perhaps by the phrase “United we stand.”

Western economic cooperation and organizations may be damaging to the BRICS economies, but they also inspire them to counter them. Indeed, the model of economic cooperation, namely the EU, introduced by the transatlantic alliance worked well after World War II, enriching Europeans. Thus, BRICS members are following Europe’s path to strengthen their economies; BRICS is an organization that both imitates Western institutions and counters them.

New members are not aligned to any bloc, making BRICS the only economic body they can approach. It is quite unlikely that Ethiopia, Argentina, or any Middle Eastern country will one day become an EU member—their best choice for economic cooperation is to be a member of BRICS.

Middle Eastern countries, particularly, tried their best to align with U.S. interests but were disappointed with Washignton’s policies towards them. No Middle Eastern country is willing to be satisfied with allying with the U.S., for example, against Iran and Israel. The example here is political, but politics affect economic relations and alliances. Moreover, new members and BRICS enthusiasts are ideologically closer to BRICS members than the West.

Will Turkey join the BRICS?

As for Turkey, being a BRICS member will bring economic benefits to the country. However, for all countries, including Turkey, economic alliances have political repercussions and are mostly formed according to countries’ political postures. As BRICS is an unofficial union formed by big powers of the Global South, Turkey’s membership would have the greatest consequences compared to any other membership.

To begin with, Turkey sees itself as a European country. While a small part of its territory is on the European continent, it has historical and political ties with Europe and has always turned its face to the West. The secular community which founded the country in 1923 distanced itself from the East (and South) arguing that Turkey should be in the Western bloc.

On the other hand, Turkey’s conservative democratic community, which now governs the country, is not fully aligned with the West nor is it anti-Western. In fact, it would welcome EU membership more than any other economic grouping. Currently, even though Ankara no longer maintains a full allegiance to the West and relations are not at a desired level with the U.S. and the EU, the incumbent government still wants to keep strong ties with both.

At the moment, Ankara prefers not to part ways with Western powers and, concurrently, improves relations with the rest of the world. While it tries to remain neutral in world politics on account of its NATO membership and EU candidacy, it does not want to change its axis completely. Turkey’s balancing policy can be tied to its “Century of Turkey” motto, referring to an independent foreign policy, which is more assertive and gives priority to the country’s own interests. Besides Turkey’s new foreign policy, being estranged by its Western allies compels Turkey to seek new cooperation opportunities. BRICS is not a political bloc and being a BRICS member does not mean an axis change. Yet, being a BRICS member does have political consequences.

In the current circumstances, the Turkish government will most likely opt for improving economic cooperation with each BRICS member rather than becoming a member of the organization. Relations with the BRICS bloc will continue informally and without formal membership.

In addition to Turkey’s orientation towards the West, certain structural problems of BRICS also compel Ankara not to join. First, although China appears to be leading the bloc, its leadership is weak and other members may not accept a more influential member joining the bloc. It is also questionable to what extent members will unite against rivals such as the EU. While Western countries act as a bloc in their economic and foreign relations, this may not be the case for BRICS members.

Saudi Arabia, the United Arab Emirates, and Egypt, for example, will join BRICS for the economic benefits and thus have a sort of backing against Western powers. Russia and China are already challenging the West, while the West is relentlessly trying to pull India out of the group and may sooner or later succeed.

BRICS may not offer Turkey what it expects. The only reason Turkey might apply to join BRICS is as a result of deteriorating relations with Western states. Turkey’s relations with the West are strained, but not bad enough to force the country to go down that road.

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glance at the history of the global economy reveals that certain critical junctures have been decisive for developing countries. And in keeping with the adage that history repeats itself, these critical junctures share some striking similarities: there are noticeable parallels between the historical period of 1971-1982 and today in terms of debt burden, which is a systemic challenge for developing countries and casts a shadow over their economic aspirations.

Let’s take a brief journey in history. In 1971, the U.S. left the Bretton Woods system, breaking the dollar’s link to gold. This bold move removed an important obstacle for the Fed, the U.S. central bank, enabling it to pursue a more inflationary monetary policy to finance the U.S. Treasury’s budget deficit.

After the collapse of the Bretton Woods system, money supply in the United States literally exploded. At the same time, the 1970s witnessed significant geopolitical upheavals, marked by the oil crisis caused by conflicts, wars, and political changes in the Middle East.

As oil-rich Middle Eastern nations restricted the flow of oil to the West, oil prices quadrupled in a short period of time. The surge in money supply and oil prices inevitably sparked inflation, which soared to double-digit levels. But, inflation was not the only problem as oil shortages also affected industrial production and transportation. Western countries faced both high inflation and sluggish economic activity—an economic stalemate known as stagflation.

The effects of stagflation reverberated throughout Western society and led to significant political changes. In 1979, Margaret Thatcher became the first female prime minister of the United Kingdom, while Ronald Reagan entered the White House shortly thereafter. These conservative leaders embraced bold economic policies based on neoliberal arguments. To tackle inflation head-on, they implemented fiscal austerity while giving central banks the green light to raise interest rates.

Up to this point, developing countries have not been major players in our story. However, that changed as global interest rates started to increase. In the 1970s, abundant liquidity and petrodollars provided developing countries with a promising opportunity to borrow. Particularly in Latin America, many countries took on significant debt burdens to finance their industrialization and development projects.

A significant portion of this debt was based on floating interest rates. In the 1970s, when liquidity was abundant and interest rates low, repaying this debt did not seem difficult. But things changed in the early 1980s and rising global interest rates made it harder to roll over debt.

The debt crisis that erupted in Mexico in 1982 spread first to Latin America and then to other developing countries around the world. Many countries turned to the IMF for help in overcoming their economic challenges, but the IMF’s support came with harsh conditions, namely the implementation of neoliberal policies that came to be known as the “Washington Consensus.” There was a sigh of relief for a while, but it did not last long.

As a result of the pandemic, supply chains experienced production bottlenecks, international transportation became more difficult, protectionist policies were put in place to discourage critical export items, and some countries stockpiled raw materials as a precaution. These events made the supply of intermediate goods very difficult and production costs began to rise. On top of all these developments came Russia’s invasion of Ukraine. With the outbreak of war, energy prices soared, fueling inflation.

The global economy faced the highest inflation in 40 years in 2022. Major central banks such as the Fed, the European Central Bank, and the Bank of England tightened monetary policy to fight inflation, and other central banks followed suit with global interest rates reaching 20–25-year highs. Debt repayment became a major headache due to, on the one hand, the increased need for borrowing due to the difficult economic conditions of the pandemic period and, on the other, the interest rate hikes due to post-pandemic inflation.

In the current global economic landscape, cumulative global debt exceeds an alarming $300 trillion, with developing countries accounting for a substantial share of about $100 trillion of this debt stock. Among the various components of this debt composition, it is evident that external debt is emerging as a prominent concern for developing countries.

The challenges posed by external debt arise not only from the escalation of interest rates, but also from the depreciation of local currencies, which exacerbates the complexity of debt repayment. External debt to gross national income ratio in low- and middle-income countries (excluding China) has increased from 25.6% in 2010 to 36.3% in 2021.

Rising global interest rates are making debt management more difficult, especially for poor countries. According to IMF calculations, eleven poor countries including Ghana, Mozambique, Sudan, Zambia, and Zimbabwe are in debt distress. Twenty-five countries, on the other hand, are in the high-risk debt category. It is important to underline that the aforementioned list does not encompass middle-income countries such as Sri Lanka and Lebanon, which grapple with significant debt burdens, as well as the prominent G20 member Argentina. Obviously, these countries also face formidable challenges in the debt rollover process.

The United Nations Conference on Trade and Development (UNCTAD) recently published a report with striking figures on the rising burden of interest and debt. The report exposed that 3.3 billion people live in countries that spend more on interest payments than on health or education. In the period 2019-2021, interest payments by developing countries will increase by 60.4% compared to the period 2010-2012. However, public spending on development-related areas such as health, investment, and education did not keep pace with interest payments. During this period, public spending on health, investment, and education increased by 54.7%, 41.1%, and 40.8%, respectively.

The money lost to interest payments shrinks public resources that could be channeled into development-friendly areas. As global liquidity tightens and interest rates rise, the gap in borrowing conditions between countries is widening. For example, countries in Africa can borrow on average at interest rates four times higher than the U.S. Borrowing costs in Latin America and the Caribbean are 2.5 times higher. Under these circumstances, it is very difficult for developing countries to catch up with advanced economies.

In a nutshell, the triangle of inflation, interest rates, and debt burdens shows that there are similarities between the 1971-1982 period and today. External shocks such as geopolitical tensions also reinforce this similarity. Inevitably, the question arises, “Could developing countries potentially face a debt crisis similar to that of the 1980s?”

As discussed above, there has been a discernible deterioration in debt burdens and debt rollovers in developing countries. However, it is important to note that the debt crisis is not all-encompassing. Although the debt ratios of major emerging economies such as China, Mexico, Brazil, Turkey, and South Africa have deteriorated, these countries are not experiencing significant difficulty in rolling over their debt despite rising interest rates.

Unlike in the 1980s, developing countries are more integrated into global trade, their economies are more diversified, and they have better macroeconomic governance. All these characteristics give emerging markets more foreign exchange earnings, flexibility, and experience in managing debt.

Nevertheless, there is little room for complacency. While upper middle-income countries may not face significant immediate challenges, it is clear in the current equation that debt has been increasingly becoming a vexing problem for low- and lower-middle-income countries.

As the cases of Sri Lanka and Lebanon illustrate, debt not only distorts key economic indicators but can also inflict significant social wounds. In addition, the growing fragility of the global economic and political landscape deserves due attention. Economic uncertainties and geopolitical risks remain high. Protectionist measures by developed countries are slowing the growth rate of global trade, which is vital for developing countries as it provides them with the foreign exchange inflows that are necessary for repaying their debt burdens.

Against this backdrop, developing countries need to be vigilant about their debt burdens, especially external debt. On the one hand, they need to embark on fiscal reforms to reduce their current debt ratios while, on the other, it is essential to accelerate the transition away from the debt-fueled growth model.

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n October 1, 2023, the European Commission will regulate all trade with non-EU countries. This new regulation aims to decarbonize trade by discouraging exporters who sell carbon-intensive products. Industrial goods such as cement, iron, steel, and fertilizers will be subject to certification requirements as to whether they are carbon-free.

Such a policy jeopardizes Turkish exports to Europe which account for more than 50% of Turkey’s trade balance. Industrial goods such as iron, steel, and hydrogen also form a significant share of Turkish exports. Turkey either must change its exports or find new partners for trade. However, the country has a promising strategy to tackle both environmental and commercial concerns.

Turkey is launching a brand-new project in Bandırma: Turkish engineers, under the auspices of the South Marmara Development Agency (GMKA), have planned to build a sustainable energy production facility. By producing green hydrogen, this project has the potential to transform Turkish industry as the country can decarbonize its industrial output through green hydrogen from Bandırma.

Bandırma’s hydrogen initiative: HYSouthMarmara

Why did Turkish scientists choose Bandırma, a small town south of the Marmara Sea, as a new energy hub? The answer lies in Bandırma’s fertile alternative energy potential. Bandırma alone contains 21% of Turkey’s wind farms. This extensive renewable capacity leads to greater opportunities to produce green hydrogen, which is the most valuable form of hydrogen and the cleanest energy option.

Green hydrogen, which electrolysis plants in Bandırma will produce, can easily be produced using renewable energy. In addition, Bandırma has the capacity to produce more green hydrogen than any country in Central Eurasia. Bandırma’s renewable energy alone meets 13% of Turkey’s electricity needs.

Turkish engineers are determined to produce more electricity. Engineers will have to utilize Bandırma’s wind and solar power to produce green hydrogen, which in turn they can use to produce cleaner electricity through electrolysis. Since they already have access to Bandırma’s renewables, the only remaining challenge is to build high-capacity electrolysis facilities.

With HYSouthMarmara, Turkey can be a regional green energy hub. The GMKA estimates that Turkey will be producing green hydrogen at the volume of 500 tons per year. With this capacity, Turkish engineers can produce steel, iron, and fertilizers without intensive carbon emissions.

Combined power of boron and hydrogen

Turkey’s HYSouthMarmara project promises more than saving Turkish exports to Europe. Green hydrogen could be a strategic asset for the country as it has the potential to diversify boron-based production. Green hydrogen can be combined with boron, paving the way for new sustainable alternatives. This is a crucial development for Turkey, which has 73% of the world’s boron reserves.

Turkey’s plans for this project include the development of an environmentally friendly type of fuel. With existing boron reserves, Turkey can accelerate the production of sodium borohydride, which is a compound that is useful for storing hydrogen. The storage capacity of sodium borohydride is similar to that of diesel, and the automotive industry can easily use it for electric cars.

However, it is worth noting that aviation emits 100 times more carbon than cars, and thus a new challenge is to reduce the harmful effects of jet fuels. Turkey’s hydrogen hub offers new alternatives as green hydrogen and sodium borohydride can be combined and used to develop alternative jet fuels. Sodium borohydride is quite energy dense, so it can be used to power aircraft.

Turkey’s future in hydrogen

The feasibility of Bandırma Hydrogen Valley is being assessed by multinational institutions. Morocco’s Mohammed VI Polytechnic University, a leading institution in the field of sustainable energy, has ratified the project. Presenting itself as a promising hub for sustainable energy, Bandırma Hydro Valley has attracted n €8 million investment from the EU. The Scientific and Technological Research Council of Turkey (TÜBİTAK) concluded the project’s credibility by funding it with more than €36 million.

HYSouthMarmara is Turkey’s highest-financed environmental project to date. Funds from multinational institutions indicate that Turkey has achieved a serious level of credibility and is becoming a trusted partner in carbon-free energy production. Turkey’s energy hub will also be an opportunity for countries seeking energy independence.

On July 1, 2023, Turkish engineers started the construction of Bandırma Hydrogen Valley. When HYSouthMarmara becomes operational, it will serve the interests of Turkey and other countries. As a decarbonization facility, it will also help Turkey diversify its industrial products. From drone batteries to jet fuel, green hydrogen can help Turkey become an energy exporter in the future, and, importantly, offers Turkey a future in which it can tackle both environmental and economic issues.

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old has long been considered a safe haven asset. Together with foreign exchange reserves and assets, it forms an integral part of a country’s reserves. Gold can facilitate trade, either in national currencies or in digital currencies. Moreover, wars, geopolitical tensions, financial crises, and high price volatility can all lead to increased demand for gold. However, recently, political impulses have played a relatively greater role than fundamental supply-demand or arbitrage dynamics.

Gold has recently been the main instrument of political revolt against the U.S.-dominated financial order. The dominance of the U.S. dollar is increasingly being challenged by gold and digital currencies as well as the growing trend to trade in national currencies. Many emerging or developing economies are building up their gold reserves. Even the BRICS countries are now working on a new gold-backed reserve currency.

Other key risk factors driving demand for this precious metal include, but are not limited to, rising geopolitical tensions in the South China Sea, the Middle East, South America, and the war in Ukraine. In addition, the tendency to avoid sanctions, the impulse to avoid other external influences, and the fact that the dollar’s role as an international reserve currency is increasingly being replaced by gold, the euro, and the renminbi all contribute to the same end. Moreover, rising interest rates and realized losses due to decreasing market value of the treasuries in reserves is also raising demand for gold reserves.

Despite rising interest rates, there is still a general increase in market demand for gold due to the risk of a banking crisis, geopolitical risks, and the financial turmoil. Gold should therefore continue to be used for hedging against catastrophic scenarios. For all these reasons, this most archaic—for some, even barbarous—instrument of trade and investment has today become a modern instrument of hedging and even of revolt against the financial hegemony of the U.S. dollar.

The rush to gold reserves

Central banks around the world are building up their gold reserves. In fact, these purchases are at one of their highest levels since the 1960s (Fig. 1). Central banks now account for almost a third of monthly gold demand. Meanwhile, most of these record purchases in 2022 were made by central banks of countries at odds with the West. Central banks are reducing their dollar and even euro reserves and replacing them with more and more gold.

Sizable gold imports are now a reality in most developing countries as they seek greater economic and financial independence. In this vein, a huge current account deficit challenge is also a certainty: exports are strong, but imports are even stronger. Energy and other commodity imports (such as gold) are massive in emerging markets. Thus, imports, energy, and broader commodity dependence have led to a new current account deficit spree.

As shown in Figure 1, according to the World Gold Council, gold purchases rose 152% year-on-year to a record 1,136 tonnes in 2022. This buying cycle is expected to continue this year. However, in order to keep gold reserves free from the direct influence or intervention of other major external powers, it is better to keep gold within one’s country.

Russia’s recent experience of increasing its gold reserves is a good example. Russia has been gradually increasing its reserves for a long time, doubling them to $640 bn in the last five years alone. Especially since the annexation of Crimea in 2014, Russia has consistently reduced its dollar-denominated reserves and has tripled its gold reserves.

Brazil and France are also well known for their criticism of over-reliance on the U.S. dollar for trade and financial transactions. Many experts believe that countries and companies alike are now too dependent on the U.S. dollar as their main currency. Some, such as French President Macron, have even called it a “sovereignty issue.” EU members such as Poland and Hungary, two of the largest Eastern European countries, have also recently increased their gold reserves.

Indeed, major continental European countries such as France, Germany, and Italy, already hold around 60% of their reserves in gold (Fig. 2). Many others are already accumulating huge amounts of these gold reserves. Turkey, Germany, and Russia (even China and Iran) are steadily increasing their precious metal reserves as an independent tool against the financial dominance of the U.S. dollar.

Perhaps a similar idea was behind the gold reserves that Turkey has built up or withdrawn from the UK and the U.S., especially in the last 10 years (Fig. 2). Thanks to its recent attempts, Turkey is currently pushing for a place among the top 10 countries in the world in terms of gold reserves (Fig. 3).

Turkey’s gold reserves

Turkey has been accumulating gold reserves for a long time, mainly, among other things, in response to rising geopolitical tensions and increasing efforts to pursue an independent policy. According to the World Gold Council, the Turkish Central Bank has been accumulating gold reserves in a continuous cycle for at least the past few years. Meanwhile, Turkey has also been withdrawing its gold reserves from the U.S. and the UK. Today, as the importance of this precious metal has begun to grow, the value of these initiatives is clear.

Reserves are rising fast. Turkey has increased its gold reserves by 148 tonnes in 2022 to a total of 542 tonnes by the end of 2022 according to data from the World Gold Council. They bought another 30 tonnes of gold reserves in 2023 and as of the first quarter of 2023, has a total of 572 tonnes. Nearly a third of all its reserves (34%) are gold. Central Bank of Turkey (CBRT) statistics from June 2023 show that the Turkish Central Bank had $67 billion in foreign exchange reserves and $41 billion in gold reserves.

However, an extraordinary sale of more than 130 tonnes of gold to meet domestic demand in the second quarter of 2023 should also be noted. Though, thanks to its recent bullion moves, Turkey is closer today (more than ever) to being among the top 10 countries in gold reserves (Figure 3). The withdrawal of gold reserves from abroad, on the other hand, had been on the agenda in Turkey since at least the 1960s; however, it held the potential to leave the country in deep political turmoil.

Other developing economies

The sanctions against Russia have surely led to great concerns about where to keep international reserves, especially among the central banks of countries that are not aligned with the West. The sanctions following the war in Ukraine froze almost $300 bn of Russian reserves held abroad. Russia was able to use its huge gold reserves even during the sanctions in 2022, but most other international reserves were frozen. If these reserves were in bullion and held at home, they would not have been affected by the sanctions.

Following the invasion of Crimea, Russia has made an even more assertive attempt to diversify its reserves and other countries may follow suit. This de-dollarization trend, or shift away from U.S. assets, could in turn have major implications for the role of the U.S. dollar, its value relative to gold and other currencies, and its impact on the global economy.

Another example is China, which has increased its gold reserves to more than 2,000 tonnes for the first time in history. India is the world’s number one gold buyer with Indian consumers accounting for almost 20% of global demand per annum. China, Russia, and India are building up huge gold reserves. Together, these BRICS economies are making no secret of their ambition to find an alternative to the currently dominant U.S. dollar and are even looking for a new gold-based global reserve currency.

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t the end of June, the World Bank Group approved a $1 billion financing package for the earthquake-hit region of Turkey as part of the total $1.8 billion in financial assistance agreed upon earlier. This part of the financing will focus on public services and rural housing. The World Bank, together with the Turkish Treasury and Finance Ministry, has also agreed on an additional new project worth $450 million for Turkish SMEs (small and medium enterprises) in the 11 provinces of the earthquake region.

Meanwhile, Turkey has already launched construction projects for more than 180,000 new houses in the earthquake-hit region. The first group of houses will be handed over by October 2023. Search and rescue operations in these 11 provinces of southern Turkey are long over. New shelters, safe longer-term housing, and reviving economic activity are the new challenges. Above all, new physical and financial investments are needed to rebuild all the damage.

The earthquakes, two back-to-back earthquakes of 7.7 and 7.6 magnitude, have undoubtedly led to a massive loss of wealth in Turkey, and now is the time to invest and rebuild that wealth. However, a thorough recovery that can be managed and sustained over the long term will require new infrastructure, housing, and investment in human and physical capital. And these efforts, of course, raise a new issue: finding new financing to repair the earthquake damage.

With an average value of $60 billion, the longer-term reconstruction cost estimate ranges from $45 billion to $80 billion. This amount mainly reflects the direct costs associated with the loss of growth, debris removal, reconstruction of buildings and homes, renovation, loss of labor and human capital, costs of infrastructure and public facilities, and loss of education and human capital. The range could be increased to $45-150 billion if secondary costs are taken into account.

Financing options

There are already many alternative financing options that can be used during the long reconstruction process. New avenues are opening up to fund reconstruction, including more promising green finance options, microcredit, new blockchain-based financing models, Initial Coin Offerings (ICOs), and more antiquated Islamic financial instruments in addition, among others, to attracting foreign direct investment, public subsidies, debt-based financing, and equity-based and non-equity crowdfunding options.

Meanwhile, even an ex-ante funding source (such as reserve funds) could also help to secure advance funding for disaster-related costs. However, they have relatively higher opportunity costs compared to ex-post financing instruments such as debt financing, taxation, or other forms of international support.

In addition, Turkey has a considerable economic cushion to respond to and finance the reconstruction effort. A stable budget and low debt-to-GDP ratios give the Turkish economy and government considerable room to implement new public financing initiatives. The low debt-to-GDP ratio (below 35%) provides more room for borrowing. The fiscal situation is also not dire due to soaring tax revenues in 2022 (an increase of almost 100%).

In addition to tax incentives and subsidies, government spending could also be used effectively. At the same time, public policies such as new taxes, such as tax increment financing or TIF, and government spending also help economies recover much faster (via the investment and demand effects). Finally, business continuity and the resilience of the financial sector are extremely important. New infrastructure investments, construction projects, support and subsidies for energy and agriculture, and the inflow of large amounts of foreign and domestic capital into the region could help boost local economies in the short to medium term.

However, domestic budgetary or cash resources won’t be enough and external mechanisms are therefore expected, including substantial financial and diplomatic assistance. The World Bank, for example, will be essential as a major international organization with extensive expertise in crisis management. In particular, the longer-term international financing possibilities offered by the World Bank, the Asian Development Bank (ADB), the Islamic Development Bank (IDB), and the European Bank for Reconstruction and Development (EBRD) could prove very helpful in the future.

In the meantime, when deciding which financing options to prioritize, less costly, less bureaucratic, and more liquid and direct options should probably be given priority. Emergency funds of multinational organizations, existing national or international emergency financial assistance funds, and insurance instruments could be used more effectively. Other instruments, such as bonds or loans, are longer-term and more bureaucratic options. In the future, the creation of a European emergency fund or possibly the Organization of Islamic Cooperation (OIC) emergency fund should also be considered.

Another example is contingent loans which are low-cost emergency loans from international institutions to disaster-stricken economies and are used effectively by international organizations such as the World Bank. Special earthquake bonds (a type of debt-based financing) and tax increment financing options could also provide much needed funds to local authorities. Debt-based financing methods such as Treasury Inflation-Protected Securities (TIPS) or pay-as-you-go options could be repaid with incremental taxes.

Alternative payment options are becoming increasingly popular in these uncertain and unsettling times. One such area of cross-border and peer-to-peer payments is the use of blockchain technologies and cryptocurrencies. Even when banking activities are suspended or temporarily banned, this tool still allows money to be transferred. Favorable, low-cost loans from international institutions, access to international Islamic finance fund options, and sukuk-type bonds could prove useful in financing reconstruction efforts. Earthquake or broader catastrophe bonds (CAT bonds) are also used effectively today in many international natural catastrophe cases.

The construction of physical infrastructure such as hospitals, roads, bridges, and schools, and electricity, water, gas, and sewage systems is likely to be financed by international organizations, including the World Bank. These examples could be backed by one-off taxes, bonds, and even central bank money. Earthquake insurance, specific earthquake taxes, personal savings and assets, private bank loans, NGO support, domestic public assistance (from the Ministry of Finance and other public agencies), and external funding (from international organizations and governments) are just a few examples of a world of institutional funding sources for post-earthquake reconstruction.

The inflow of financial capital, including aid and loans, strong fiscal figures, strong financial resilience, and low debt-to-GDP ratio could help Turkey’s reconstruction efforts. All these foreign capital inflows, financial support, new stimulus packages, housing reconstruction, new infrastructure investment, and restructuring of rehabilitated companies could subsequently boost economic activity and put an end to a potential economic downturn. However, the focus should be on efficient, timely, and less bureaucratic funding schemes.

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elations between the republics of Argentina and Turkey date back to the early 20th century when thousands of Ottoman subjects started migrating to Argentine territory. The family migratory chains, popularly (and wrongly) called Turcos (Turkish), were mainly Christian or Jewish (from what today would be the territory of Syria, Lebanon, and Palestine) and were composed of migrants who left the Ottoman Empire mostly in “irregular” ways.

The Ottoman Empire’s interest in keeping in touch with its nationals helped to establish the first bilateral relations. The economic aspect was secondary, to which the Argentine government paid more attention, and the focus was on people’s immigration and religion.

From the 1990s onwards, political and economic cooperation accelerated through the signing of a series of agreements: the Agreement on Economic and Trade Cooperation (1992), the Agreement on Visa Exemption (1992), the Agreement on Scientific-Technical Cooperation, the Air Services Agreement (2011) and the Agreement on Customs Cooperation and Mutual Assistance (2018), among others.

The increased political cooperation translated into growth in trade: Trade exchange between Argentina and Turkey grew 411% between 1992 and 2018. The maximum peak of the trade exchange was achieved in 2022, reaching $1.18 billion, with more than $711 million of Argentine exports. Although the trade exchange has grown in recent decades, it is still a very insignificant part of the total exports for both countries (Turkey represented 0.8% of Argentine exports in 2022, and Argentina represented less than 0.2% of Turkish exports in 2022).

In turn, the trend in trade with Turkey – as with the Middle East – mirrors the pattern of Argentina’s trade with developed countries: a preponderance of commodities or primary products with limited added value in exchange for industrial or manufactured goods.

Turkish Foreign Policy and the Global South

Turkey foreign policy has been linked to regional and global dynamics in recent decades, such as the various conflicts bordering its territory (Syria, Libya, Nagorno-Karabakh, and now Ukraine) or the Russo-Western tensions in the broader Black Sea region that have turned Turkish foreign policy into a more assertive one, anchored in regional power and national security.

Additionally, the Turkish presence has become increasingly global, especially in the Global South. In the last decade, Turkey’s neighborhood has been embroiled in cumulative turbulence, including active armed conflicts in Iraq, Syria and Nagorno-Karabakh, and Moscow’s annexation of the Crimean Peninsula, and the competition for advantage in terms of maritime delimitation and energy resources in the eastern Mediterranean.

As a central example, Turkey’s relationship and interest in Latin America hit its peak in the 2010s through the growth of trade and the use of Turkish soft power. As part of the Global South, Latin America still holds a place in Turkish foreign policy since this relationship is aligned with Turkey’s rhetoric of independence in international relations, national self-sufficiency, exploration of economic opportunities, and national security.

Within this juncture, Argentina (for economic opportunities) and Turkey (for autonomy and national interests) launched the satellite cooperation project in 2019 between Investigaciones Aplicadas Sociedad del Estado (INVAP, the Applied Research State Company), a company owned by the Province of Río Negro of Argentina, and Turkish Aerospace Industries (TAI, a Turkish state-owned company) through the creation of a joint venture called GSATCOM.

The Turkey-Argentina venture’s main objective or goal is the construction of a Geosynchronous Equatorial Orbit (GEO), “à la carte, with a modular and scalable design”: a high-throughput satellite (HTS), with all-electric propulsion and reconfigurable, onboard equipment to adjust to market demands, and the capacity to be adapted to the whole range of existing launchers.

The antennas of these satellites with ion engines can be redirected with a very low loss of efficiency and their onboard signals can be digitized for retransmission. Flexible loading allows the satellite to have a useful life of 15 years at a significantly lower cost; therefore, it can adapt to market changes.

In this regard, tasks were allocated according to the strengths of each company: INVAP is in charge of leading the development of the communications system, while TAI is in charge of the structure and thermal subsystem. This first jointly produced GEO satellite is scheduled to be ready by 2024, according to official information. The project suffered some delays (completion was originally estimated for 2021) due to the COVID-19 global pandemic and Argentina’s budgetary restrictions.

What does the GEO joint satellite cooperation between Turkey and Argentina project demonstrate? Granted, the relationship between the two countries in political terms was –and still is – not optimal, with ups and downs mainly due to an Armenian diaspora lobbying against Turkey and blocking Argentina from developing relations further, and the bilateral relationship lacking an important commercial exchange. Yet, it was possible to develop this joint project because the two companies, with similar origins of being created by their national states and with similar objectives, have shown sound development and are constantly searching for technological innovation and commercial opportunities, which played instrumental roles in achieving this collaboration.

An industrial infrastructure

Yet, it was possible to develop this joint project because the two companies, with similar origins of being created by their national states and with similar objectives, have shown sound development and are constantly searching for technological innovation and commercial opportunities, which played instrumental roles in achieving this collaboration.

In addition, after the end of the Cold War, both Turkey and Argentina developed an industrial infrastructure and a sizable scientific-technological complex despite struggling with constant economic crises. However, unlike in the past, Argentina, through the INVAP, was the one that took the initiative and studied the whole satellite chain for market niches.

In Latin America, Argentina has one of the biggest developed industrial-scientific complexes. For example, Argentina has three Nobel Prizes in Science (for instance, Brazil, which is five times bigger in terms of population, has none). It’s quite surprising that a country like Argentina’s has nuclear, satellite, and aerospace capabilities when most of Latin America mainly depends on natural resources for their economies. 

Once it found an opportunity, Argentina searched for several years for a partner and found TAI. Once the talks between the two companies began in 2017, they successfully established the joint venture in 2019, including the public-private collaboration to achieve the objective. As Gonzalez Levaggi and Blinder point out, “Having differing motivations (referring to Argentina and Turkey) does not mean that cooperation is unachievable.”

This case of South-North cooperation, in which Argentina and Turkey develop their potential to climb the ladder of technological innovation, is a good example of a foreign policy emphasizing developing autonomous capabilities. In other words, it is a policy that widens the margins for developing countries to navigate an increasingly uncertain international sphere.

T

urkey’s President Recep Tayyip Erdoğan expressed his jubilation as he declared the commencement of the “Century of Turkey” during his inauguration speech on April 4. Employing the metaphor of the “New Red Apple,” Erdoğan described the current era as one of conquest, proclaiming that the “doors of our country’s growth have been opened.”

With the centennial of the Turkish Republic approaching on October 29, 2023 the AK Party (Justice and Development Party) government has unveiled an ambitious vision for the nation’s future. Throughout his election campaign, the recently re-elected president emphasized his 2023 vision and showcased projects initiated in alignment with the “Century of Turkey” plan.

This comprehensive vision comprises 17 principles encompassing sustainability, science, technology, peace, stability, and power, constructing a future-oriented perspective that fosters proactive transformation both domestically and internationally. To gain a deeper understanding of this plan, let us explore the “Century of Turkey” through President Erdoğan’s statements.

The vision was initially presented by Erdoğan on October 28, 2022, during an address to a crowd in Ankara. In his speech, Erdoğan expressed the desire for a robust start to the new century of the Turkish Republic with the “Century of Turkey.” He stated, “At a time when the world is facing vital challenges, we want to make our country one of the 10 largest states globally in all fields of politics, economy, technology, military, and diplomacy.”

Economic revival takes precedence in the agenda

During his first cabinet meeting, President Erdoğan outlined three primary goals for the early stages of the “Century of Turkey”: reducing inflation to single digits, facilitating the voluntary and dignified return of refugees, and contributing to global peace through an enterprising and active foreign policy.

Addressing Turkey’s economic challenges emerges as Erdoğan’s top priority. To tackle the persistent high inflation rate, currently at 39.59%, he appointed former deputy prime minister Mehmet Şimsek as the minister of treasury and finance. Şimsek’s international stature reassures both domestic and global stakeholders.

The appointment of Hafize Gaye Erkan, who held prominent positions in the banking sector in the United States, as the head of the Central Bank of Turkey, has also garnered attention. After years of pursuing a low-interest rate policy, Erkan’s appointment signifies a move towards normalization in the eyes of the markets.

Emphasis on a stronger and stable Turkey

Underlining that the Republic has not been able to live in peace within itself for a significant part of its century-long history, President Erdoğan remarked, “The calculations of imperialists on our country have never been lacking. The pawns used in these dirty calculations have never been lacking either. It was the same yesterday and it is the same today. Instead of relying on the supremacy of the national will, our country has wasted golden years in the hands of governments that remained under the guidance of the forces of tutelage.”

Erdoğan stressed that Turkey has now become a stronger nation capable of withstanding threats from both domestic and foreign actors. He asserted, “They did everything to strip us of these lands. They tried to do so sometimes by coming here in person and sometimes by using their pawns. We, as the nation, liberated our homeland in the War of Independence and shouted once again to the whole world that we would never accept slavery. Lastly, they attempted to invade our homeland by making the traitors within attack us on the night of July 15. We stopped it, as well, in solidarity with our people.”

“Let us face east and west – but, most importantly, the truth.”

Another priority of the “Century of Turkey” vision marks a turning point in Turkish foreign policy: adopting a more proactive and multipolar perspective rooted in compassion. Erdoğan pledged to strengthen Turkey’s diplomatic hand around the world. He noted that “the international community will see a Turkey that takes more initiative in solving global crises, strives more for the establishment of peace and stability in its region, works harder for the development of the Turkish and Islamic world, and protects the oppressed and victims.” The “Century of Turkey” envisions a revolution that will bring democracy, development, peace, and welfare to every corner of the world. Hakan Fidan, who was the head of the National Intelligence Organization (MIT) since 2010, was appointed as the new foreign minister.

Full-scale fight against terrorism

The scope of Turkey’s counterterrorism vision is expanded in the “Century of Turkey” plan. Erdoğan promised determination to eliminate terrorist elements saying that interlocutors would find a determined, braver, more compassionate, and more active Turkey that fights terrorist organizations inside and outside its borders more decisively. “They stalled us with terror for years. They wasted our resources and energy for years. They stole away our children’s future, the light in their eyes and the hope in their hearts. They worked to raise walls of blood and tears in the way of our people. They tried to undermine our eternal fraternity by setting Turks and Kurds against one another…” He went on to add, “The separatist terrorist organization is a dagger with which the imperialists stabbed our country in the back in order to spill our blood and weaken us.”

Transitioning from a coup d’état-drafted to a libertarian constitution

In his speech at the Presidential Inauguration Ceremony, President Erdoğan said, “We will strengthen our democracy with a libertarian, civilian, and inclusive constitution by getting rid of the current constitution, which is a product of a coup. We will continue to make our country grow through investment, employment, production, exports, and current account surplus. We are determined to put Gazi Mustafa Kemal’s principle of ‘Peace at Home, Peace in the World’ into practice in its true meaning.”

With the launch of the “Century of Turkey,” President Erdoğan aims to propel Turkey towards a transformative future, characterized by progress, development, and global engagement. The vision encompasses various aspects, including foreign policy, counterterrorism efforts, constitutional reforms, and economic improvements. As Turkey celebrates the 100th anniversary of its Republic, the “Century of Turkey” represents a significant milestone in the nation’s history, setting the stage for a new era of growth and influence.

W

hile the long-term effects of climate change continue, the COVID-19 epidemic, which spread at the end of 2019 and continued for almost two years, and the Ukraine-Russia war that followed, have had significant negative effects on agriculture and food security. While these negative effects were gradually decreasing across the world, Turkey was shaken by two devastating earthquakes in the middle of winter. So much so that a “level 4” alarm and an international call for help was made to tackle their effects. In response to this call, aid offers were received from 100 countries, and around 80 countries participated or contributed to the search and rescue efforts with approximately 7,000 personnel.

The first of the earthquakes occurred at 04:17 on Monday, February 6, 2023, with a magnitude of 7.7, centered in the town of Pazarcık in Kahramanmaraş province. The second earthquake occurred on the same day at 13:24, centered in the town of Elbistan of the same province, with a magnitude of 7.6 and 80.2 km from the epicenter of the first earthquake. The most important feature of these earthquakes was that they were very close to the surface at a depth of 8.6 and 7.0 km, respectively, in addition to their magnitude.

Unlike other big earthquakes that have occurred across the world, the fact that these two earthquakes occurred at a depth very close to the Earth’s surface increased their destructiveness and caused the Anatolian peninsula to shift 3 meters to the west. The many images reflected in the media in the form of massive crevices and collapses in the fields reveal the possible effects of the earthquake on agriculture.

Possible effects of earthquakes on agriculture

Depending on their magnitude, earthquakes can have different effects such as delays and pauses in agricultural activities, as well as damage to production resources and difficulty in reaching them. Landslides, and cracks and breaks in agricultural lands caused by earthquakes make it difficult and even prevent the use of agricultural lands. In addition, agricultural irrigation systems, in other words agricultural structures such as irrigation channels and pipes, may be damaged. Migration due to the effects of earthquakes may also hinder agricultural production.

On the other hand, earthquakes have negative effects on crop and animal production activities as well. These may be in the form of delays or inability to carry out agricultural production activities, as well as loss of product, stored input, and livestock. Slips and collapses can make harvesting difficult or even impossible, and cause harvest losses. There may also be a shortage of feed due to the fact that the animal feeds are under the rubble. Crop and animal production processes that need energy can cause losses due to long-term power cuts and lack of fuel.

Decreases in the quantity and quality of crop and animal production, which may occur due to negative effects of earthquakes on agriculture, may increase prices. Disruptions that may occur in many stages of the food supply chain, such as transportation, storage, processing, and wholesale and retail trade, may cause loss of agricultural products and increase food prices. These developments may trigger food inflation and then general inflation.

The importance of the earthquake zone in Turkey’s agriculture 

Each of the eleven provinces affected by the earthquake has a high agricultural potential. Approximately 15 percent of the total agricultural land in Turkey, that is, 3.6 million hectares of 23.9 million hectares of total land, is located in the earthquake zone, primarily Şanlıurfa, Diyarbakır, and Adana. The number of registered agricultural enterprises and farmers in the earthquake area is around 270,000. The earthquake area accounts for about 20 percent of the total crop production in Turkey, and about 15 percent of Turkey’s livestock.

The eleven provinces affected by the earthquakes have 2.6 million hectares of field crops containing cereals and other crop products, representing 15.5 percent of Turkey’s crop production. Vegetable production areas in the earthquake zone amount to 15.2 percent of Turkey’s vegetable production area with 110,000 hectares. The eleven provinces in the earthquake zone produce 25 percent of Turkey’s fruit, beverages, and spices with planting areas of 930 million hectares. Şanlıurfa, Diyarbakır, and Adana are at the forefront in field crops, Adana and Hatay in vegetables, and Gaziantep in fruit.

On the other hand, approximately 20 percent of Turkey’s exports of agricultural and forestry products come from the earthquake zone. More than half of the agricultural exports of the earthquake region are from Gaziantep. While the eleven provinces affected by the earthquake have a rate of approximately 9 percent in Turkey’s gross domestic product, their share of the gross domestic product of the agricultural sector is 14.3 percent. These figures show that the income of the earthquake region is predominantly from agriculture.

The effects of the earthquake on agriculture and food security

According to the latest figures, the earthquake caused approximately 45,000 deaths, while we do not have clear figures on deaths in rural areas. It has been stated that there were significant casualties in many rural areas and villages, and this varies from one province to another. The significant loss of life in the elderly population, which is predominantly in rural areas and villages, may lead to a further decrease in the population engaged in agriculture, which is already inadequate, and to interruption of agricultural activities. Those who have lost their relatives may not be able to work efficiently for a while due to psychological difficulties. In addition to loss of life, migrations in rural areas might have occurred as a result of grievances and hardship.

The collapse of barns and other buildings besides houses in rural areas has also led to loss of livestock; damage to machinery, equipment, and tools; has reduced inputs such as seed and feed; and caused loss of quality of seed and feed. Therefore, there may be temporary problems in the use of tractors, machinery, and equipment, and regarding the adequacy of feed and seed. There may be difficulties in the supply of inputs such as diesel, fertilizer, seeds, and pesticides used in agricultural production, which will start gradually in March, and thus, there may be disruptions in crop production. The difficulties that arise in the transportation, processing, packaging, storage, and wholesale and retail trade stages of the food value chain, along with the losses of agricultural and food products caused by the massive destruction in cities will affect food security.

Since the earthquake did not occur during the cropping period, there is no loss due to slides and collapses in the fields or disruption of production processes such as planting, hoeing, and harvesting. From this point of view, the decrease in agricultural products and thus increase in food prices may be limited, as there will be no reduction in production except livestock losses and damage to the products in the warehouses. If the measures that need to be taken for the next production period are not implemented effectively, this might decrease production and trigger food inflation resulting from the disruption of production processes in the region with approximately 15 percent agricultural potential.

Turkey has played a very important role in reining in the repercussions of the Russia-Ukraine war, which has been on the world agenda for a year now. One of Ankara’s main objectives will be the extension of the Black Sea Grain Corridor Initiative, which will expire in March. Turkey engaged in long negotiations with Russia for the initiative, which was extended for a period of 120 days in December 2022. Depending on the results of the efforts by Turkey, which acts as a mediator between the parties and takes an active part in the solution of the global food crisis, in the post-earthquake period, the world food supply security may also be affected by the earthquake.

Agricultural support for the earthquake zone         

Similar to the cities, facilities such as tents, containers, and temporary houses provided for those living in the region’s rural areas will ensure that farmers and their families whose houses are uninhabitable will stay in their villages. Other than housing aid, which will improve living and working conditions, other aid will ensure farmers do not leave the countryside and stay in their villages, thus preventing the interruption of agricultural activities. In this context, in addition to public aid, the aid of non-governmental organizations, the public, and the international community has fulfilled an important function and will continue to do so. In addition, emergency aid such as government support of 15,000 TL for each of the earthquake victims and the declared agricultural support are of great importance. In addition to this short-term and temporary emergency support, it is essential that a long-term, permanent rural transformation that will improve the working and living conditions in the countryside is planned and implemented as soon as possible.

The Turkish government has declared that the farmers engaged in animal husbandry in the eleven provinces affected by the earthquake will be compensated in kind. In this respect, the Ministry of Agriculture and Forestry will supply free of charge bovine and ovine breeders with the same number of cattle and small ruminant animals as those lost, poultry breeders with the same number as their lost poultry, and beekeepers will receive the same number of hives as those damaged in the earthquake. Meanwhile the presidential decision of providing feed support per animal to cattle and small ruminant animal breeders in the provinces damaged by the earthquake until the end of 2023 entered into force. On the other hand, the urgent sugar need for the 1,483,000 hives of 12,000 beekeepers in the eleven provinces will be met immediately.

For the farmers registered in the Farmer Registration System (ÇKS) in the eleven provinces declared as disaster areas, diesel and fertilizer support payments for the 2022 production year will be made immediately in cash. For the farmers who lost their lives in the earthquakes, the support payments will be paid in cash to their legal heirs if they apply to Ziraat Bank. The Turkish Grain Board (TMO) also announced that the products in the licensed warehouses damaged by the earthquake are insured and that the farmers who are in the earthquake zone and registered with the ÇKS can sell their grain and pulses products to TMO without any type or quota limit.

C

ould earthquakes, including those in Turkey, lead to a new course of revivification and revitalization?

Scientists and economists alike seem to agree on the short-term negative economic impacts of natural disasters such as earthquakes. However, the longer-term reflections are not clear since the long-term growth and GDP impacts could even be positive as disaster-hit regions usually grow faster in order to catch up with other regions. National and international support further facilitate this process.

Extensive literature also demonstrates that new investments, government expenditures, and other support packages may lead to significant long-term positive effects on the GDP. For example, literature shows that while the short-term impacts of big natural disasters could be negative (-0.9 percent on average), the longer-term effects turn positive (0.6 percent on average).

During the next few months, we predict a negative effect on Turkey due to the recent disaster along its southern borders, but this will be limited and manageable. Starting from the second half of 2023, economic activity should recover and growth should once again gain momentum.

Ten percent of the Turkish economy affected

A better picture of this regeneration course is only possible through a snapshot of the regional economy. TÜİK (Turkish Statistical Institute) data shows that around 14 million people, more than 16 percent of the population, have been adversely affected by the recent earthquakes. The earthquake hit regional economy is predominantly dependent on the food, agriculture, steel production, energy, cement, textile, and clothing industries.

This eleven earthquake-stricken provinces have a relatively smaller GDP per capita, specifically about two-thirds of the national average. However, they represent a little less than one percent of the growth figure in Turkey, according to TÜİK. These GDP contributions are not expected to drop to nothing right away but should decelerate significantly.

Meanwhile, the hardest-hit Turkish provinces constitute 10 percent of the Turkish economy with Gaziantep, Adana, and Hatay being the three biggest economies of the 11. Fifteen percent of total agricultural production, 11 percent of industrial production, and 11 percent of manufacturing production are based in these 11 provinces.

All together the exports of the 11 provinces are about nine percent of the total Turkish exports while 21 percent of Turkey’s crop production, 12 percent of grain and other crops, 17 percent of farmable land, 12 percent of cattle, and 16 percent of small livestock can be found in these 11 provinces.

However, the physical construction cost alone is estimated to be as low as $15-$30 billion. This is, of course, assuming the land is provided by the Turkish Treasury or that it belongs to the existing landlords.

The dynamic Turkish economy, national and international financial support, strong fundamentals, and the economic structure of the region are all likely to mitigate the negative impacts. For example, investment bank Goldman Sachs, the World Bank and IMF have all predicted a minimum impact to the GDP and growth figures.

Goldman Sachs cites an earlier paper showing a 1.2 percent effect on the Turkish economy following the 1999 Marmara earthquake, and reasons that the impact of the latest earthquake could be much more limited. It should be kept in mind that the Marmara and Düzce earthquakes of 1999 affected an area corresponding to almost 35 percent of the Turkish GDP and 47 percent of the industrial production at the time.

Like these institutions, we, too, do not expect effects similar in scale to the 1999 earthquake. The earthquake struck southern Turkey this time is not in the industrial heartland, and therefore, economic costs, financial, fiscal, trade, inflationary and growth reflections should all be limited.

Potential positive repercussions

Despite all the negative implications, for example, the capital stock damages due to the tremblor do not show up in the national GDP; however, new (public and private) investments to rebuilt the capital stock are part of the GDP, making this a positive post-earthquake investment effect. Ta (2022) demonstrates empirical evidence that post-earthquake firm investments could increase by more than 2 percent and that the real economic growth would also be relatively higher.

There is also another line of research that discusses the positive “creative destruction” impacts following natural disasters. These destructive disasters, the literature underlines, can lead to new technologies, higher productivity, and hence much higher growth rates in the disaster-hit areas. Xiao’s (2011) “correction impact” argument, in particular, is noteworthy at this point.

In certain cases where the Keynesian multiplier of expenditures is proven relatively higher – as in dynamic economies such as Turkey – shortly after the disasters, the national GDP could actually revive rather than contract as a result of rising expenditures and the demand effect.

Natural disasters could also lead to higher labor supply and more incentive to work longer hours, in an effort to maintain the quality of life or standards of living. This, in return, would lead to higher output or production effect. The demand would also bounce back, and the resulting profit opportunities would increase production as well.

The reconstruction and new investment efforts by public institutions and the private sector can further boost economic activity. Foreign capital inflow, financial support, new public incentives, government expenditure to rebuilt houses, new infrastructure investment, and business incentives could all boost economic activity and end economic stagnation.

Experience and resilience

Turkey has already created a resilient economy and a strong infrastructure to deal with such catastrophes. The dynamic Turkish economy will likely recover from the devastation of these earthquakes quickly. And most importantly – at least theoretically – Turkey has also learned its lesson from the 1999 Marmara earthquake.

Turkey has extensive experience in dealing with natural disasters, including earthquakes. Raschky (2008) has shown that the latter matters as institutional quality and practical experiences are extremely important in mitigating the disaster costs. Earlier wildfires, floods, and other disasters as well as regional wars, climate change, and the long-standing PKK terror attacks have all been dealt with thanks to Turkey’s strong institutional structures, its dynamic economy, and strong social and human capital.

Transportation infrastructure including highways, airports, railways, and seaports that connect earthquake-hit cities to the rest of the country and to the world should be renovated soon. Bilateral and multilateral agreements with international and national financial institutions should be signed to ensure funding for regional and local producers, and the commercial entities. The most critical issue here is probably financing the regional infrastructure. Medium-to-longer-term financing options are pivotal for these types of physical investments.

Infrastructure investments, the construction sector, energy, and agricultural subsidies along with a huge external and domestic capital inflow towards this region could help boost the regional economy in the short-to-medium run. Rebuilding these cities, and reactivating the regional economy and its potential may also lead to longer-term higher multiplier effects for the national economy.

T

echnology has always been a determining factor of state power and their position in the international arena. While it has an immense impact on a state’s economy, technological development is directly translated into military power as well. Within this framework, one can argue that the United States becoming the sole superpower after the Cold War is primarily the result of the technological monopoly it created. This gave the U.S. the opportunity to create an international system based on so-called liberal values, which indeed were used and best served American and Western interests.

Most of the states were obliged to act in accordance with the U.S. system due to their technological dependence on the United States. Considering the unfair and unstable international conjecture of our times, technological development has become an imperative for states that aim to make their voice heard. Turkey has emerged as a leading state within this group: not only does it intend to increase its role in the international arena by taking advantage of this technological revolution, but most importantly, it aims to bring an end to the technological monopoly that has given rise to an unjust world.

Within this perspective, Turkey has conceptualized its efforts into the “National Technological Move” vision, which was officially announced in 2019. For many years, internal and external restraining factors affecting its position in the international arena hampered Turkey’s development and adversely affected the confidence of its people in the state’s capacity. In addition to the breakthroughs of Vecihi Hürkuş and Nuri Demirağ, examples such as Devrim Otomobili showed how national and domestic initiatives were stopped or blocked. However, in the last decade, overcoming the holding factors and paving the way for national technological initiatives have been the driving forces of Turkey’s national policies.

Breakthroughs that should not be forgotten

Even though the “National Technological Move” was officially announced in 2019, the roots of technological development in Turkey go way back to the beginning of the 1920s. The first example is Vecihi Hürküş who dreamt of nationalizing the Turkish aviation forces. Hürküş was able to develop the first Turkish airplane known as “Vecihi K-VI” in 1924. At that time, instead of being encouraged, Hürküş was sentenced to prison as the flight didn’t have an official permission. Later on, Hürküş founded the Vecihi Civil Aircraft Schools, the first Turkish aviation school which following a lack of support and funding closed.

Nuri Demirdağ is another example where contemporary external and internal forces in Turkey prevented the development of indigenous technology. Demirdağ was one of first figures in Turkey who emphasized the importance of domestic, national, and original production – the main pillars of today’s “National Technological Move” vision. In 1936, Demirağ supported the development and production of an indigenous aircraft, known as “NU D-36.” However, Demirdağ’s aircraft not only was not used in Turkey but the government at the time prohibited its export.

Similarly, due to the lack of support from the government, the project of Devrim Otomobili, the first Turkish-made car, didn’t continue and another domestic production was laid aside.

The evolution of the “National Technological Move” 

Not able to rely on its domestic production, Turkey has been compelled to be dependent on foreign technologies and products. However, while in the short term, foreign technologies and products have at some point served the interest of Ankara, in the long term, they are inefficient and restrictive. Indeed, being depended on foreign assets, impeded Turkey from developing and producing critical technologies, and the country was unable to follow policies in accordance with its national interests. Specifically, the dependency on other states, especially the U.S., has in many cases negatively impacted Turkey’s foreign policy. Johnson’s letter of 1964 and the embargo imposed on Turkey after the Cyprus Peace Operation in 1974 are cases in point.

Indeed, these two examples can be seen as the beginning of the “National Technological Move” vision. At that time, the Turkish administration experienced in the clearest way how being dependent on American technology posed a danger to its national interests and, therefore, a change in mentality was needed. Yet, the political changes didn’t occur until the late 1990s and early 2000s. Specifically, the Turkish governments at that time, aiming to achieve independence from external actors especially in the defense sector, took decisions that would support the development of national projects. These decisions are seen as the starting point of several successful national projects today such as the Bayraktar TB2 UAV, the MİLGEM warship, or the ATAK helicopter.

Alongside the defense sector, the mentality of national and domestic production is to be implemented in other sectors as well. The “National Energy and Mining Policy” laid out in 2017 was a manifestation of the policies that aimed at independence from external actors by bringing to the fore the need for self-sufficiency.

As the discussions of Turkey’s technological vision gained impetus, the Ministry of Industry and Technology took an important step by publishing the “2023 Industry and Technology Strategy” in September 2019, in which the term “National Technology Move” was officially announced for the first time. Specifically, the “National Technology Move” was built on the foundations of “domestic, national and original,” through which Turkey aims to become one of the technologically developed states on the international scene.

The political meaning of the “National Technological Move”

Challenging the technological monopoly of other powers and strengthening Ankara’s independence from external actors by following self-sufficient policies lie at the core of Turkey’s “National Technological Move” vision.

For many years, the U.S. has been the dominant actor in terms of technological innovations. Nevertheless, lately, there is a rivalry of great powers between the U.S. and China. Technology has been at the heart of this competition, considering the great impact of technology on economic development, and the position of states in the international system. While the U.S. is trying to maintain its monopoly, China has clearly stated its ambition to leapfrog the U.S. in technological developments.

This has paved the way for a possible decoupling between the great powers which has a profound impact on the other states and the international system itself. As these developments go on, other powers, such as Turkey, are trying to create opportunities so as in the future they are not obliged to either follow or be dependent on one technological power, or to be compelled to choose between two powers, in this case the U.S. and China.

By doing so, Turkey aims to enter the game as a power in and of itself, minimizing its dependency on other actors which would limit its power, as we have witnessed in the past. To achieve this, Turkey has been urging technological self-sufficiency, a policy followed by many states, for example, China and the U.S. in terms of chip production.

As a result, Ankara is aiming to benefit the most from the current Fourth Industrial Revolution though the “National Technological Move” vision. Without doubt this will give Turkey the possibility to emerge as an important regional and global power in the future. While powers like the U.S. and China are engaging in continuous competitiveness, it is an essential prerequisite for Turkey to depend on its own capabilities. Only if Turkey is successful in these steps, will it be able to follow independent and autonomous policies with its national interest at their core.

I

nternational student programs play an important role in international politics as part of public diplomacy. International students have the opportunity to closely observe the cultural environments of host countries. Upon graduation, they receive the title of “voluntary ambassadors” and maintain sympathetic ties with the host country. Countries that have focused on international student programs attach great importance to international graduates for creating economic bonds, technology transfer, and academic cooperation.

Although, especially since the 1990s, Turkey has started giving more importance to its international student policy, systematic and strategic practices in this field were designed after 2010. With the initiation of the Türkiye Scholarships program of the Presidency for Turks Abroad and Related Communities (YTB), which is a very inclusive grant brand for international students, and the new regulations introduced by the Higher Education Council, the number of international students in Turkey increased significantly. The growth in the number of universities and the development of infrastructure also played a role. Today, the number of international students in Turkey has exceeded 200,000.

Now, the question is, “What is the situation with international graduates?” Universities have newly developed alumni programs, which are related to increasing awareness and policy developments about international students. Indeed, most of the Turkish universities consider international alumni within the scope of their general alumni programs. Only a few universities offer programs and activities specific to international alumni mainly including alumni reunions abroad, mentorship programs, and internship and recruitment schemes.

The Türkiye Alumni Program as a new brand of foreign policy

The most comprehensive initiative targeting international graduates is carried out by the YTB, which is the responsible government body by law in this field. The YTB, which started the first efforts regarding international alumni in 2014, launched a special program entitled “Türkiye Alumni Program” in 2017. “Türkiye Again: Great Alumni Meeting” was held in the same year with the participation of 1,000 international graduates. In order to carry out these efforts in a systematic way, the Türkiye Alumni Coordinatorship was established in 2018 within the YTB.

Thanks to the alumni pool that has expanded since then and new programs to strengthen communication with alumni, Turkey has come a long way in a short time. The YTB will host another big gathering of Turkey alumni at Türkiye Alumni Forum, to be held on January 19-20, 2023, in İstanbul, where alumni with outstanding achievements from different sectors will discuss topics from technological transformations to global economy, and climate crisis to cultural heritage.

The Türkiye Alumni Program defines international graduates as “those who have completed at least one level in secondary and higher education institutions in Turkey and/or have obtained a C1 level Turkish language certificate accepted by higher education institutions in Turkey.”

Türkiye Alumni Awards

The Türkiye Alumni Awards is one of the most important activities carried out with the aim of strengthening the Türkiye alumni brand. Graduates who have demonstrated significant achievements in their fields are awarded in five categories: scientific and academic studies, economics and entrepreneurship, journalism and media, art and sports, and lifetime honors. The award winners, selected among thousands of graduates nominated every year, are announced to the national and international public at award ceremonies held in Turkey.

The efforts of Turkey to strengthen cooperation with alumni are certainly not one-sided. Alumni have also developed initiatives to strengthen relations between Turkey and their homelands. International graduates of Turkey have institutionalized among themselves and established 34 alumni associations, platforms, or groups in 30 countries. These efforts have become an important stage for the graduates to enhance relations between Turkey and their countries through concrete projects.

Alumni associations have started to develop collaborations that will lay the groundwork for the joint work of their countries and Turkish institutions. Alumni associations both contribute to the work of Turkish missions in the relevant countries and play a supporting role in the positive image of Turkey. In addition, they carry out various projects such as bringing people from different sectors together, expanding business networks, developing commercial activities, and promoting Turkish culture. Alumni associations have benefited from the support of YTB programs in more than 100 projects to this day.

Undoubtedly, one of the areas that will benefit the most from all these cooperation efforts is economic relations. Turkey graduates contribute more than expected to the development of economic relations between Turkey and their homelands. In recent years, Turkey has made progress in areas such as manufacturing and logistics, and graduates have a substantial share of export figures. The total foreign trade volume of the 113 Turkish graduate businesspeople, according to a recent unpublished report titled “Contribution of Turkey Graduate Businesspeople to Economic Relations,” was calculated as $345 million in 2021.

Ninety-three of these 113 businesspeople reported their import figures from Turkey as $153 million in 2021. Similar field studies in different countries, can reveal clearer figures on a sectoral basis. Considering the investment made by Turkey in the international student mobility sector, graduates contribute to the Turkish economy far more than expected. With the progress of the current international student and alumni policies, a bright future built on solid economic foundations by both Turkey and its fellow countries does not seem far away.

T

he net minimum wage in Turkey will be raised to TRY 8,506 or USD 455 in today’s exchange rate. Gross minimum wage, on the other hand, will rise to USD 536 (corresponding to TRY 10,008). This is the highest minimum wage in the history of the modern Turkish Republic, both in Turkish lira and the U.S. dollars.

This wage floor surge also corresponds to a cumulative 100 percent increase in the past one year, as opposed to the year-end 65 percent expected inflation by the Turkish Central Bank. The new minimum wage is above the hunger threshold set by TÜRK-İŞ, the confederation of Turkish trade unions, and above the official market expectation of close to TRY 8,000.

Overall, with the current record rise of 55 percent, the minimum wage has gone up from TRY 184 in 2001 to TRY 8,506 (46 times the initial value) in the past 20-22 years. In U.S. dollar-denominated terms, the minimum wage is up by 430 percent.

Meanwhile, for a more realistic comparison, the U.S. dollar inflation and cross-country price differences should also be taken into account. Minimum wages in real dollar terms and USD Purchasing Power Parties (PPP ) are also provided in the figure above (Figure 1). They also confirm the rising PPP-based, real U.S. dollar terms of minimum wages in Turkey.

Asymmetric income flow

Even at its current all-time high, the minimum wage adjustment itself is clearly not sufficient to enhance the standards of living. Minimum wage to average or median wage ratios is over 70 percent nowadays, and they need to be decreased to the modern world averages of 40 to 50 percentage points.

Moreover, the ratio of laborers that are paid somewhere close to the minimum wage is around 38 percent in Turkey, or more than 7 million employees. This statistic needs to be decreased to somewhere close to 10 percent, closer to its modern western and OECD averages. That said, it is of course not the Turkish government to blame for these disruptive figures which are more related to the long-skewed dynamics of the Turkish economy and its real sector.

Another example of the skewed and distorted income equality in Turkey is the fact that in 2011, on average, wages and salaries were 21 percent of the total cost in the balance sheet of an average company. In the manufacturing sector that figure was down to 15 percent. In 2020, the year which saw the outbreak of the COVID-19 pandemic, the share was further down to 9 percent of total costs.

As of 2022, on the other hand, these figures are down to a few percentage points for some major businesses in Turkey. That is, indeed, part of the reason why the 2022 income flows are surging for companies in Turkey. As a result, profits and dividend expectations are also rising, which in return increases demand and prices of stocks.

For some major Turkish companies, before tax profits are up from 5-7 percentage points to 9-10 in the past five years. In some sectors in Turkey, 2022 profits are even up by 400 percent. Banking is just one recent popular example. While the share of wages and income for employees is hovering around 26 percent of national income, companies are enjoying somewhere close to 55 percent of the total national income.

The pandemic of 2020 was a breaking point for this figure, as just before 2020, the labor share was above 30 percent and company shares were below 50 percent of the national income. Right before the coup attempt in 2016, business shares were even down to almost 42 percent, while back then labor stood at almost 32 percent of the national income.

Does a higher minimum wage really work?

However, the true question is whether a higher minimum wage really works. There is, after all, a general public and theory-based academic perception that minimum wages don’t actually work, and that they could even lead to unemployment or inflation, as critics argue some companies won’t be able to pay those higher wages.

And, of course, then there are also these two popular neoclassical criticisms: that higher minimum wages will raise price levels and increase unemployment. So, is there any truth to these claims? Does the existence of a minimum wage really lead to unemployment? Or, should the market decide on wages and payments?

Theoretical and ad-hoc supply and demand analysis also shows potential negative impacts. This approach argues that the higher costs of production may force some companies (that are not able to increase their prices instantly) to lay off workers as in the case of other negative supply shocks such as an energy crisis.

However, there is an extensive literature based on empirical studies showing the opposite. As in the popular Sraffa, Reich, and Card and Krueger examples, literature provides empirical data from the U.S. and many European economies testifying to no negative impacts on employment by higher minimum wages.

The idea is that due to their flexible or monopsonistic nature, labor markets are rather complex. A reasonable minimum wage could even increase employment, for instance. Meanwhile, higher minimum wages could also decrease training costs by decreasing turnover rates.

Nowadays, consensus is rather about rising unemployment amongst low-skilled workers. Most of the empirical findings on negative impacts on unemployment are again related to low-skilled workers or the tradable sectors. Though, these workers could indeed be supported by supplementary programs such as a family support system or other unemployment reliefs.

Higher minimum wages could also increase cost-push inflation (PPI). At least in the short run, wage increases are likely to increase costs of production. Yet, regulatory measures could be used to limit even these price increases. Meanwhile, the TEM (Turkish Economy Model) is actually supporting businesses and mitigating these types of inflationary effects.

The demand-pull inflation may also be brought up, but it is still not that common in newly rising economies such as Turkey. The argument is that increasing purchasing power (following rising wages and salaries) and higher demand are additional factors that could lead to higher prices. Both these factors can lead to demand-pull inflation, especially in the advanced economies.

Another issue, at this point, is that in developing or newly rising economies such as Turkey, it is rather more difficult to assume that all the income increases will lead to instant demand explosions. Bequest or intergenerational transfer motives should also be taken into account.

These type of wage adjustments are surely needed in order to avoid the declining purchasing power, economic contraction, and the resulting potential negative impacts on labor markets and employment. Rising purchasing power and increasing demand, on the other hand, could even potentially lead to higher production and employment.

Policies such as a minimum wage limit would also help deal with race, gender, and ethnic-background related discrimination. As rightly pointed by Saez, Zucman and Piketty, among others, minimum wage debates are also directly related to the fight against these rising inequalities, fairness, and increasing labor income share in national income.

O

n October 29, Turkey’s long-awaited domestically produced electric car (TOGG) production campus was inaugurated in Gemlik, Bursa, and the first mass-produced vehicle saw the light. This was the most important step for Turkey to realize its 60-year-old dream of domestic automobile production.

TOGG means more than a simple car production for Turkey. The first step had been taken in 1961 by the order of President Cemal Gürsel. The first domestic automobile, whose intellectual and industrial property rights belong to Turkey, was produced in just 4.5 months with completely domestic facilities, except for certain parts like electrical equipment, differential gears, glasses and tires.

This Turkish domestic automobile, called “Devrim” (Revolution), had aroused great excitement all over the country when it was exhibited for the first time on October 29, 1961. However, it stopped on the road since it was filled with little fuel only for maneuvering in line with the safety precautions of the time. Subsequently, the project was terminated after opposition groups carried out black propaganda against Devrim, and the car was never mass-produced. But despite this bad memory, Turkey never gave up on its goal for a domestically produced automobile.

After nearly 50 years, then Prime Minister Recep Tayyip Erdoğan brought this issue to the agenda again in 2011 and made a call to investors to produce a Turkish automobile brand at the annual meeting of the Turkish Industry and Business Association (TÜSİAD). After Erdoğan became president, he continued his support for the project. Finally, the Anadolu Group, BMC, Turkcell, Zorlu Holding, and the Union of Chambers and Commodity Exchanges of Turkey (TOBB) launched the country’s Automobile Initiative Group (TOGG) in June 2018. Thus, Turkey entered a new phase in the production of its own automobile.

As a result of the rapid developments in just one year, TOGG’s first C-SUV and Sedan prototypes were introduced in December 2019. Later, in 2020, the groundbreaking ceremony for the manufacturing plant in Gemlik was held. Just two years later, TOGG’s mass production process started on October 29, 2022. With the launch of TOGG sales next year as part of the 100^th anniversary of the foundation of the Turkish Republic, Turkey’s second domestic automobile production attempt will be successfully fulfilled.

TOGG is an important project for Turkey as it is a high-tech product. Besides its impressive design, it has distinctive features such as being fully electric (not hybrid), fast charging under 30 minutes, strong resistance to collisions, and acceleration to 100 km in 4.8 seconds. With these features, TOGG has evolved from a simple vehicle into a completely smart device.

More importantly, TOGG based on a 60-year-old dream, is the product of perseverance and determination. Since the onset of work on TOGG, one of Turkey’s vision projects, opposition groups in Turkey attempted to sabotage the project with demoralizing statements—“You can’t do it,” “You can’t sell it,” “There is neither a factory nor an automobile”—just like in 1961. Despite all this, the government and the TOGG team continued on their quest without paying any attention to such unnecessary discourse.

Likewise, TOGG is important as it is the product of Turkey’s own intellectual capacity. Almost all of the more than 1,000 personnel who work for TOGG are Turkish nationals, demonstrating the high technology capacity of Turkey’s automotive industry.

How Domestic Is TOGG?

In today’s market conditions, it is not possible for an automobile to consist 100 percent of domestic parts. Despite this, 51 percent of TOGG’s parts are domestically produced for now. This rate is expected to increase to 65 percent by 2025. This means that TOGG will become more local in the short run.

According to the data announced by the Turkish Statistical Institute (TÜİK) in January 2022, there are 25.3 million vehicles registered in Turkey, 55 percent of which are automobiles. According to the data by the Turkish Automotive Distributors Association, approximately 1.2 million cars were sold in Turkey in the last two years. And, according to data by the Turkish Electric and Hybrid Vehicles Platform, there are just 6,500 electric cars in Turkey.

Based on these data, which shows that the automobile industry in Turkey is quite dynamic and the electric car industry is new, TOGG can be a strong actor in the country’s automobile industry. Also, it should be underlined that Turkey is entering the market with electric cars in line with the rising trend in the automotive sector. This actually increases TOGG’s chances of success in such a highly competitive market.

Turkey aims to export the TOGG primarily to European countries in 2024 and then to other parts of the world. Of course, in the short term, the TOGG will not enter the global automotive market ahead of strong competitors, but in time, the company has the potential to compete and surpass them. If so, the TOGG will have contributed to decrease Turkey’s foreign trade deficit as a high-tech and high-value item on the export list.

The TOGG factory will employ more than 4,000 people in Turkey when its annual production capacity reaches 175,000. By 2030, as the TOGG factory plans to produce one million vehicles, new production facilities may be required apart from the manufacturing plant in Gemlik. This is expected to have a positive impact on employment. Considering the people who will work in the service networks and subsectors, the domestic automobile project will also help reduce unemployment in Turkey.

Finally, TOGG will be using environmentally friendly lithium-ion batteries, which set zero emission as their goal. In this manner, TOGG is in conformity with Turkey’s long-term goals and policies for combatting climate change by reducing air pollution and greenhouse gas emissions.

Turkey-based think tank SETA (Foundation for Political, Economic and Social Research) has recently published a 54-page report entitled Social Housing as a Solution to the Housing Problem. The report analyzes the causes and consequences of house inflation, and the potential impacts of the ongoing efforts to resolve the recent surge in house prices in Turkey. The report evaluates supply and demand dynamics in the Turkish housing market and discusses the international dynamics leading to soaring house prices.

House inflation is a recent critical challenge of the Turkish economy. Commodity price increases, supply-demand imbalance—especially the slowdown of home construction during the COVID19 pandemic—and the rapidly increasing demand for housing after the pandemic have led to volatile prices across the world.

A comprehensive and long-term solution to the housing crisis

Limitations on housing loans and rent increases have brought a temporary relief in Turkey. However, policymakers focus on solutions that will have longer term impacts, such as support for housing construction and the new social housing projects.

In this direction, Turkey’s first solution to the ongoing global housing crisis is the comprehensive and long-term social housing project called “İlk Evim, İlk Iş Yerim” (First Home, First Workplace). This first step is an ambitious project with the aim of making people homeowners, especially those who are the most affected by the rapid increase in housing prices. The project offers housing, land lots, or workplaces to citizens who do not own property, with relatively long-term payback periods extending to 20 years and affordable installments. The project has been introduced as the largest social housing project in the history of the modern Turkish Republic.

The main problem in the housing sector is the disruption in the supply and demand balance. More specifically, internal and external factors cause the demand to swell and the supply to weaken. Without disrupting the functioning of the market mechanism, the main role public interventions can play at this point is to focus on supporting the increase of supply, such as social housing, and to offer subsidies to the construction processes. New projects such as land subsidies are also valuable in this respect.

The demand-oriented policies of the past, including cheap loans, loan abundance, and extension of maturities to stimulate demand were directed step by step towards production incentives such as reducing costs, and land and infrastructure support, which will increase production and supply. The government’s goal with the new projects to be developed in this direction is to stabilize housing prices and rents, and to restore price stability.

Affordable housing in almost every city

Currently the main problem of the housing market in Turkey is the lack of supply. The sector, which has experienced a serious contraction since, at least, 2017 and especially since the pandemic period starting in 2020, could not keep up with the booming demand after the pandemic. In 2022, the contraction in construction reached 11%. The “İlk Evim, İlk Iş Yerim” project is designed especially for low-income groups.

Affordability is the key issue here. Low prices and long-term payment options provide a serious advantage to people with weak purchasing power. Access to housing is expanded with appropriate installment payments for social housing and land, at a certain percentage of the minimum wage according to the 2023 projection and in line with savings’ rates.

In almost every city, the opportunity to become a homeowner is offered to those most affected by the housing price increases with monthly installments that are significantly lower than monthly rents.

Accommodation or the right to adequate housing, as a human right, is an integral part of the right to an adequate standard of living. However, the world has lately been dealing with an unprecedented surge in housing and rental prices that threatens this very fundamental right. Realtor companies, research centers, the Central Bank of the Republic of Turkey (CBRT), and the Turkish Statistical Institute (TSI) data provide enough evidence that house prices and rental costs are soaring, up to a few hundred percentage points in Turkey.

This recent sizable jump in property prices and rental rates, however, is mainly due to supply shortage and increasing costs of production. There is, overall, certainly a very high demand due to the younger population, increasing external demand, and recent migration waves towards Turkey. Meanwhile, housing supply has also been relatively weak and insufficient, which has affected the increasing house and rental prices and often leading to false allegations against immigrants.

Meanwhile, as of June 2022, official records reveal that the average housing demand from foreigners is about 5-6 percent of the total demand in Turkey. In other words, foreigners, and especially immigrants, are being scapegoated and hence, there is an urgent need to shed light on some misperceptions over property prices in Turkey and put an end to the theory that mainly immigrants or foreigners cause inflation or house price booms.

Housing and rental costs

Inflation is making life very costly for everyone living in Turkey, just as it is globally. Inflation rate has recently hit 79 percent—the highest in the past 24 years. Residential property prices and rental rates are among the leading factors in this figure. Decreasing supply in the past few years (especially during the pandemic), policies that surge demand in Turkey, increasing costs of production (a negative supply shock), and increasing demand are considered amongst the primary reasons for this surge.

Figure 1: The CBRT Residential Property Price Index in Turkey, Source: CBRT

The CBRT Residential Property Price Index (RPPI), for example, has reached 430.60 in May 2022 (Fig. 1). In 2017, this figure stood at 100. As of May 2020, the annual RPPI inflation is at 145.5 percent YOY (year-over-year). The inflation adjusted real-terms growth in residential property prices, on the other hand, is at 41.1 percent YOY. The real-terms growth in particular, is pretty much in line with the respective figures in the U.S. and Europe.

Rental rates are no different. Rental prices are up by 300-400 percent in some regions in southern Turkey, and up by 200-300 percent in some neighborhoods in Istanbul. Data by Endeksa, a private realtor, shows that, as of June 2022, rental rates in Muğla, a southwestern tourism hub, are up by 73 percent (reaching15,000 TL); in Antalya by 310 percent (10,400 TL); and in Istanbul the average rental rate is up by 168 percent (8,100 TL).

Of course, just as with the ongoing global inflation problem, soaring property prices and rental rates are also a global issue today. The U.S., the UK, many European, or even Asian economies such as China are facing new rounds of property crises and unprecedented price hikes in different forms. As Figure 2 demonstrates, many European and North American economies are facing this run-up in property prices. Turkey, with its relatively higher internal and external (exchange rate) inflation, is an outlier nowadays, and has a relatively higher price surge.

Figure 2: Nominal house prices, index is at 100 in 2015, data till Q2 of 2022. Source: OECD

In the U.S., the Case-Shiller Home Index reached 306 in May 2022. In January 2022, the index level was at 212, which means there is a 44 percent increase in the valuation of an average U.S. house over the past two and half years (Fig. 3). Average house prices are up by 10-15 percent in the past year, according to the National Association of Realtors (NAR). In the UK, the Office for National Statistics (ONS) data shows it would, on average, take a paid employee around 40 years to save and invest in order to buy a house.

Figure 3: Case-Shiller Home Index in the United States. Source: St. Louis Fed FRED database

Property bubble arguments, rocket high rents around the world are evident. However, recent tightening cycle and its further consequences for the global property markets are yet to be observed. The increasing costs of production, the rising cost of debt due to the recent tightening trend, and the concerns that properties are overpriced need to be kept under careful scrutiny. So, what can we expect in the future?

Commercial property investments are lately in decline in the West, including in the U.S., the UK, and Germany. China is already shaken by the property crisis or the Evergrande crisis in particular, and homebuyers are refusing to pay mortgage loans. The post-pandemic demand for rural areas and land may also take down urban real estate prices.

New trends such as remote work may also help bring down demand for office rentals. Swiss bank UBS expects a 20 percent decline in demand for office leases. Shares of real estate companies and real estate trusts may also go down, but house prices are likely to remain high—hopefully, however, without increasing further.

Turkey is seeking to counter the Western and neo-colonial influence in the African continent by its increasing economic as well as political presence in the continent. The latest visit by President Erdoğan to strategic countries in Central and West Africa has cemented this vision set by Ankara. Erdogan’s commitment in strengthening the ties between Turkey and Africa is demonstrated since 2004 in the 50 plus trips to the continent and the 30 visits he made to African states.

In his four-day visit to Central and West Africa, Turkish president Recep Tayyip Erdoğan aimed to boost economic as well as political relations with strategic African countries, following the roadmap designed in the Turkish relations with Africa for 2022 to 2026. Last October, Erdoğan’s four-day diplomatic tour included Angola, Nigeria, and Togo. Also, in October 2021, Istanbul hosted ministers from African countries and business leaders in a summit which aimed particularly at boosting trade between Turkey and African nations.

In his African tour, Erdoğan has visited the Democratic Republic of the Congo, Guinea-Bissau and Senegal. Erdoğan’s visit to Guinea-Bissau was the first-ever presidential visit from Turkey to Guinea-Bissau. In Congo, a cooperation deal on the defense industry, a military framework agreement and a protocol on financial aid were signed between both sides.

In Senegal, Erdoğan and his Senegalese counterpart President Macky Sall attended Turkiye-Senegal Business Forum in Dakar, where Erdoğan said that his target to increase the bilateral trade volume between the two countries from $400 till $1 billion. Erdoğan highlighted that despite the coronavirus pandemic, the trade volume in 2021 jumped 42% year-on-year to $540 million.

Erdoğan said his target is to increase the bilateral trade volume between Turkey and Senegal from $400 till $1 billion.

Since 2007, The Turkish Cooperation and Coordination Agency (TIKA), has completed around 190 projects in Senegal. In terms to the cultural relations between the two countries, the Turkish Maarif Foundation has provided education to almost 800 students in Senegal.

Because of its geographical location, Senegal is an export gateway to West African countries.

In his visit to Kinshasa, the capital of the DRC, the two countries have signed agreements to enhance cooperation in various fields, including a military framework agreement, a protocol on financial aid and a cooperation deal on the defense industry. Erdoğan who was accompanied by a delegation of Turkish businessmen and government officials.

President of Democratic Republic of Congo Felix Tshisekedi described the cooperation agreements with Turkey as “win-win” deals, adding that Congo has sought Turkish support in the fight against militia groups active in the east of the DRC.

In the last 20 years, the number of Turkish embassies in Africa has risen from 12 to 43, with the aim is to increase it to 50, according to the Turkish vision and the country’s policy of “Strategic Africa,” launched by Erdoğan in 2003. As the European Union is the first trading partner and the first investor in Africa according to Ursula von der Leyen, president of the European Commission, the trade between Turkey and the African continent has increased to $25.3 billion in the past decade, after it commissioned the Africa Opening in 2005, and compared to only $5.4 billion in 2003.

Ankara has a commitment to increase this bilateral trade to more than $50bn in next coming years. Additionally, Turkish Airlines has become a key player in African countries, providing services to more than 60 destinations, while putting Istanbul a central destination for intercontinental travel.

Turkey has highlighted that Western countries have exploited the Africa continent for decades for their own imperialist interests. In that respect, in contrast to the American and European approaches, and the former as well as new Western imperialism in Africa, Turkey’s business and political approaches to the African countries have focused on development and cultural projects.

Elif Comoğlu Ulgen, the Turkish Ambassador to South Africa said that Turkey is in the continent with a win-win strategy and Africans see Turkey as a country not coming to the continent with any colonial baggage. On the other hand, since the fifties, the terms of engagement of the EU with African states was determined without consultation with Africans.

Addressing Angola’s parliament last October, Erdoğan stated that “As Turkey, we reject western-centred orientalist approaches to the African continent”. In his criticism to the UN Security Council framework and hierarchy, Erdoğan highlighted that 1.3 billion people live on the African continent however they are not represented at the Security Council.

As Turkey, which is described by Erdoğan as an “Afro-Eurasian state,” positions itself as a fairer and strategic alternative ally for African nations, its policy in the continent has become under the spotlight especially by the former imperialist states which could view its new position as a threat to their economic and political influence in the continent.

According to a survey conducted in autumn 2021 by the German Chamber of Commerce Abroad (AHK), the majority of German companies in Turkey consider the country a favorable investment location. There is a lot of potential for Turkey and Germany to benefit from each other as economic partners, but political developments are hindering the realization of this potential.