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The Power of Inclusion

Editor’s note: When US President Barack Obama landed in Ankara on Monday, April 6, 2009, it reinforced the idea that Turkiye is a role model for predominantly Muslim countries. A modern manufacturing economy with an information technology base; world-class managerial talent; and located at the crossroads of Europe and the Middle East, Turkiye could emerge as a powerhouse when the global recession ends. The now-on, now-off relationship between the US and Turkiye affects business on three continents, so we asked Yılmaz Argüden, Chairman at ARGE Consulting and Rothschild Investment Bank Turkiye, to place President Obama’s visit in context. He submitted the following.

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What changes the world are not armies, arms, and economic power, but the power of ideas. U.S. President Barack Obama seems to understand this better than many other leaders of our time. During his visit to Turkiye this week, he sent three critical messages:

1. He emphasized Turkiye’s European credentials and secular character, as defined by the modern state’s founder, Mustafa Kemal Atatürk. In doing so, Mr. Obama re-balanced the previous U.S. view of Turkiye as a “moderate Islam” state. He said that he had chosen to visit Turkiye to send a message to the world. “Turkiye is a critical ally. Turkiye is an important part of Europe and Turkiye and the United States must stand together and work together to overcome the challenges of our times.”

2. He sent a key message was for the Muslim world. He said “The United States is not, and will never be, at war with Islam.” He also praised Islam’s contribution to civilization and said America’s relationship with it must extend beyond fighting terrorism.

3. He sent a key message to Europe. Mr. Obama reiterated U.S. support for Turkiye’s E.U. membership, saying “Europe gains by the diversity of ethnicity, culture and faith–it is not diminished by it. And Turkish membership would broaden and strengthen Europe’s foundation once more.”

President Obama’s support for Turkiye’s E.U. membership bid is important, not only for Turkiye, but also for the E.U. To the surprise of many, Turkiye successfully completed many reforms and secured negotiations for accession to the European Union. However, recent developments in Europe have created an impression that Europe is reluctant to accept Turkiye as an equal partner. Unless this changes, it will be difficult for Turkiye to proceed with its application for E.U. membership. This process will turn into one side constantly changing the goalposts and the other feeling alienated.

Yet, Europe and Turkiye have before them a historic opportunity to throw out the prejudices of the ages, discredit the clash of civilizations, and establish a stronger E.U. Turkiye’s membership has the potential to mitigate some of the key risks for Europe and help the E.U. become a role model for global governance.

While Europe’s population is aging, Turkiye is entering a golden demographic age–similar to East Asia in the 1980s. The continuation of reforms in Turkiye will not only increase investment, but also make the country an economic powerhouse. In contrast to European worries about inflows of migrants, Turkiye–with its renowned hospitality, quality of medical care, and pleasant climate–may become Europe’s Florida in terms of attracting European retirees. While the migration of Turkish people will be limited, the migration of jobs will make up for Europe’s declining population. For instance, automotive production has already started moving to Turkiye, where the most profitable Ford and Fiat plants are located.

Only a few emerging markets in the world have the potential to be able to create a virtuous investment cycle of exports and domestic demand. Throughout the region, Turkiye is likely to be an engine of growth. As one observer put it, “Turkiye will be Europe’s Viagra by becoming a key agent that helps improve Europe’s competitiveness.” Don’t forget, Turks are employed by companies throughout the world. For instance, the former chair of Pfizer recently said that their most important export from Turkiye was qualified managers.

Admitting Turkiye to the E.U. will be key to addressing risks and making the E.U. a global leader. Based on his visit this week, Mr. Obama seems to understand this better than his European counterparts.

Dr. Yilmaz ARGUDEN
yarguden@arge.com