ISSN 1392-1258. EKONOMlKA 2005 69

GEOECONOMIC POLICIES FOR REGIONAL DEVELOPMENT: TURKEY AS A CATALYST FOR EASTERN EUROPE

Sukru Inan Research Assistant Inonu University, Faculty of Economics and Administrative Sciences, Department of Economics Malatya, Turkey Phone: +90 (0) 422 341 0010 Office: 4343 Fax: +90 (0) 422 341 00 43 E-mail: [email protected]

This paper examines the influence of geoeconomic policies on development. The new age is characterized by not political or ideological rivalry but by economic competition. States do not aim at conquering lands but rather at dominating and controlling markets. That process brings the discussion that the age is whether a geoeconomic age or a neo-mercantilist age with the writings of pundit writers of geoeconomics in terms of the economic policies of developed and developing countries. In the geoeconomic world developed countries mainly apply neo-mercantilist policies towards the developing countries, and as a response developing countries that were "second orders" or "middle powers" of the geopolitical era generate their own regional geo-mercantilist policies and closer economic relations with neighbor countries. Turkey's strategic and geopolitical importance is continuing with its geoeconomic importance in the new era. Since the 1980s Turkey's growth and industry-oriented policies have shifted from the realm of public policy to a -driven domain. And later, with the collapse of the USSR and the end of the Cold War, the "Iron Curtain" around Turkey has absented. These two transformations gave Turkey a great chance with her historical, cultural and economic ties to form a geoeconomic space and to become an engine of regional development. This study investigates the importance of Turkey for regional development with its geoeconomic policies in terms of energy. trade, and investment policies. Turkey as a bridge or a frontier between East and West could play an effective role. For Eastern Europe, Turkey will create a catalyst effect as a bridge, however, its effect will be an impediment as a frontier. Keywords: geoeconomics, neo-, geo-mercantilism, Eastern Europe, Turkey

Introduction economic policies. From this point of view I The central argument of this theoretical stressed on some concepts, which are geoeco• paper is that in the new world order geoecono• nomics, neomercantilism and geomercantilism, mics is the primary instrument of states' to explain the new formations on the globc.

30 My argument rests on the proposition that cohesion. The New World Order emerges second order states (Turkey is taken into instead of the Old World Order as the novel consideration in this paper) will play an framework that guides the behavior of interna• effective role in the geoeconomic world with tional institutions and of the important their geographical position, population and regional entities. The power behind today's economic potential. headlines is the eagerness of a nation state to Until recently, most of those who studied expand its markets, guarantee its supply lines power thought of it largely in geopolitical and thrust upon its antagonist its competitive rather than geoeconomic terms. But events advantages. The central feature of the era of over the last two decades have resulted in Geopolitics was immobility. The superpower increased attention to geoeconomic power and rivalry had a static effect on the overall global conflicts in international relations (Nester, situation. In the days of Geoeconomics the 1995). primary feature is dynamism. There is an The British economist Hawtrey wrote of a interrelation between markets, states and world where 'the major concern of the state is technology. prestige. The means to prestige is power. Power is economic productivity capable of being Geoeconomics applied as a force'. Samuel Huntington (1993) has expressed the same point in a modern Geoeconomics was initially part of geopolitics. th idiom 'Economists are blind to the fact that Since the beginning of the 20 century geoeco• economic activity is a source of power, as well nomists have been studying the relationships as well being. It is, indeed, probably the most between "homo economicus" and space, the important source of power and in a world in influence of space on production and goods which military conflict between major states is flows, as well as the possibilities of space usage unlikely economic power will be increasingly for the progress of economic activities. Space important in determining the primacy or factors are comprised of geographical location, subordination of states'. The model which is the distribution of natural and human re• implicit in this view is a kind of zero sum game sources, location of production knots and in which the gains of one country (primacy) poles, the structure and specification of are seen as canceling out the losses of another railroad and telecommunication networks, (subordination) even if both achieve growing costs of exploitation and transportation of prosperity. It has been called 'geo-economics' resources, etc. From an epistemological point by Edward Luttwak (1990). 'the pursuit of of view, geoeconomics is a synthesis of adversarial goals with commercial means'. economics, history and politics. Geoeconomics National security involves winning this is an applied science, which takes into account economic 'war' (Cable, 1995). spatial, historical, cultural, ethno-psycho• Our age is characterized by three main and logical, etc. factors. It elaborates technologies, powerful trends (Andrianopoulos, 2004): for promoting national economic interests Geoeconomics is replacing Geopolitics as the abroad and for strategic operating in geoeco• major force behind inter-state relations. New nomic space, with the aim of identifying and Economy rivals Old Economy as the engine of occupying the most advantageous patterns and growth and as the principal means of social niches that will assure the participation of the

31 national economy in global product creation states, especially those regarding international and global income distribution (Prohnitchi, trade. Finally, the geographer and former 2003). Herodote editor Michel Foucher (1997) has The old version of state rivalry is now called also discussed geoeconomics as a new dogma. geoeconomics. Countries acting as a firm He emphasizes that geoeconomics is practiced would maximize their profits. Some of the by states among which war is no longer strategies they might use against their oppo• conceivable. Geoeconomics point out the fact nents are investment capital provided by the that states compete with each other for state for industry, subsidizing product develop• economic power, and no more for territorial ment, and penetrating the market. This is what power (Mamadouh, 1999). is called geoeconomics. Some other strategies "Geoeconomics elevates the entrepre• are to use tariffs through taxes, quota limits to neurial interests of investors and consumers; cope with too little money. In the past, most in contrast to the geopolitical focus on national people thought that in the future there would borders and place, geoeconomic discourse be no trading blocks, but the fact remains that privileges networks and pace; and instead of they are actually increasing. In economic terms, concentrating international politics on building it is wise to maintain these relationships with alliances for "security" against supposed "evil other countries, but countries do not always empires," geoeconomics is primarily con• act according to economic terms. The logic of cerned with building international partnership conflict between two countries involved in war that advance "harmonization," "efficiency," is a zero-sum relationship. That means that "economic leverage" and "growth" against the when one of them has gains, the other must supposed threats of political "radicalism," have losses. In commerce, both countries can "anachronism" and "anarchy." Both Sum and gain (Luttwak, 2004). Jessop use geoeconomics in a similarly critical, Geoeconomics purports to place interna• postnational way, applying it largely to the tional politics on an economic basis. In the macro, continental-scale dynamics associated words of Edward Luttwak, "everyone, it with the relations between the so-called "triad" appears, now agrees that the methods of regions of the EU, NAFTA and the Yen-bloc commerce are displacing military methods - (Spark and Lawson, 2004). with disposable capital in lieu of firepower, According to Savona and Jean (2004), civilian innovation in lieu of military-technical geoeconomics as a discipline deals with aspects advancement, and market penetration in lieu of international competition in which the main of garrisons and bases. States, as spatial entities protagonists are not corporations, trusts or structured to jealously delimit their own banks, but states. The interpretation of world territories, will not disappear but reorient development emphasizes economic and themselves toward geoeconomics in order to geopolitical processes seen as interstate rivalry. compensate for their decaying geopolitical "Geoeconomics is economic geopolitics which roles." In geoeconomic state rivalry, the "logic is coming to replace the predominantly military of conflict" will be expressed in the "grammar geopolitics of the past", write the authors in of commerce" (Owens, 1999). the preface to the Russian edition. According to Lorot (1997), geoeconomics There are many definitions of "geoeco• is the analysis of the economic strategies of nomics", but geoeconomics is commonly seen 32 as a state centric model of post-Cold War era mercantalist states concentrate on promoting that analyzes interrelations of state behaviors high technology consumer- and equipment• in a globalized world. However, in preference industries that most efficiently create wealth to "geoeconomics" some economists see the and expand the middle class. In many ways, new era as a neomercantiIist age and use neo• neomercantiIism is a reaction against liberal mercantilism instead of geoeconomics. But the idealism. Liberal economists construct an ideal word neo-mercantilism does not explain the world and attempt to shape the real world whole world and the practices of states, which accordingly. In contrast, neomercantilists are still the main actors. Recognizing the attempt to understand the way global political concept of neomercantilism means that the economy really operates and act accordingly. world is a market and a colony of the three big While liberalism's goal is free markets, trade blocs. Neo-mercantilism can be seen as neomercantilism's is the creation, distribution a geoeconomic policy that "three big states" and securing of wealth. Thus, neomercantilists practice. On the other hand, developing states first determine which industries can create which were "second orders" or "middle most wealth and then map a strategy whereby powers" (see Berridge, 1992) of the geopo• those industries can be developed. In addition, litical era generate their geomercantilism as a neomercantilists see international trade as geoeconomic policy. largely a zero-sum competition in which one side's gain is another's loss. Thus, neomer• Neomercantilism cantilist governments use any means they can to tip the international trade playing field in Mercantilism is the short name given to the favor of its own firms. "commercial or mercantile system" that Adam Robinson (1951-1979) also analyzed the Smith was so opposed to. A mercantilist world practice of trade and financial policy in the real was the one dominated by rival empires, in world, which she argued to constitute a "new which the government of each was subservient mercantilism" in which individual countries to big business interests and in which nations sought to increase their own income and competed by trying to maximize their holdings employment (via trade surpluses) at the of 'treasure' (Rankin, 1999). "Mercantilism", expense of their trading partners. Since the Keynes writes, "is a continually developing total market does not grow fast enough to doctrine of the role of the national state in make room for all, each government feels it a economic and social affairs, and the term neo• worthy and commendable aim to increase its mercantilism is merely a means of distin• own share in world activity for the benefit of guishing between the absolutist or oligarchical its own people. This is the new mercantilism ... form and that of a more democratic society" Every nation wants to have a surplus in its (Rich, 2003). balance of trade. This is a game where total Neomercantilism (Nester, 1995) is the scores add up zero. Some can win only if others contemporary version of mercantilism; it is a lose (BIecker, 2003). developmental and national security strategy Bartlett (1994) sees Luttwak's geoeco• for liberal democratic countries in an inter• nomics as mercantilism. He says, " Luuwak has dependent world. Rather than spend scarce failed in his effort to develop a new geoeco• resources on the military sector, neo- nomics. That is mainly because he is mixing

33 apples and oranges. The premises that underlie contains three established economic nations geopolitical analysis are completely different (USA, Japan, and the European Union), one from those that underlie economic analysis. At emerging economic nation (China), one the simplest level, geopolitical analysis assumes defunct economic nation (Russia), and the a zero-sum game: territory can only be held by West Asian nation centered on Saudi Arabia. one state at a time, thus, one state's gain must "Wallerstein (1984) argues that it would be be another's loss. The basic premise of rational for a hegemon to promote free trade" economic analysis, however, is that both parties (Wilkinson, 2000), however, neither the benefit in a exchange, otherwise American economic nation nor the Japanese the exchange would not be made ... In the end, economic nation adopt free trade. Nor are they Luttwak's worldview can be summed up in one likely to. In the real world, trade is something word: mercantilism". Luttwak (2004) res• that takes place mostly within rather than ponses that "the role of government can really among economic nations. affect the outcome of a particular industry in "Economic growth is the most important the economy. The state must be strong and well social policy objective a country can have other organized. There cannot be a successful geo• than keeping its people physically safe", writes economic action without industrialist and Gingrich. He adds: "America's future depends bureaucrats to take the process underway. on economic growth. Economic growth Geoeconomics is not new, it is compared to depends on our ability to compete in the world mercantilism, the only difference is that there market" (Rich, 2003). is no actual war; no physical damage is done "In the neomercantilist world we actually to either side. The only competition is done live in, most trade (and most investment) is through economic means. Those who are at a internal. The neomercantilist loss in this geoeconomic transactions are small is structured around a few large economic businesses and new big corporations who are nations. That is better than the three alterna• not subsidized by the state". However, colo• tives: (i) an anarchic world containing many nialism is still continuing with the American small nations with minimal freedom from the Hegemony in today'S geoeconomic world near power plays of others, (ii) an anarchic world energy resources. And, Luttwak accepts the without nations, or (iii) a world without nations neomercantilism in which "geoeconomics but with a government which could all too practices are only possible to well developed easily abuse its considerable powers", says countries like the U.S., European countries, Rankin (1999) and adds that "modern neomer• and Japan. Countries which are smaller have cantilism, however, is based on regionalism, too many territorial problems to worry about which in some ways represents a retreat from such things as innovation". globalization (1997). Neomercantilism (Rankin, 1999) is best understood as the grouping of the world's many Geomercantilism political nations into a small number of large economic nations. The 'capital' nation of any Joseph Stiglitz, fonner Chief Policy Adviser in economic nation is just the nation that serves President Clinton's Administration, said: as the primary source of capital within each "I found myself in the uncomfortable position group of nations. The present world economy of an American saying 'do as we say, not as we 34 do'" (see Shafaeddin, 2000). that regionalism has been on the march. There Braudel (1979,1987) showed that the basic were widespread attempts at regional trading economic units of were neither local agreements in the 1960s, which largely failed. nor national, but were rather regional eco• That period has been called the First Regio• nomic units which included several local nalism, and the current period the Second realities linked amongst them by a system of Regionalism (Bhagwati, 1991). Before that, in relations (mainly commercial) that constituted the 1930s, there was a major fragmentation of a world economy (Santos, 2000). the world trading system into competing blocs, Regional trade is everywhere on the rise which in the standard view succeeded only too and much more so than international trade well. There is little point in trying to identify proper. As a case in point, on a thirty to thirty• the earliest regional trading agreement in five year period, the world economy has history. For as long as there have been nation• witnessed the consolidation of a double states with trade policies, they have discri• process: that of a slower growth in extra• minated in favor of some valued neighbors and regional trade on the one hand ( + 3.2%) and against others. Regional trading arrangements a much more important growth in intra• have at times played major roles in political regional trade ( + 10%) on the other (Brunelle history. For example, the German Zollverein, and Deblock, 2004). the customs union that was formed among 18 One of the commonly supported hypo• small states in 1834, was a step on the way to theses about world trade, often given without the creation of the nation of Germany later in statistical validation, is that intraregional trade the century (see www.iie.com). Since the has been growing faster than global trade. middle 80s, we are witnessing in each continent Some economists even express concern that a quantitative and qualitative growth of various the world will be trisected into three economic forms of regional cooperation, regional and trade zones: Europe, the Americas, and organizations and regional associations. This Asia (Otsubo, 1998). The world outside of new phenomenon can be explained (Telo, these three is also making efforts to organize 1998): their economic regionalism. The Andean as a reaction to increasing international Group, CACM, CARICOM, LAIA, competitiveness; MERCOSUR, OECS, ECO, GCC, SAARC as a consequence of the interest of are signs of the economic regionalism of national economies to make themselves developing countries. Success of these intra• fit to face globalization (limited free trade arrangements depends on these four trade areas and so on); characteristics (Kotler, Jatusripitak and as a Forum of intergovernmental Maessincee, 2000): cooperation; similar GNPs - as an imitation of the well-performing geographical proximity E. U., supported by the E. U. itself (as in similar or harmonious trade regimes the case of Mercosur); political commitment to the regional as a consequence of a functional organization. spillover of companies-cooperation, This is certainly not the first time in history branch-cooperation, interest-networks

35 and so on (namely in the case of Asia). rience in many parts of the globalized eco• Regional cooperation provides public nomy. They are characterized by economic, goods, very useful for peace keeping and trade or strategic goals that could even conflict preventing: degenerate in political conflicts. Given the reducing nationalism and intolerance, failure of everywhere in the reducing localism, braking frag• world, a "benevolent neomercantilism" seems mentation, regulating migration flows, to be a more realistic variant: as a kind of in the name of cooperation, people defensive trade policy with the goal of keeping understanding and good neighbourship; the domestic market protected from a too making the dialogue of center and strong global competitiveness and to answer periphery countries belonging to the social demands. same region easier (USA and Mexico; Asian policy communities have learned EU and Eastern Europe; Japan and that globalization and regionalization are not Asia; South Africa and neighbouring mutually exclusive activities but rather they countries); exist in a dialectical relationship. The 'new reducing the number of international regionalism' is not an alternative to globali• players and making the world gover• zation. Rather, it is an ineluctable part of it. nance easier. Less a challenge to multilateralism, the new For developing countries, PTAs may regionalism represents a meso level in an increase leverage by accumulating the market emerging structure of multi-level governance power of individual members, giving them a geared to fostering cooperation and trade greater ability to influence their terms of trade creation (Dieter and Higgott, 2002). and to negotiate favorable settlements with According to Pahala and Sharma (1996), outsiders. On this score, Pascal Lamy, the EU's "the developing world is at present expe• Commissioner for External Trade, conceded riencing a wave of trade reform as has never that "consolidating MERCOSUR will give been seen before. The reforms include the Brazil and its partners ... more political weight reduction of quantitative restrictions and their in inter-national negotiations." Anticipating replacement by price measures, the lowering the formation of MERCOSUR, a Brazilian of tariffs, the simplification of import and official similarly remarked, "Dealing directly export procedures and the unification of rates with the U .S. on international trade issues is of exchange. Even some of staunchest believers like getting into a cage with a tiger. Only if we in important substitution (such as Mexico, have others in with us do we stand a better Turkey and a score of African countries) have chance of getting some satisfactory results" recently yielded to the siren song of "outward (Mansfield and Reinhardt, 2003). orientation". The Big Emerging Markets An opposite scenario (Telo, 1998) would (BEMs) have become a new attraction these mean neo-regionalism as a reaction against days. These markets share a number of globalization, as a channel of domestic fears, important attributes. They are all geogra• a kind of a shield ensuring economic security, phically large, have significant populations, and a framework for demands of trade protec• represent considerable markets for a wide tionism. Geoeconomic conflicts between range of products. Virtually, all have strong regional blocs are already a common expe- rates of growth or hold out the promise of 36 economic expansion in the future. Each has agreements currently in force. These agree• undertaken significant economic reforms and ments and initiatives vary substantially in seems likely to expand on them in the future". coverage, scope and completeness: the These large scaled countries which have a European Community, the only entity with a strategic position in the geoeconomic world fully fledged single market and a supranational achieve geomercantilist policies toward authority; MERCOSUR, the Andean Group neighboring countries. Brazil with and CARICOM designed as "classic" custom MERCOSUR is an early example of that unions with a common external tariff; EFTA geomercantilism. and NAFTA as free trade areas; APEC as an example of a looser association of trading Geoeconomic world order partners with the long-tenn aim of free trade; the Free Trade Area of the Americas, a grand During the cold war the international system design but still only at a conceptual stage. As was characterized by a bipolar structure and regional trading arrangements (RTAs) have an ideologically driven basis of enmity and spread, enlarged and deepened over the last rivalry between the two major power blocs. By decade the discussion has intensified whether the mid 1990s a number of competing images RTAs stimulate growth and investment, had emerged to describe the new configuration facilitate technology transfer, shift comparative in international relations (Kemp and Harkavy, advantage towards high value-added activities, 1997). After the Second World War the world provide credibility to reform programs, or moved towards its stability and new social induce political stability and co-operation. goals, that is, it moved from geopolitics to There is also the proposition that RTAs are a geoeconomics. In other words, it allotted an useful vehicle for countries to employ for increasing importance to economic processes, improving their international competitiveness. transnational economic integration, globali• In this context it is claimed that trading blocs zation and the creation of the new world can serve as a testing ground for eventual economic balance (Mitrovich, 1999). global integration as they allow firms to Fisher (2004) states that together with the gradually develop internationalization skills acceleration of the process of globalization (see Table 1). regional trade agreements have gained According to Harkavy (1997), the three• momentum in the 1980s and 1990s in all parts bloc neo-mercantilist thesis, or the Three-Bloc of the world, 10 involving economies at all Geoeconomics Model theory, a new interna• levels of development. This means that the tional system in which geoeconomics replaced world has seen at least as much fracturing as geopolitics as the most crucial determinant of merging. With the emergence of APEC, the rise or decline of nations, and that military virtually all members of the World Trade power was thus becoming increasingly less rel• Organization (WTO) now participate in at evant, hence wasteful, in the context of global least one agreement to advance regional trade competition. Central to the geoeconomics im• in goods and/or services. In the agery as expressed in the writings of WaIter context of the newly established Committee on Russell Mead, Jeffrey Garten, Edward Regional Trade Agreements, the WTO Secre• Luttwak, Lester Thurow and others is the be• tariat has identified 88 individual regional lief that the world is evolving into three co m-

37 Table 1: Intra-trade of trade blocs Intra-trade ofgroups as percentage oftotal exports ofeach group TRADE BLOC 1980 1990 1995 2000 2001 2002

EU and Countries 60.9 67.1 66.1 67.2 66.6 66.6 accedine in 2004 (25) NAFTA 33.6 41.4 46.2 55.7 55.5 56.0

ASEAN 17.4 19.0 24.6 23.0 22.4 22.8

MERCOSUR 11.6 8.9 20.3 20.9 17.3 17.7

ECO 6.3 3.2 7.9 5.5 5.4 5.5

BSEC 5.9 4.2 18.1 14.2 15.0 13.9

APEC 57.9 68.4 71.8 73.1 72.6 73.5

Source: UNCfAD: Handbook of International Trade and Development Statistics 2002 petitive economic blocs including (1) a Japan• thesis and the related theme of the "end of led Pacific Rim region including Korea, South• history," there will likely be a permanent peace east Asia, and presumably China; (2) a V.S.• among the industrialized democracies of led Western Hemisphere bloc centered on the Europe, North America, Asia, and Oceania North American Free Trade Agreement juxtaposed against the increasing chaos, (NAFfA) and potentially encompassing Latin bloodshed, and ethnic-racial fragmentation America; and (3) a German-centered Euro• within what used to be called the third world. pean bloc, assumed to include Russia and other This model accepts the idea, central to the ex-Soviet states and perhaps also North Africa. three-bloc configuration of evolving, peaceful In this way, the less-developed expanses of economic competition among the major Africa and South Asia, not to mention the power regions (Harkavy, 1997). Also Cohen Middle East, are relegated to the status of saw The Middle East and Southeast Asia as neocolonial resource zones to be courted by the primary shatterbelt regions, and he says the three major blocs. Such bloc competition that "the shatterbelt appears to be incapable is predicted to be primarily economic in char• of attaining political and/or economic unity of acter, that is, without a security dimension (no action," and that whereas some parts of the arms races and potential warfare). In a broader shatterbelt may be committed to neutrality, sense, some analysts see geopolitics being su• others are enmeshed in external ties. Hence, perseded as the main focus of international too, referring to the Middle East, he says that relations by geoeconomics. "it is because internal differences are so This geoeconomics model is related to marked, and because they are found in a region another image - that of the "zones of peace• that is crushed between outside interests, that zones of turmoil" theme propounded by Aaron we have defined the Middle East as a shatter• Wildavsky and Max Singer. According to this belt." That was, of course, during the cold war

38 (Kemp and Harkavy, 1997). time also gateway toward second outside Cohen's analysis covers two types of the geopolitical region named a Shatterbelt region re-orientation and realignment of political covering Near and Middle East". territorial units at all levels of the geogra• Politically, according to Cohen, the world phical chart - territorial and political (Tunjic, is becoming multipolar with a hierarchy of 2004). states within the system. The position of a state Cohen's geopolitical structure is hierar• on the system's hierarchy list will be deter• chical. At the highest level there are two mined by its capability to project its own power. strategic realms, which are "arenas of strategic The list will not remain static, and the positions place and movement." Reflecting the classical of the states on it will be changing constantly. origins of geopolitics, he identifies these However, on top of the list are five major forces geostrategic realms as the maritime and the or centres of the first order: the USA, a Eurasian continental. Two are part of Eurasian maritime and sole military and economic continental realm: the Russian heartland and colossus; Russia and China, militarily strong East Asia. Of the remaining regions, Cohen but economically relatively weak land Eurasian argues that one, South Asia, is independent. forces; Japan and the European Union, Another, the Middle East, remains a shatter• economically dominant but without sufficient belt. Yet another, Central and Eastern Europe, military capabilities. The second place on the Cohen describes as a "gateway region" (see list is occupied by regional forces which have Figure 1), a transitional zone that can facilitate challenged and changed the bipolar and contact and interchange between the two multipolar world, but have not displaced the realms. "What seems to be important is that major powers. Rather, they have become Southeastern Europe is twofold gateway. It is absorbed within an evolving system. They are between geostrategic realms and at the same located within individual regions that are

Figure 1: SEE in the new global and European structure. Source: Waever, 1997

39 already dominated by a major force and cannot Central Asia, and the Black Sea. In close represent any serious challenge. "Second• proximity to the major oil and gas deposits in order states may have regional hegemonic the Caspian Sea and northern Iraq, it is also a aspirations, but such hopes are far from key player in the "Great Game" of pipeline reality", says Cohen. "In general, then, the politics in the region. destiny of second-order powers is not to The disintegration of the Soviet Union and achieve hegemony over an entire geopolitical transformation process in Eastern Europe region. Rather, it is to exercise broad regional created a boom in economic relations between influence, with hegemony having practical Turkey and Eurasian countries. A chance for significance only in relation to proximate Turkish businessmen to play an important role states" (Tunjic, 2004). in Turkish policy towards this region came The imperialisation of the European space because of the geographical proximity, is characterised also by the traditional rivalry historical and cultural links, ethnic links, and of Germany, Russia and Turkey. The last two, Turkey'S success in adapting to market due to their imperial legacy and geographical economy, speedy growth in sectors producing location, are even today wavering between the goods and services in demand in Eastern national and imperial vision of their identity Europe, and a wise export promotion strategy (Tunjic, 2004). (HA, 1996). Besides that, since the coUapse of Turkey's historical, cultural and geostra• the USSR, Istanbul, a vast metropolis of over tegic relations in the region with her geoeco• 9 million people, has become the center of the nomic space present to Turkey many oppor• so-called "Turkish world". In the light of this tunities. Turkey is a "second order" of the development Istanbul is now regarded by region that only exercises a broad regional Western companies as a strategic gateway for influence. accessing these previously unknown emerging markets (Perouse, 1999). Geoeconomic role of Thrkey Turkish firms have permanently enlarged their trade with Romania, Bulgaria and The liberalization of the Turkish economy in Macedonia, but only in Romania have they the 1980s, the adoption of an export-oriented supported their trade activities with serious development strategy, the positive state of investments. The number of Turkish invest• affairs in the neighboring regions, the country's ments in Romania has grown to 4000. The geographical position at the crossroads of value of Turkish investments in Romania has Europe, Central Asia and the Middle East, all reached $60 million and Turkey has become provided a high growth in foreign trade and one of the major investors in that country. In foreign economic relations. Bulgaria, where approximately 1200 Turkish Turkey's location, as Torbakov (2003) firms are established, the value of total defines that, right in the middle of the Southern investments is very small ($3-$4 million) and Caucasus/Northern Mesopotamia region, most of the firms are engaging in trade and makes it a key player in several overlapping services. This trend is also valid for regions: Western Europe, the Balkans, the Macedonia, but in Albania the number of Aegean and Eastern Mediterranean, the Turkish firms has increased in the last year Middle East, the Caucasus-Caspian complex, and some Turkish firms undertook serious

40 projects (JIA, 1996). relations, energy and energy transportation, Another important element in Turkey's communication, education, tourism, culture, foreign economic policy at the time was the health, technical assistance and services. steps it took towards strengthening its regional Agreements on Trade and Economic Co• position through founding and developing operation, Reciprocal Promotion and Protec• regional economic organizations. The imple• tion of Investments and Avoidance of Double mentation of the European Union (EU)• Taxation constitute the legal basis of economic Turkey customs union agreement, 1 January relations between Turkey and the Republics. 1996, started the third period of reforms in These three kinds of agreements were con• Turkish foreign economic relations. cluded with most of the Republics. Within the The biggest disadvantage of the customs framework of Agreements on Trade and Eco• union is the effect on relations between Turkey nomic Cooperation, Joint Economic Commis• and third countries. Turkey's obligation to sions were established to review the economic automatically implement common tariffs and commercial relations and to help the re• against third countries will create problems for alization of cooperation possibilities between the country in establishing relations with third the parties. countries and different co-operation models, The cooperation in the energy sector, because decisions affecting Turkish relations particularly in the transportation of oil and with third countries will be taken abroad. The natural gas between Turkey and the Republics speedy signing and ratification of free trade seems to contribute greatly to the development agreements (FTAs) will partly solve this of trade and economic relations in the coming problem. The first agreement of this sort is the decade. The Turkish Petroleum Company has agreement signed with Israel, 14 March 1996, invested in Azerbaijan and Kazakhstan both after three years of negotiations. The signing by itself and in the form of joint ventures. In of FTAs with Russia, other CIS states and respect to pipelines, two great projects have Balkan states will compensate for some of the utmost importance, one being the Baku• disadvantages of the customs union agreement. Ceyhan Crude Oil Pipeline Project which shall It will be in harmony with the EU policy toward transfer 45-60 million ton Caspian basin oil regional countries too. Another important fact per year to the Mediterranean, and the other is that Turkey is historically obliged to work is Turkmenistan-Turkey-European Natural for the signing of FTAs between the EU and Gas Pipeline Project which shall transfer the Black Sea Economic Co-operation project 30-35 billion cubic meter natural gas per year. and the Economic Co-operation Organization. Today, the Caucasian and Central Asian In doing so, Turkey will increase the economic countries, with wider virgin resources in all experience, knowledge and successes which fields of economy, present an important have been achieved in the last two decades potential not only for Turkey, but also for (HA, 1996). Western and Eastern countries. Turkey has concluded more than two With the end of the Cold War, a new chap• hundred agreements within a broad range of ter was opened in the understanding and per• political, economic and cultural relations with ception of the Black Sea. Driven by Turkey, the Turkic Republics. These agreements cover the Black Sea Economic Cooperation scheme the fields of economy, trade, finance, industrial became a new vision for the region (see:

41 www.bsec.gov.tr) On June 25, 1992, the heads hauling, of state or government of eleven states met in broad manufacturing basis in need of Istanbul to sign the Black Sea Economic Co• restructuring, overhauling, moderni• operation Pact. Albania, Armenia, Azerbaijan, zation and commercialization. Bulgaria, Georgia, Greece, Moldova, Roma• In other words, the Black Sea Region wants nia, Russia, Turkey and the Ukraine wanted to be seen as the center of Eurasia with its to let the world know that the Greater Black enormous wealth of cultures and experiences Sea area with around 350 million people and and its unique geographic features which are vast natural resources such as gas, oil, coal, naturally linked with the Caspian Sea on the wood and ore deposits would be a new center one hand and the Mediterranean on the other. of gravity in the emerging new world order. It wants to be more than just an infrastructural Critical observers seem to assume that the hub for commerce and trade in the field of Black Sea Economic Cooperation has, at least natural energy resources, although this has so far, fell short of hopes and expectations been the almost single aspect which has been while the Organization itself is pointing to its able to carry the regional agenda of the Black potential and ever increasing visibility: Sea Cooperation partners into an element of an area of nearly 20 million km2, new global politics. Since this is inevitably an unsaturated market of 330 million linked with the potential and role of the people with supply well behind demand Caspian Sea region, the two areas are easily in the three principal economic sectors connected by the strategists of geopolitics and of agriculture, industry, services, geoeconomics as they have developed since the a foreign trade capacity of over 300 end of the Cold War in 1990 (Kiihnhardt, billion US Dollars annually, 2002). after the Gulf, second largest source of The Caspian, according to Love (1999), is oil and natural gas, thus important not only because of a potential rich in proven reserves in minerals and contribution it can make to world energy metals exploited, with underground markets, but also because the competition for potential even greater, its reserves reflects a wide-ranging network of major supplier of commodities in interrelated domestic, regional and global• international trade, scale rivalries, all of which are helping to

diversified and creative human re• re carve the geopolitical energy map of the 21 SI sources, scientifically qualified and century. scholarly disciplined, In geoeconomic terms, taking into account abundant lab or force, skilled and the states that are involved in the BSEC sys• unskilled, at competitive costs, tem, this region is a sphere of gravitation of endowed with Ohots Sea, Caspian Sea, many countries that, although not directly in• Azov Sea, Black Sea, Marmara Sea, volved with the Black Sea basin, have substan• Aegean Sea, Mediterranean Sea, Ionian tial economic and transportation interests Sea, here. Iran, Macedonia, the Federal Republic covers important sea lanes and occupies of Yugoslavia and Uzbekistan have put forward strategic location in maritime transport, applications to join BSEC. Austria, Italy, Is• ship-building, repairing and over- rael, Egypt, Slovakia, Tunisia and Poland par-

42 ticipate in the organization in the role of ob• future course of Turkey's relations, not only servers; Bosnia and Herzegovina, Kazakhstan, with the West, but also with the Eurasian Cyprus, Jordan, Slovenia and Croatia have countries, beyond the 21st century (Ogiitc;:ii, submitted applications to become observers. 1995). Thus, according to some views, a geography is present here that does not limit itself to just Discussion the Black Sea region but envelops a broad area from the Balkans to Central Asia and from the Geoeconomics is a science that aims to clarify Baltic to the Arabic states. This territory unites the foreign economic policies of states and to European, Asian and North African countries, describe the state's economic interests on the regardless of the heterogeneity and level of globe. It is a useful policy not only for the "big development of their civilizations. In practical powers" but also for the developing countries. terms, this means the creation of a trans-re• Neomercantilism and geomercantilism are the gional integrative formation. This is also the geoeconomic policies for states that can be first large integrative formation correspond• practiced according to their geographies and ing to the post-confrontational stage of devel• economic powers (lnan, 2004). While the "big opment of the world economy, which is able powers" (U.S.A., Gennany-E.U. and Japan) to unite countries with different political and practice "neomercantilist" policies, the economic orientations (Danko, 2004). "second orders" (Turkey, Brazil, etc.) of the Turkey, standing as it does at the geo-center geopolitical era, gradually practice "geomer• of the Eurasian world and at the juncture of cantilist" policies to increase their influence strategic energy transportation routes, is in the region and so on the globe. The destined to play a critically important rote in MERCOSUR, BSEC, ECO in the near future, any energy trade between the Eurasian (and with their potential, can exercise important some Middle Eastern) suppliers and the regional economic successes. Especially European consumers - a rote which requires Central Asia, the "heartland" of the geopolitical wisdom, creativeness and strategic thinking on era, can gain a real importance in the geoeco• the part of Turkish leadership given the nomic era, with coordinating Russia and Turkey. magnitude of the existing political sensitivities That synergy will also influence the economies and economic problems in the region. The of the Caspian region and Eastern Europe. pressure on Turkey (a major oil and gas Turkey is a key country as an economic and importer itself) from the oil and gas exporting political catalyst at the crossroads of Europe, sta tes of the Caspian region is expected to grow Middle East and Central Asia. stronger as these countries in need of hard On the other hand, the expansionism of currency would want to pump as much oil and "neomercantilists" would divide the region and gas as possible to the world markets. And the thus prevent the geomercantilist structuralism. ability of Turkish energy diplomacy in formu• The result of that, as Cohen defined, is a lating a viable response to this historic "shatterbelt" region. So the region itself would challenge is no doubt to affect profoundly the be an impediment for both the Eurasian and the Middle East economies.

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REGIONINĖS PLĖTROS GEOEKONOMINĖS POUTlKOS PRIEMONĖS: TURKIJA KAIP RYTŲ EUROPOS KATAUZATORlUS Sukru (nao Santrauka

Straipsnyje analizuojamas geoekonominių politikos kuria savo regionines geomerkantilines politikas ir priemonių poveikis ekonomikos augimui. Naujie• glaudesnius ekonominius ryšius su valstybėmis kai• siems laikams būdinga ne politinė ar ideologinė mynėmis. konfrontacija, bet ekonominė konkurencija. Šalys, Thrkijos strateginė ir geopolitinė reikšmė didėja. kurios yra geografiškai ir ekonomiškai artimos, su• Nuo praėjusio amžiaus devintojo dešimtmečio Thrki• formavo stiprius ekonominius ryšius, o ekonomi• jos augimas ir i pramonę orientuota politika trans• niai blokai užima politinių blokų vietą. Geoekono• formavosi iš valstybinės j rinkos politiką. Parodoma miniame pasaulyje išsivysčiusios valstybės taiko Thrkijos svarba regiono plėtrai, jo geoekoRominei po• neomerkantilines politikas besivystančių šalių at• litikai energijos, prekybos ir investicijų srityse. Turki• žvilgiu, o atsakydamos i tai besivystančios šalys, ja, jvardijama kaip tiltas tarp Rylų ir Vakarų, galėtų kurios buvo "antros rūšies" ar "vidutinės galios", vaidinti labai svarbų vaidmeni.

[teikia 2004 m. /apkrilio mėn.

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