THE EUROPEAN TRANSFORMATION OF MODERN TURKEY THE EUROPEAN TRANSFORMATION OF MODERN TURKEY BY KEMAL DERVIŞ MICHAEL EMERSON DANIEL GROS SINAN ÜLGEN CENTRE FOR EUROPEAN POLICY STUDIES BRUSSELS ECONOMICS AND FOREIGN POLICY FORUM ISTANBUL This report presents the findings and recommendations of a joint project of the Centre for European Policy Studies (CEPS) and the Economics and Foreign Policy Forum (EFPF) of Istanbul, which aims to devise a strategy for the EU and Turkey in the pre-accession period. CEPS and EFPF gratefully acknowledge financial support for this project from the Open Society Institute of Istanbul, Akbank, Coca Cola, Dogus Holding, Finansbank and Libera Università Internazionale degli Studi Sociali (LUISS). The views expressed in this report are those of the authors writing in a personal capacity and do not necessarily reflect those of CEPS, EFPF or any other institution with which the contributors are associated. ISBN 92-9079-521-0 © Copyright 2004, Centre for European Policy Studies. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior permission of the Centre for European Policy Studies. Centre for European Policy Studies Place du Congrès 1, B-1000 Brussels Tel: 32 (0) 2 229.39.11 Fax: 32 (0) 2 219.41.51 e-mail: [email protected] internet: http://www.ceps.be Contents Preface .................................................................................................................. i Introduction ........................................................................................................ 1 1. The Evolving Nature of the EU and Turkey.......................................... 3 1.1 What Union would Turkey enter?.............................................................. 3 1.2 What Turkey would enter the Union?........................................................ 6 2. Democracy and Human Rights .............................................................. 9 2.1 From republican origins to democratic transformation............................ 10 2.2 Driving forces of democratisation in the 2000s ....................................... 13 2.3 The EU-driven political agenda ............................................................... 16 2.4 Policy conclusions ................................................................................... 21 3. Justice and Home Affairs ...................................................................... 26 3.1 External border protection and migration control .................................... 27 3.2 Readmission agreements and asylum....................................................... 32 3.3 Visa policy ............................................................................................... 34 3.4 Policy conclusions ................................................................................... 40 4. Foreign and Security Policy ................................................................. 44 4.1 Outline of the arguments.......................................................................... 44 4.2 Instruments of Turkish foreign and security policy ................................. 47 4.3 Priority regions......................................................................................... 54 4.4 Policy conclusions ................................................................................... 62 5. The Economics of Turkey’s Candidacy ............................................... 65 5.1 Introduction.............................................................................................. 65 5.2 How much will it cost? ............................................................................ 67 5.3 Trade integration...................................................................................... 71 5.4 Human potential....................................................................................... 76 5.5 Agriculture ............................................................................................... 82 5.6 Financial markets ..................................................................................... 89 5.7 The quality of institutions ........................................................................ 95 5.8 Outlook for growth................................................................................. 100 5.9 Conclusions............................................................................................ 106 6. Conclusions........................................................................................... 108 References........................................................................................................ 111 About the Authors .......................................................................................... 114 EU-Turkey Working Papers.......................................................................... 116 List of Tables Table 3.1 Entry into Turkey of persons from the former Soviet Union, 1964 to 2003.................................................................................. 36 Table 3.2 Entry of persons into Turkey from the Middle East and the Balkans, 1964 to 2003.................................................................................. 38 Table 5.1 Maximum budgetary cost, full membership.................................. 71 Table 5.2 Turkey’s trade integration relative to other European economies . 73 Table 5.3 Employment, 15-64 age group and total employment population (15-64) 2002.................................................................................. 80 Table 5.4 Total expenditure on education and adult population with upper secondary education ...................................................................... 81 Table 5.5 Percentage of the population that has attained at least upper secondary education, by age group ............................................... 81 Table 5.6 Sectoral gross value added per person employed, 2000 (thousands of current euros) .......................................................... 82 Table 5.7 Job status of agricultural employment, 2000-03............................ 86 Table 5.8 Employment and education in agriculture and the rest of the economy, 2003 (percent)............................................................... 87 Table 5.9 Where does Turkey’s foreign debt come from? ($ billions).......... 93 Table 5.10 Who has to pay for Turkey’s foreign debt?................................... 94 Table 5.11 Indicators of the quality of governance ......................................... 96 Table 5.12 Turkey’s long-term growth performance in a long-term perspective................................................................................... 101 Table 5.13 Factors boosting potential growth in GDP per capita (in % per annum)......................................................................................... 104 List of Figures Figure 5.1 Trends in openness for Spain and Turkey ..................................... 72 Figure 5.2 Demographic dynamics compared: Turkey vs. ‘old' Europe......... 77 Figure 5.3 Demographic bonus: Change in potential labour force (25-65) as a percent of total population...................................................... 78 Figure 5.4 Rule of law and income among EU-27 ......................................... 97 Figure 5.5 Change in composite quality of government indicator, 1996-2002...................................................................................... 98 Figure 5.6 Turkey’s growth record, 1990-2004............................................ 102 Figure 5.7 National savings as a % of GDP.................................................. 105 List of Boxes Box 2.1 European and Turkish legal codes on adultery.............................. 20 Box 4.1 Turkey’s possible assets for EU foreign and security policy......... 46 Box 4.2 Potential convergence, complementarity or otherwise of EU and Turkish foreign policies in major theatres of operation.......... 55 Box 5.1 Agricultural subsidy reform of 2000 and beyond.......................... 84 Preface his publication is the product of a joint venture between CEPS and the Economics and Foreign Policy Forum (EFPF), a recently-founded Tresearch institute in Istanbul. We have created a research team that combines analysts from both the EU and Turkey for the express purpose of ensuring that both points of view are reflected in the analysis and conclusions. It seems that many contributions to the heated debate on Turkey’s suitability as a candidate for EU membership only take into account the EU’s point of view. This study is an attempt to correct this imbalance. This book was written by a group of four authors, two from CEPS and two from EFDF, but it is based on the results of a major research project involving a much larger team consisting of over a dozen researchers from both institutions (see biographical notes on pp 114-115.) The results of this research have been published in a new series of EU-Turkey Working Papers (listed at the end of this book) that are available for free downloading from the CEPS website. The authors of the present volume have drawn liberally, at times verbatim, from the individual working papers. We thank the other participants in the project for their valuable contributions. Finally we wish to express our gratitude to the sponsoring organisations that made this effort possible