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 market-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-mercantilism, 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