YEAR 2020: TURKISH DELIGHT?

Monita Pesumal checks the role played by an emerging ‘middle power’ located between Asia and Europe

Two words; or better yet, make that three proper nouns – Recep Tayyip Erdoğan, the man in central command of a nation perched on two mighty continents. Turkey’s strategic location has made it a major player in the region’s geopolitical landscape, providing the nation and its president control over the entrance to the Black Sea.

Erdoğan spent 11 years as Turkey’s prime minister and went on to become the country’s first elected president in August 2014. To  loyalists,  he has placed Turkey on the map of economic growth and prosperity. However, his critics say Erdoğan is an autocrat. In April 2017, he narrowly won a referendum to extend his powers.

As a member of the G20 industrialised and advancing economies of the world, Turkey is currently ranked the world’s 17th largest economy. Its economic performance and social development since the turn of the millennium has been inspiring, leading to increased employment opportunities and rendering Turkey an upper middle income country.

Classified in the ‘very high human development’ category for the second time in a row, Turkey is ranked 54th among 189 countries and territories. Despite the COVID-19 pandemic, the Turkish Statistical Institute reported that Turkey’s economy grew by 6.7 percent year on year in the third quarter of last year.

Bur in the past few years, growing challenges and a harsher external environment have threatened to undermine these achievements. Erdoğan announced a TL 100 billion relief package to limit the economic fallout from the coronavirus in April but amid the pandemic, the Turkish Lira plunged by 30 percent against the US Dollar in 2020.


The slide comes as investors are worried over falling forex reserves and the central bank’s ability to tackle double digit inflation. In early November, the lira soared by nearly six percent after the surprise departure of both the finance minister and central bank governor. While the governor was replaced, the Turkish Finance Minister Berat Albayrak – Erdoğan’s son in law – resigned for health reasons.

In another economic blow, the US imposed sanctions on Turkey over its acquisition of the Russian S-400 missile defence system in December. The sanctions target Turkey’s Presidency of Defense Industries (SSB) including its top officials. However, Erdoğan was quick to send a congratulatory message to then President-elect Joe Biden, saying he hoped the poll outcome would benefit the “friendly and allied” people of the US.

Traditional agricultural produce such as berries, vegetables, olives, sugar beets, nuts, grains and pulses, and citrus fruits account for less  than 10 percent of Turkey’s economic output. Its economy is powered by a healthy mix of industry, services and commerce. In August, Turkey announced the discovery of the largest natural gas reserves in the country’s history in the Black Sea near the Turkish coast, paving the way for more economic growth.

But from a surplus in the previous year, the current account fell back into a deficit as exports were affected by weaker demand. The deficit was US$ 20 billion in the first half of 2020 as exports fell by 21 percent year on year while imports declined by four percent. Economic growth could recover to four percent in 2021 and 4.5 percent in 2022.

Turkey’s textile and apparel industry deserves mention as it continues to be the largest economic sector. It employs millions either directly or indirectly in cotton milling, woollen yarn spinning, fabric making involving synthetic fibres and silk looms, knitwear, leather, footwear production and of course, tuft and felt making, for those luxurious Turkish carpets and rugs.

The Republic of Turkey is the sixth most visited country in the world. Over 45 million tourists arrive annually to explore the country’s rich culture and ancient heritage, shop in the grand bazaars and spice markets, indulge in grilled chunks of doner kebab or marvel at the mosques and palaces of former sultans.

As for iconic landmarks, in a highly controversial and nonconformist act, in July last year a Turkish court annulled a 1934 cabinet decree that made Istanbul’s Hagia Sophia a museum, opening the way for its use as mosque.

Turkey’s flag carrier Turkish Airlines remained its most valuable brand in 2020, according to a leading London-based independent branded business valuation and strategy consultancy firm, which says its brand value rose from 1.7 billion dollars in 2019 to nearly US$ 2 billion in 2020.

Meanwhile, Turkey’s response to the influx of some 3.6 million Syrian refugees has been exemplary – it is a model for other countries hosting refugees including in the EU.

Joining the EU has been Turkey’s longstanding aspiration. Membership talks were launched in 2005 but have stalled over serious issues about Turkey’s human rights record and matters concerning the territorial dispute with Cyprus – a divided island since 1974 when Turkey invaded the north in response to a military coup that was backed by the Greek government.