Wednesday, November 9, 2011

G-20: Let's Talk Turkey

Oh how the times change. This past week's G-20 summit in France proved that there's a new "Sick Man of Europe," and it's certainly not Turkey.

As ArabNews.com reports, The "Sick Man" is actually the "Sick Men-" the consortium of troubled Eurozone economies that includes Greece, Portugal, Ireland, Italy, and perhaps even Spain. The Cannes gathering mainly focused on the European debt saga that just seems to grow worse, and amid the European panic, Turkey played it cool. France's Nicolas Sarkozy met with Turkish President Abdullah Gul to agree on a broad platform of domestic as well as international financial reforms, and it was also announced that Turkey will play host to the G-20 meeting in 2014. The real story however, came after Cannes. Planning for the future, traditionally Westward-looking Turkey has taken note of the tumult in Europe and is now opting to diversify its trading partner portfolio.

The stable Erdogan government boasts the 17th largest economy in the world and at the beginning of 2011, Turkey recorded a 10.3 percent double-digit growth rate while many Western powers stood at the brink of a double-dip recession. And this is likely to continue. Turkey has a robust population of 70 million with the youngest average age in Europe at 29, and its diverse economy remains attractive to foreign investment.

Situated at the crossroads of east and west, Turkey has a geographic advantage when it comes to trade. As an Islamic state with a staunchly secular government, Ankara has no problem wooing both the Europeans and its partners in the Middle East. Nearly any any energy deal or pipeline from the Caspian to Europe goes through Turkey, and as an associate member of the European Union with a Customs Union agreement, it runs little risk of falling to Russian political manipulation like the Gazprom shenanigans up north in Ukraine. But with so much drama unfolding to the west with Europe and the east with the revolutions of the Arab Spring, Turkey has turned its eye outside its immediate region and has found a kindred secular spirit in Southeast Asia.

Turkey and Malaysia, while both secular regimes, have strong financial sectors that conform to Sharia law. This particular brand of 'Islamic Banking,' prohibits usury and investment in goods or services that are considered contrary to Islamic principles. Recently, Turkey and Malaysia have signed agreements to increase trade and work together on originating Sukuk, the bonds unique to Sharia-style finance. Malaysia has a dual banking center that trades both Islamic and customary financial assets. Turkey, looking to open up its own financial sector, can look to Malaysia for guidance and support.

At a G-20 rife with gloomy financial woes, Turkey has emerged as one of the few points of optimism, and Ankara's shrewdness predicts its continued success.

-Rachel

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