Turkey’s appetites to be the European since when it was an Empire of Ottomans is still being pushed back as far as edged it to the East. Turkish political ties with West countries come strategically while Communism threats against Turkey and Greece was confronted by Truman Doctrine (in 1947) which began a new era in US-Turkey relations. U.S military aids and accepting Turkey’s admission by NATO allies brought them closer but mostly served base on military and security supports which didn’t spread to political and economical reforms what was necessitous for accepting its application to EU.
After the World War II, Turkish political condition was involved in several coups and its stagnant economy was mostly affected by import and protectionism strategies. Turgut Ozal’s far reaching reformative program to shift Turkish economy toward export-led growth was the main first step which while followed by Turkish application to European Union and later entering the EU Custom Union, began improvements smoothly but not enough as much as required.
Meanwhile, Ozal’s reforms improved Turkish economy smoothly during 1987 to 2002. Thestate export was over tippled and reached to $36 billion and import was raised to $51.5 billion (about 2.5 times 1991). By this duration, EU members become the main Turkish economical partner, their share in Turkish export was more than 56% and the imports to Turkey with EU origins was over 50% in 2002(1). Foreign Direct Investment in Turkey was increased smoothly and reached to $1,082 billion, about double of beginning of the period, where share of EU members were 42.05% ($455 million) (2). The improvements occurred but were poor to save Turkish economy. Continuity the crisis followed by 2001 financial crash resulted in a transition in parliament and government to a recent “Justice and Development Party(AKP)”. New lira unveiling, reforms regarding freedom of speech, Kurdish language rights, reducing political role of armies, banning death… were resulted in opening Turkey accession talk to EU which increased hopes in both sides of west countries and Turkey.
Accordingly,EU-Turkey economic relation was expended rapidly and total trading amount increased from $46 billion in 2002 to $62 billion in 2003 and $154 billion in 2011 where reached to $157 in 2014 (1) and later to $165 in 2018(3), about 4 times during 15 years. Also, Turkey received more than $193 billion FDI during 2002 to 2017 while it was just $15 billion for 1973 to 2002, means around 13 timed in a half of period of time where the EU share in this investment is more than 45%, US share is about 9.3% and Japan’s is 2.00% while China’s share is just 1.26% and Russia’s is 6.1% (both are less than each of US, Netherland or U.K). The international companies registered in Turkey, also increased from 5,600 in 2002 to 58,400, about 11 times more (4).
So, the Turkish economic was grown amazingly and west countries’ share was essential but while Turkey’s application wouldn’t be finalized by EU members, Turkey turned to left, maybe to push EU members or it was a conceptually change in its ruling system from 2011 which accelerated from 2014, anyhow the results reacted soon, the Lira dropped rapidly (from 2.7 in 2016 to about 7 for one USD in 2018) and economic growth was slowed.
Despite the common commercial interests and partnership in NATO, the relations of Turkey with EU and US, experienced a lot of difficulties. Ruling the AKP after 2002 and its attempt for establishing the political and economical reforms, especially aligned to west values including human rights, minorities rights…, revived hopes for both sides especially in Turkey to join EU community finally but everything damaged and got back. Internal wars with PKK sparked, elected mayors in Kurdish provinces were suspended, HDP’s members and parliamentarians were arrested, the tensions with west countries was intensified after Turkish coup in 2016, Turkey’s unprecedented crackdown on participants and their allies in the coup as well as imposition of emergency rule encountered by Germany sanction and its limits on export guarantees to Turkey, Dutch journalists detained and deported, US NASA former scientist sentenced for 7 years (but freed after 2 years) (5), US pastor was detained which inevitably faced with Trump tariff war on Turkish steel and aluminium which affected the Turkish Lira fast to record a historical exchange rates and forced Turkey to solve the issue, as well as, Turkey threatened to enter the east of Euphrates River against Kurdish YPG / SDF forces who are backed by US forces. also, Turkey interferes in Libya and finalized the S400 contract with Russia and received them despite all US warnings. It canceled Istanbul mayor election (where AKP got a bigger loss in second round), frequently forced US for the “safety zone” in its borders with Syria and recently followed a plan for “illegal” drilling for oil and gas in waters close to Cyprus (as EU claimed) which seems would be confronted by EU more seriously than previous cases.
While Turkey expands its relations with Russia and China rapidly, it leaved West values and its challenges with the West countries are expanded by the same rate. Turning Turkey to the East is not just politically, it’s also grown to the ruling and economic systems. Turkish government denied democratic results and suspend mayors or cancel the election (as done in Kurdish provinces and Istanbul), also tried to affect on Central bank and change the interest rate which appeared in TRY exchange rate. Then, the Turkish economy will be the first victim of the turn to East, not only because it was established due to Turkey – West relations, but also because affects of eastern decision gwhich could destroy it within just years and led Turkey to public uprising, now it’s up to AKP’s strategy regarding foreign relations and internal policies, if it remain united with no split by some powerful leaders.
1- POLICY DEPARTMENT, EU Parliament, (2016), “Bringing EU-Turkey trade and investment relations up to date?”, Page 21
2- POLICY DEPARTMENT, EU Parliament, (2016), “Bringing EU-Turkey trade and investment relations up to date?”, Page 23
3- TURKEY AND THE EU, Ministry of Trade, Republic of Turkey (September 5, 2018)
4- Investment office, Presidency of Republic of Turkey, FDI in Turkey
5- DW news
6- Euronews (August 17, 2019).
Alibaba on Platform Economy
Alibaba on national mobilization of
entrepreneurialism on platform economy: today, Alibaba sold $38 Billion within 24
hours: Around the world, currently, there are 100 nations with less than $38
Billion dollars in annual GDP. Imagine if this single company performed at the
same rate for next 365 days, it would equal to annual GDP of Japan, Germany,
India, France, UK and Canada all combined. Bravo Alibaba, well done, the world in shock
is now fondling in own toolboxes.
Are Nations Awake: Are there enough reasons to explore how national mobilization of entrepreneurialism on platform economies and how it will uplift local grassroots prosperity? Are there enough trade-groups, Chambers of Commerce, Trade Associations with enough skills to play in these AI centric digitally advanced and globally friendly market-places? Outside a miniscule number most seriously out-dated trade-groups are in rapid transformation so they too would become shiny butterflies for the new global-age.
Old days of old ways are now new days of
Salvaging of exportability lost during last decade: Nation by nation, the grassroots medium-size economy was basically, ignored, abandoned and rejected, killing exportable goods and services. So long the trade groups around the 200 nations stuck in their old fashioned comfort zones spanning a century, outside handful organizations most nations are in deep trouble. Observe how nations with riots have the most disorganized, disconnected trade-groups, not due the lack of funding but due to lack of poor leadership with little or no global age skills.
Uplifting working-citizenry after a lost
decade on skills: So long the national leadership assumes that MBA degrees are
the saviors of their next economy and so long the corporations feels comfortable
that all their management is being well trained on YouTube, no additional proof
of this fallacy is necessary other than decimated economies and chaos on the
Understanding The Third Economy: During the first economy; rules of engagement and rules of balancing the books were established, the second economy; where fancy jargon was invented to cook the books to balance with political agenda and now the upcoming third economy where real numbers will balance the real books with real columns all managed by artificial intelligence and block-chain delivering honest picture instantly to all and all the times.
Alibaba proves the direct benefits of a Third Economy; such prosperity can only assured by respecting the balancing of pennies and cents with mobilizing millions of abandoned small and medium enterprises and using free technologies as starting base. Such deployments are only possible when leadership is skillfully equipped to understand global-age and able to serve the special transformation demands, by firing the first person for incompetence for saying they have no new funding to change and firing the next person for disorganization for saying they are too busy and have no time to change.
Public sector around the world had almost all
these resources available to deploy since last decade. Nation by nation, outside
the top business sectors rest of the small medium enterprise players
systematically abandoned and crushed were replaced by too big to fail nonsensical
hype. Now national races in the age of digital platform economy will demand
clarification on their internal conflicts of “digital-divide and mental-divide” and explain dysfunctional imbalanced spending on trade expansion
without “national mobilization of entrepreneurialism” …it is also a fact that
majority nations need massive in-depth-training at all top leadership levels to
understand the new language of the new days.
It’s time to choose; either build world-class export promotion agencies, vertical trade groups to foster trade by global-age showcasing on platform economies and bring home some grassroots prosperity or allow restless citizenry and rise of populism. It time to balance, that where public sectors mostly all over the world failed on such progressive affairs, technology has now blossomed as salvage operation with dramatic tools and deployment options. Is your national leadership ready now? Not to sidetrack, this is not an exclusive IT issues; this is global age expansion and entrepreneurial mobilization issues. Deeper studies and debates are essential.
The world is changing fast is no longer just a cliché, now growing into a warning
National Transformation: Futurism of ‘creating local grassroots economy’ demands two distinct national mobilizations. Firstly, creating skilled citizenry capable to swing with global-age demands and secondly, creating massive digitization of midsize economy to enable global-speed-performance to match trading with 100-200 nations. Mostly not new funding dependent but execution starved. Nations with such mastery will thrive and lead; generational transformation at magical speed with full deployments of platform economy is a prerequisite. Sounds rocket science, it is, but very doable and easy.
Rules of National Mobilization of Entrepreneurialism: To deploy such blueprints, launch a nationwide business-uplifting lifelong learning agenda for the entire export promotion bodies, Chambers, trade associations and also the entire small-medium-exporters base. Review this process meticulously every 100 days. Under right situation, the export promotion of the nation can easily quadruple within a year. It is necessary to keep asking what is blocking this and who is stopping this?
How do you mobilize public and private sector leadership after a lost decade on global-age expansion? With some 100 elections in 2019 alone and million promises on podiums the realities are hidden in creating real grassroots prosperity, now pending Presidential Elections of 2020 USA the mother of all elections will provide massive debates amongst calls of Impeachments, while December 12th Election of UK amongst calls of Brexit and European Union with loud and restless citizenry, a new world is unfolding. The public is informed, and slowly realizing what’s working and what’s not… deep silence at the public sector is not good, a growing sign of lack of skills. Urgent debates needed as 2020 starts with some dramatic shifts of markets, ideas and visions. We are now in the age of national mobilization of entrepreneurialism and platform economies.
China’s Descending Rise
China is in a sustained economic slowdown. This is causing malignant unease among the political and economic leadership of the communist party in Beijing that governs China. Investing in China will be different, because:
“The country’s first sustained economic slowdown in a generation. China’s economic conditions have steadily worsened since the 2008 financial crisis. The country’s growth rate has fallen by half and is likely to plunge further in the years ahead, as debt, foreign protectionism, resource depletion, and rapid aging take their toll.”
Chinese social structures are under duress over their aging society. Formerly in the 1990s-early 2000s: “China had the greatest demographic dividend in history, with eight working-age adults for every citizen aged 65 or older.”
Once societies age, marital numbers decrease, and overall productivity plunges. China’s explosion of older citizens versus working-age will bring unique circumstances for global consumers. Factual evidence of slower productivity is evident throughout China, and will have to be considered for any financial or economic decision for decades ahead. The Chinese economic miracle bursting is largely due to aging demographics.
No one in western or eastern economic analysis circles or think tanks realistically saw this coming former President’s Deng Xiaoping opening of China. This was termed, “Socialism with Chinese characteristics (and/or) ‘socialist market economy,’” still ongoing. This slowdown will have deep ramifications for the global investment community, liberal order in place for over seventy-five years, and Chinese financial wealth that now spans the globe.
When countries age, and use reproductive rights to control populations, they become more assertive abroad, and repressive to its citizenry; this describes China’s social, political and economic philosophies that govern over a billion people. Since its one-child policy was enacted, Chinese economic productivity will plummet, “because it will lose 200 million workers and young consumers and gain 300 million seniors in the course of three decades.”
Suppressive economies have difficulty innovating, producing enough goods domestically, and integrating into world economic mechanisms that intends to distribute wealth globally. But this isn’t the first time these warnings have been made publicly.
Former Premier, Wen Jiabao gave a prescient declaration in March 2007 during the long march of economic progress when Mr. Jiabao had misgivings about China’s growth model by stating, “(Chinese growth had become) ‘unsteady, unbalanced, uncoordinated and unsustainable.” Recent numbers indicated China’s official GDP “has dropped from 15 percent to six percent – the slowest rate in 30 years.”
Expansionary Chinese growth hasn’t experience this level of downturn since the end of the Mao into post-Mao era. What this does for the Belt and Road Initiative that is paving the way for investments into Central Asia up to the Arctic Circle is uncertain? Deep investment difficulties could witness China stopping the flow of billions of infrastructure projects into countries and continents such as Africa desperate for growth.
Public figures from the Chinese government generally have the economy growing at six percent, but many analysts and economists peg the number(s) at “roughly half the official figure.” China’s GDP has consisted of bad debt that typical financial institutions and western governments will transfer from the state to public sector and ultimately costs passed onto consumers. For China’s wealth to increase when so much domestic wealth is spent on infrastructure projects to increase GDP these official numbers need context.
China has bridges, and cities full of empty office and apartment buildings, unused malls, and idle airports that do not increase economic productivity, and if that isn’t the case then infrastructure increasing economic measurements will decrease. Unproductive growth factors officially known are: “20 percent of homes are vacant, and ‘excess capacity’ in major industries tops 30 percent.” According to official Chinese estimates the government misallocated $6 trillion on “ineffective investment between 2009-14.” Debt now exceeds 300 percent of GDP.
What’s discovered is the amount of China’s GDP growth “has resulted from government’s pumping capital into the economy.” Private investments have trouble overtaking government stimulus spending, and Foreign Affairs ascertains “China’s economy may not be growing at all.”
Chinese economic growth – post-Mao – saw the country’s self-sufficiency in agriculture, energy, and water almost complete by the mid-2000s. Through economic malfeasance, population control, and resource decimation, “water has become scarce, and the country is importing more food and energy than any other nation.” Environmental degradation is destroying the basic necessities for every day survival.
This is where the world community and financial resources of east and west can meet needs, and grow interconnected, global economies. Energy is one of the biggest areas that China will engulf global energy supplies
The U.S. Energy Information Administration believes China will continue being the largest natural gas user in non-OECD Asia, and by 2050:
“Expects that China will consumer nearly three times as much natural gas as it did in 2018. China’s projected increase in natural gas consumption is greater than the combined growth of natural gas consumption in all other non-OECD Asian countries.”
Opportunities for liquid natural gas (LNG) facilities to be built globally, and in China to spur domestic and international economic activity are unlimited. As China goes, so goes Asia, and the world is now in the “Asian Century.” Investors, geopolitical strategists, and anyone concerned with global security should never believe it is wise to let China continue to falter economically and societally. Setting up investment mechanisms and diplomatic vehicles that benefit China, and the world community is a prudent choice.
When military choices defeat sound fiscal and monetary polices, the past 150 years have brought “nearly a dozen great powers experienced rapid economic growth followed by long slowdowns.” Normal, civilized behavior was pushed aside. What’s needed for Chinese economic growth is the free flow of information, managed wealth, consumer goods, and research/innovation.
Decades ahead, and current economic realities point to China being a great power that is under pressure, but still needs capital. A weak, unsecure China who isn’t satisfied with its place in the Asian hemisphere or global economic system isn’t good for continued prosperity. It would be smarter to engage and invest within China in the areas of energy, water, agriculture, and electricity where opportunities still abound.
Agribusiness: Africa’s New Investment Frontier
Authors: Mariam Yinusa and Edward Mabaya*
In the past decade, a stroll along the aisles of any African supermarket is revealing: there is a new wave of home-brewed brands that are fast becoming household names. Products like Dangote rice from Nigeria, Akabanga pepper oil from Rwanda and Tomoca coffee from Ethiopia attest to the gradual but persistent evolution towards greater agro-processing and value addition in the domestic agriculture sector.
Africa’s agribusiness sector is expected to reach $1 trillion by 2030, so there is certainly cause for optimism. Consumer demand for food in Africa is growing at an unprecedented rate. But what is fuelling this growth?
First, size matters. At a population of 1.2 billion people, Africa is currently the second most populous continent in the world, superseded only by Asia. According to United Nations projections, Africa’s population could reach 2 billion by 2030 and 2.5 billion by 2050. This means that one in five consumers globally will be African.
Second, quality counts. Sustained GDP growth rates in several countries across the continent have translated into rising incomes for some segments of the population. According to the African Development Bank’s African Economic Outlook Report, the middle-class population is expected is projected to reach 1.1 billion by 2060 which will make up 42% of the population. The average African middle-class consumer is becoming relatively more affluent, sophisticated and discerning in the food they choose to buy and eat. Concerns about price/quality trade-offs, convenience, nutritional content and food safety, amongst others, are central in their minds.
Third, concentration can be powerful. Although most growth poles are small to medium cities, megacities with populations of over 10 million inhabitants, such as Cairo, Lagos and Kinshasa, have gained increased prominence. These metropoles offer ripe opportunities for investment, as a result of the triad of high consumption, concentrated spending power, and agglomeration (i.e. lower and fixed distribution costs).
On the supply side, there is significant untapped potential. Over 60% of the world’s uncultivated arable land is in Africa.
Policy makers recognize the huge opportunities these trends present and are making concerted efforts to create and maintain an enabling business environment to attract both local and foreign investors. The African Development Bank is at the forefront of this coalition of the “ready” to transform African agriculture.
Under its Feed Africa Strategy, the Bank is supporting its regional member countries to address both demand and supply side constraints along agricultural value chains. Through initiatives like the Technologies for African Agricultural Transformation (TAAT), the Bank is boosting historically low yields in priority commodities such as rice, maize and soybeans. In Sudan for example, the TAAT-supported heat-resistant wheat variety has increased wheat self-sufficiency from 24% in 2016 to 45% in the 2018-2019 farming season.
At the same time, Special Agro-Processing Zones (SAPZs) are attracting both hard and soft infrastructure and creating value addition to increased agricultural produce. Together with partners, including Korea-Exim Bank and the European Investment Bank, the African Development Bank has invested $120 million in SAPZs in Guinea, Ethiopia and Togo, which will significantly expand local agro-processing activities along numerous agricultural value chains.
Along with these key investments in Africa’s agricultural value chains, the continent is starting to consolidate its wins. A case in point is regional integration, exemplified by the recent ratification of the African Continental Free Trade Area (AfCFTA), which has the potential to make Africa the largest free trade area in the world.
Agribusiness has already caught the eye of investors. Last year, it was one of the main attractions at the inaugural Africa Investment Forum conference, which is becoming the continent’s premier marketplace for global and pan-African business leaders, and an innovator in accelerating deals.
Agriculture was one of the nine sectors that attracted investor interest at the 2018 Africa Investment Forum. The sector held its own against big hitters like financial services, infrastructure, energy, and ICT. One such transaction was the Ghana Cocoa Board (COCOBOD) deal in which $600 million loan financing was mobilized from the African Development Bank and other investors to boost annual production of cocoa beans from 880,000 tons to 1.5 million tons. Within the next three years, the project is also expected to promote growth in the domestic cocoa value chain by increasing processing capacity two-fold from 220,000 tons to 450,000 tons per annum.
Africa’s expanding consumer base will undoubtedly lead to more spending on food and beverages on the continent. This should be enlightening for would-be investors in food processing and value addition ventures.
The front door to these opportunities is the Africa Investment Forum, scheduled for November 11-13 in Johannesburg, South Africa.
*Edward Mabaya, Principal Economist and Manager, respectively, in the Agribusiness Development Division of the African Development Bank.
The Luxury Collection Makes A Landmark Debut In Qatar
The Luxury Collection today announced the opening of Al Messila, A Luxury Collection Resort & Spa in Doha, marking the...
Turkey begins the return of ISIS fighters to Europe
Today, Turkey started sending ISIS fighters back to Europe, as it promised last week. Europe needs to take responsibility for...
Alibaba on Platform Economy
Alibaba on national mobilization of entrepreneurialism on platform economy: today, Alibaba sold $38 Billion within 24 hours: Around the world,...
Eastern Partnership Countries: Buffer Zone or Platform for Dialogue?
2019 marks the 10 th anniversary of the Eastern Partnership, a political initiative the EU launched in 2009 for developing...
ADB to Help Improve Rural Water Supply, Sanitation in Kyrgyz Republic
The Asian Development Bank (ADB) has approved a $27.4 million financing package to provide safe and reliable water supply and...
The efficiency of German contribution in the Afghan peace process
Germany is heavily involved in the afghan affairs since 9.11.2001; the country has brought in to being the modern Afghanistan...
IRENA Facilitates Investment and Renewable Projects on Ground in Africa
Boosting renewable energy projects on the ground requires scaling up investment. IRENA’s state-of-the-art analysis of enabling policy frameworks and finance...
Terrorism3 days ago
The Rise OF ISIS and its Aftermath in Afghanistan
International Law3 days ago
Schweitzer’s ‘Reverence for Life’ In the Age of Trump and Modi
Tech News3 days ago
Building Emerging Technology Governance Key to Realizing Saudi Arabia’s Vision 2030
Europe3 days ago
30 years after 9/11: How many Germanies should Europe have?
Reports3 days ago
Africa’s energy future matters for the world
Energy News3 days ago
IRENA Concludes its Eighteenth Council
Americas2 days ago
Leftists make a comeback in Latin America
EU Politics2 days ago
EU-Singapore agreement to enter into force on 21 November 2019