ZYPRIOTISCHE ERNÜCHTERUNG

Zyperns Aphrodite Felsen

DAS PLATZEN ÖKONOMISCHER TRÄUME BIETET DIE CHANCE FÜR AUßENPOLITISCHE LÖSUNGEN

Via DER STANDARD

Von Eric Frey

ZYPERN, das am 1. Juli die EU-Präsidentschaft übernimmt, ist der größte Sündenfall in der Geschichte der Union. Die Entscheidung von 2003, den Inselstaat ohne vorherige Lösung des Nordzypern-Konflikts aufzunehmen, war eine mehrfache Torheit. Sie trug einen ethnischen und geopolitischen Sprengsatz in die EU hinein, vergiftete die Beziehungen zum so wichtigen Partnerstaat TÜRKEI und nahm den ZYPRIOTEN außerdem jeden Anreiz, die für eine Wiedervereinigung notwendigen Kompromisse einzugehen. Mit dem Beitritt in der Tasche stimmten sie dann 2004 tatsächlich gegen den UN-Friedensplan. 

Diese Fehlentscheidung belastet EUROPA bis heute. Sicher ist ZYPERN nicht der einzige Grund dafür, dass die Beitrittsverhandlungen mit der TÜRKEI nicht vom Fleck kommen und auch sonst die Zusammenarbeit so wenig klappt. Aber es ist ein ständiges Reizthema, das den Obstruktionskräften in der TÜRKEI in die Hände spielt. Selbst in der Syrienkrise ist die EU behindert, weil Ankara wegen ZYPERN in vielen Bereichen der Außenpolitik die Kooperation verweigert. 

Nun erweist sich das angeschlagene EUROLAND ZYPERN auch wirtschaftlich als Mühlstein. Das selbsteingebrockte ZYPERN-Problem der EU und die Finanzprobleme der Region haben dabei die gleichen Wurzeln - nämlich die einstige Illusion wirtschaftlichen Erfolgs, der auf tönernen Füßen stand.

Der EU-Beitritt ZYPERNS war die Folge eines Kraftakts GRIECHENLANDS, das mit einem Veto gegen die gesamte Osterweiterung drohte, sollten die griechischen Brüder auf der Insel nicht mit aufgenommen werden. Dies geschah auf dem Höhepunkt des hellenischen Selbstbewusstseins, inmitten eines Wirtschaftsbooms, zwischen dem Eurobeitritt und den Olympischen Spielen in Athen. Heute würden die GRIECHEN mit einem solchen Machtspiel wohl scheitern - oder es erst gar nicht wagen. 

Auch die ZYPRIOTEN verharrten lange im Glauben, sie seien wirtschaftlich stark genug, um auf die Wiedervereinigung verzichten zu können. Doch der ZYPERN-Boom beruhte ebenfalls auf einer Blase, die nun geplatzt ist - und nicht nur wegen der vielen griechischen Staatsanleihen in den Büchern zypriotischer Banken. In dieser neuen Lage werden die ökonomischen Kosten der Teilung - Militärausgaben, Schwächen in der Infrastruktur - umso schwerer wiegen. Vielleicht würden auch die zypriotischen Wähler heute anders entscheiden als 2004. 

Doch sie werden nicht gefragt, ja es finden im ZYPERN-Konflikt nicht einmal Verhandlungen statt. Das ist ein Versäumnis. Denn wenn die Euroschuldenkrise auch etwas Gutes hat, dann das, dass das Platzen ökonomischer Träume den Weg für politische Lösungen freimachen kann.

Allerdings hat die TÜRKEI zuletzt genau jenes Selbstbewusstsein entwickelt, das GRIECHENLAND und ZYPERN einst hatten. Das lässt Premier Tayyip Erdogan in Nordzypern Härte zeigen. Aber auch die türkische Wirtschaft ist fragiler, als sie scheint - mit wachsenden Schulden und einem horrenden Leistungsbilanzdefizit. Und Erdogans außenpolitischer Ehrgeiz, gestärkt durch den Arabischen Frühling, stößt im Nachbarland SYRIEN immer mehr an seine Grenzen. 

Ernüchterung ist ein besserer Boden für politischen Pragmatismus als Euphorie. Doch um diese Chance zu nützen, braucht es in Brüssel - und auch in Washington - eine Willens- und Führungsstärke, mit der gerade wegen der Eurokrise nicht zu rechnen ist. 

ARGENTINEAN CENTRAL BANK TARGETS GROWTH, NOT LOW INFLATION

THE CENTRAL BANK OF ARGENTINA BREAKS RANKS WITH NEO-LIBERAL BANKING POLICY AND TARGETS JOBS OVER LOWER INFLATION

Transcript of YouTube video which can be viewed below

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington.

Most central banks around the world preach fiscal discipline. Inflation is their biggest concern. And even when they do enter into some stimulus policies, the final objective is still the issue of lowering debt. Well, one central bank in the world apparently has a growth agenda, and that's in ARGENTINA.

Now joining us to talk about this is John Weeks. John just was in ARGENTINA not very long ago. He's a professor emeritus at the University of London School of Oriental and AFRICAN Studies. He's the author of the book Capital, Exploitation and Economic Crisis. He runs JWeeks.org. And he now joins us again from London. Thanks, John.

INDEPENDENT MONETARY POLICY TENDS TO BE DEFLATIONARY, NEGATIVE RATES, AND SLOW GROWTH.

WEEKS: Thank you.

JAY: So what did you make of what the central bank's doing in ARGENTINA?

WEEKS: It's tremendously important, because in the 1990s ARGENTINA was the epitome of a neoliberal monetary policy. It had something called a currency board, and that currency board involves taking the foreign exchange you hold, which is, in the case of ARGENTINA, dollars, and that your domestic money supply is rigidly tied to the amount of dollars you hold. Of course, the amount of dollars you hold is a result of your imports and exports, the balance between the two, and so in effect you have no independent monetary policy. And it tended to be quite deflationary, that is, it tended to cause not only very low inflation, but actually negative rates, and also very slow growth.

INFLATION NO LONGER BECOMES A CONSTRAINT

At the end of the 1990s, the disaster that that policy had inherent in it was realized, and in 2001 and 2002 ARGENTINA could no longer maintain that policy, because what it meant, basically, is that if you began to lose dollars because you were—ARGENTINA was running a trade deficit, it meant you had to contract the economy, because you had to take your domestic currency out of circulation, more and more of your domestic currency out of circulation. And that led initially to a severe recession in the economy. When that could no longer be maintained and they temporarily went off the currency board, you had hyperinflation for a year.

Okay. The current government of Cristina Fernández has repudiated that policy. They have introduced a new central bank law (they had actually been practicing it, but they formalized it in this last March) which completely ends the currency board regime and replaces it with a central bank that facilitates a growth-oriented policy of the government. And it also is concerned about inflation, but inflation no longer becomes a constraint, the tail that wags the whole dog.

JAY: So how do they do that?

WEEKS: Well, the economy has grown very rapidly since the end of the currency board. It's grown at about 7 percent since the currency board collapsed in 2002. That has been brought about by the flexible monetary policy which was allowed within the confines of the old rules but was not sufficiently flexible to be sustained, but primarily through a government which pursued a policy of active fiscal policy, expansionary fiscal policy, combined with public investments in infrastructure.

INFLATION-TARGETING POLICY - COMPRESSING THE ECONOMY, REDUCING THE RATE OF GROWTH, IN ORDER TO KEEP THE RATE OF INFLATION DOWN

JAY: Okay. Well, what does that mean, "by flexible monetary policy," specifically?

WEEKS: Well, what it means now is that—an inflation-targeting policy is what most governments in LATIN AMERICA—well, no, that's true—VENEZUELA'S doesn't, and—nor does BOLIVIA, but many, many governments in LATIN AMERICA and, of course, the dreaded EUROPEAN Central Bank follow. That means you set an inflation target, usually a low inflation target. That happens to be 2.5 percent in EUROPE. And then, if it appears that the economy is going to exceed that rate, then you rein in the economy by using the central bank interest rate, by making it harder for businesses and for individuals to borrow. So that in effect means that you're compressing the economy, reducing the rate of growth, in order to keep the rate of inflation down.

FLEXIBLE MONETARY POLICY – GROWTH TARGET

A flexible monetary policy sets the rate of inflation consistent with a growth target. But that would be the simplest way. So instead of having an inflation target, you have a growth target. Say you have growth target of 5 percent, for example. Then it becomes a question of how much inflation you're going to allow with that growth target. And in the case of ARGENTINA, the government has been prepared to allow an inflation target upwards towards 10 to 15 percent, though it hasn't been that in every year. In most years it has been well below that, on the argument that it is more important for people to be employed and for them to have rising incomes and to have incomes that are rising faster than the rate of inflation so their real incomes are going up. So with the real incomes going up, you can live. You don't have to have a 2.5 percent or 3 percent rate of inflation, because you have a real economy expanding, so your money wages are expanding faster than rate of inflation.

INFLATION FROM ZERO TO 25 PERCENT DO NOT LEAD TO HYPERINFLATION

JAY: So the argument one hears against this is that it gets out of control and inflation starts growing faster than real wages, so there's no real advantage to workers. That's the argument that given.

WEEKS: Yeah. That's the argument. It says yes, a little bit of inflation leads to a lot. I would say that's similar to saying conventional war always leads to nuclear war. You know. Rapid inflation, high rates of inflation, are an entirely different phenomenon than what we're talking about. Rates of inflation of zero to 25 percent, all empirical evidence shows that rates of inflation from zero to 25 percent do not lead to hyperinflation. Hyperinflation results when there's some terrible breakdown in the economy, such as—in another interview I was talking about GREECE. If GREECE—if the GREEKS were to abandon the euro, they would get hyperinflation, because all of a sudden the whole institutional framework has changed so dramatically. Alright?

I'm not in favor of 20 percent inflation, but I'm in favor of growth. And so the question becomes managing inflation in the context of growth, not managing growth in the context of inflation.

JAY: So what are the numbers in ARGENTINA, then? What is inflation, and are wages keeping up with it?

25% UNOFFICIAL INFLATION RATE VERSUS 15% OFFICIAL INFLATION RATE IS A MATTER ON HOW IT IS MEASURED: HIGH AND LOW INCOMES OR GNP AS A WHOLE

WEEKS: Wages are keeping up with inflation. There's considerable debate about what the current rate of inflation is, less about what it's been in the past. The critics of the government say that the rate of inflation is about 25 percent. The government says it's about 15 percent. This is partly a question of how you measure it and whether you're measuring low incomes or high incomes or GNP as a whole.

The point, the central point, is not the exact rate of inflation but the fact that the economy is growing and real incomes are growing, that is, in real terms, in terms—when we say real terms, what I mean by this: how much is being produced, the goods and services being produced, the real things people are consuming, the amount of food they eat, the amount of durable goods they can buy are going up. And this is true of the working class and of the middle class. And that's partly, I should say, the result of the government's taxation policy to prevent inequality from getting out of control.

LOW INFLATION LEADS TO LOW GROWTH

Let me put this slightly in context. So you asked me, you said that the argument against [incompr.] quite correct—against permitting or tolerating a certain degree of inflation is: further along the road you're going to come to regret it, because inflation will grow faster than wages and then there'll be a decline in income. Turn that argument around. If you pursue low inflation, you have low growth. You can never recapture the growth you missed. You know. If you're in a country that this year grows at 2 percent when it could grow at 4 percent, you'll never get those two percentage points back. And if you have unemployment, as in the UNITED STATES, around 8 percent and you could have unemployment down around 5 percent, that 3 percent of the workforce that's unemployed this year, they will never get this year back. You know. So it's—I think raising the question of what is foregone as a result of allowing inflation is completely spurious. The real question is: what do you forgo as a result of having low growth and high unemployment?

JAY: Now, the other argument against this is what happens to people on fixed pensions. In ARGENTINA, are pension rates being raised at the same level as inflation?

BANKS GAIN FROM A LOW-INFLATION REGIME AND LOSE IN A HIGH INFLATION REGIME 

WEEKS: This is a somewhat complicated question, because there are public pensions and there are private pensions. It's difficult to pursue them all. But basically the answer is: yes, they are. But I think again that is a spurious—to a certain extent a spurious argument, because the real people who gain from a low-inflation regime are the banks, and they are the losers, usually, in a high-inflation regime.
So those people on fixed pensions are brought forth as an argument by the right wing in order to say, oh, we're not arguing for us; we're arguing for the little old ladies, you know, that have to go down to the market and make their pennies and make their pesos go so far. And inflation—sure, inflation undermines people's expenditure in the sense that it makes things more expensive, but you can deal with that if the economy's growing. You can deal with it by raising the state pension. You can do it formally by indexing and you can do it bit by bit. You can index wages. In the case of ARGENTINA, they have not indexed wages, but they do it through national bargaining. So there are mechanisms of dealing with moderate inflation. If you have slow growth and you have unemployment and you aren't prepared to reduce that employment, there's no way to deal with that except to pay poor relief.

NATO “DRESS REHEARSAL” FOR MILITARY INTERVENTION IN SYRIA?

WERE THE TURKISH PHANTOMS “TEASING” SYRIAN AIR DEFENSES FOR NATO’S ELINT (ELECTRONIC INTELLIGENCE GATHERING MISSION) COLLECTION?

Type of Turkish RF-4E Phantom photo-reconnaissance fighter shot down in Syrian Airspace 

By Tamir Eshel

TURKISH PHANTOMS IN SYRIAN AIRSPACE

The SYRIAN news agency SANA confirmed that at 11:40 AM on Friday (June 22, 2012) the SYRIAN air defense forces have downed an ‘unidentified target’ that violated SYRIAN airspace coming from the west (seaside) at a very low altitude and at high speed over SYRIAN territorial water. After spotting the aircraft SYRIAN air defense artillery units opened fire with anti-aircraft artillery, hitting the target about one kilometer from the coastline, causing it to crash into SYRIAN territorial waters about seven kilometers west of the Om al-Tuyour village in Lattakia province. The two crewmen are still missing.

DEFENDING SYRIAN SOVEREIGNTY

Apparently, the target headed west before crashing, hitting the water about ten kilometers from the coastline. The SYRIAN agency released a map showing the target’s route before the intercept. SYRIA has tried to play down the incident. SYRIAN foreign ministry spokesman Jihad Makdissi said the incident was “not an attack”.”There was no hostile act against TURKEY whatsoever. It was just an act of defense for our sovereignty.”

The SYRIAN news agency SANA published this map showing the tracks of the TURKISH aircraft before it was shot down by its anti-aircraft artillery seven kilometers off the Lattakia coastline. Photo: SANA

ELECTRONIC INTELLIGENCE (ELINT) GATHERING MISSION

According to this map, the aircraft, apparently an unarmed reconnaissance version of the TURKISH Air Force F-4E, was circling at higher altitude in TURKISH airspace north of the area. If this was the case, the aircraft could have possibly using Long Range Oblique Photography (LOROP) payloads (similar to the system TURKEY bought in ISRAEL few years ago). LOROP provides high quality imagery form very long range (up to 100 km), when taken from high altitude. However, it is less suitable for fast, low-altitude tactical recce missions characteristic of the final dash the Phantom performed just before it was shot down. What drew the pilot to act this way? One possible explanation for the Turkish maneuver is an Electronic Intelligence (ELINT) gathering mission.

TURKEYS VERSION OF THE INCIDENT

The TURKS confirmed that two Phantom fighters (the type was not identified) have left the Erhac Air Base at around 09:30 local time, one of these planes disappeared from the radar screen about one and half hour later. TURKISH authorities said the plane was flying in international airspace but crashed in Syrian waters near Lattakia. They admitted the plane had entered Syrian airspace but quickly left when warned by Turkey and was shot down in international airspace several minutes later.

TURKISH NATO RECONNAISSANCE MISSION

Officially, TURKEY said the planes were on a training mission but more likely they were on a reconnaissance mission, peeking along the SYRIAN MEDITERRANEAN coastline, where SYRIA is known to maintain a strong anti-aircraft, coastal defense and radar coverage. Based on the flight profile (if the SYRIAN description is correct) the TURKS could have performed a ‘teasing’ game, in an attempt to stimulate the SYRIAN air defenses to activate their fire control radars, therefore give away critical data that could be used to optimize electronic countermeasures if NATO decides to involve in the situation and enforce a ‘no fly zone’ over SYRIA, similar to what the alliance did in LIBYA in 2011. Apparently, the SYRIANS weren’t tempted, and challenged the intruder with anti-aircraft fire rather than surface-to-air missiles.

“TRAINING FLIGHT” ALONG SYRIA’S COAST!!??

Indeed, TURKISH foreign minister, Ahmet Davutoglu said the plane was “on a training flight to test TURKEY’S radar capabilities and had no covert mission related to SYRIA”. Davutoglu, said Ankara would formally present the incident to its NATO allies to prepare a response under article four of the organization’s founding treaty. The article provides for states to “consult together whenever, in the opinion of any of them, the territorial integrity, political independence or security of any of the parties is threatened”. It stops short of the explicit mention of possible armed responses cited in article five.

The LIBYAN and SYRIAN air defense systems are similar in terms of hardware – SA-5, 6, 3 and 2, linked through an advanced command and control network and backed by a dense radar surveillance network. For the low level air defense, SYRIA uses the SA-8, and more recently deployed the SA-22 Pantsir S1. Air defense artillery SYRIAN air defense is maintained at higher alert levels and better equipped with more modern equipment, including the new Pantsir (recently demonstrated on official video firing on a nearby coastal range), likely to be deployed in the western region. NATO is also concerned about the RUSSIAN intentions to beef up its garrison maintaining and protecting a small facility established recently at the port of Tartus, south of Lattakia. Currently the base is manned my about 100 sailors and marines, but the RUSSIANS were reportedly preparing two landing ships loaded with Marines at Sevastopol on high alert, to be sent to protect the base if required.

SYRIEN KONFLIKT

                Eine objektive Syrienanalyse 

Eine objektive Analyse über den tatsächlichen Hintergrund des Syrienkonfliktes und die Geopolitischen Interessen der USA, Europas, Saudi Arabien, Russland, China und der Türkei an Syrien und den Mittelmeerraum.

 

Unten angeführte links zu „Geopolitical Analysis and Monitoring“ Syrien Analysen bekräftigen die Aussagen von Karin Leukefeld  im Youtube Interview.

http://geopoliticsrst.blogspot.com.ar/2012/06/russia-and-syria.html

http://geopoliticsrst.blogspot.com.ar/2012/06/russia-china-iran-plan-to-stage-in.html

http://geopoliticsrst.blogspot.com.ar/2012/06/china-and-syria.html

http://geopoliticsrst.blogspot.com.ar/2012/06/syrian-conflict_11.html

http://geopoliticsrst.blogspot.com.ar/2012/06/syria_11.html

http://geopoliticsrst.blogspot.com.ar/2012/06/syria-feasts-and-rites-of-confusion.html

http://geopoliticsrst.blogspot.com.ar/2012/01/strait-of-hormuz-and-syria.html

http://geopoliticsrst.blogspot.com.ar/2011/08/saudia-arabia-usa-turkey-versus-iran.html

http://geopoliticsrst.blogspot.com.ar/2012/06/syria-israel-iran-and-usa.html

http://geopoliticsrst.blogspot.com.ar/2012/05/turkey-shiite-persians-versus-wahhabi.html

http://geopoliticsrst.blogspot.com/2011/12/syria-cause-and-effect.html

http://geopoliticsrst.blogspot.com.ar/2012/01/syrias-destiny-sealed.html

http://geopoliticsrst.blogspot.com.ar/2012/03/syrian-missiles-will-pre-empt-any.html

http://geopoliticsrst.blogspot.com.ar/2012/03/given-fact-syria-does-possess-chemical.html

http://geopoliticsrst.blogspot.com.ar/2012/06/china-and-syria.html

http://geopoliticsrst.blogspot.com.ar/2012/05/syria-switching-perception.html

http://geopoliticsrst.blogspot.com.ar/2012/05/kosovo-and-syria.html

http://geopoliticsrst.blogspot.com.ar/2012/04/syria-full-out-propaganda-war.html

http://geopoliticsrst.blogspot.com/2011/06/assad-dilemma.html 

http://geopoliticsrst.blogspot.com/2011/06/syrian-regime-likely-to-survive-upraise.html

http://geopoliticsrst.blogspot.com/2011/06/nato-rules-out-military-intervention-in.html

http://geopoliticsrst.blogspot.com/2011/08/food-for-thought.html

http://geopoliticsrst.blogspot.com/2011/11/syria-international-war-mongering-or.html

http://geopoliticsrst.blogspot.com/2011/11/food-for-thought.html

http://geopoliticsrst.blogspot.com/2011/12/as-i-see-it.html

TURKEY AND CENTRAL ASIA

TURKEY’S GROWING INVOLVEMENT IN CENTRAL ASIA

The geopolitical interests of major powers have often clashed in CENTRAL ASIA. These clashes intensified after the collapse of the SOVIET UNION, when other powers tried to take advantage of RUSSIA'S weakness and strengthen their own positions in the region. One of these powers was TURKEY. Although TURKEY began strengthening its cultural ties to CENTRAL ASIA shortly after the SOVIET collapse, its efforts to build influence in the region have only recently gained momentum.

With new confidence, a healthy economy and enough internal political consolidation to look beyond its borders, TURKEY is on the rise as a regional power. Part of its growth involves setting up for a stronger presence in CENTRAL ASIA in the future. Although this is a long-term plan that will pit TURKEY against larger powers in the region, namely RUSSIA and CHINA, Ankara will have many opportunities to increase its influence.

ENERGY MARKET 

TURKEY'S primary rivals in CENTRAL ASIA, RUSSIA and CHINA, have strategic interests in the region. RUSSIA considers the region a security buffer from other ASIAN powers and an important part of the RUSSIAN energy network. RUSSIA is very politically, economically and militarily influential in CENTRAL ASIA. CHINA sees the region as a source of energy supplies to meet its ever-growing needs and a market for its cheap exports.

Ankara has its own geopolitical interests in the region. First, TURKEY sees the region as part of its wider export market. Second, Ankara wants energy supplies from KAZAKHSTAN and TURKMENISTAN (hence TURKEY'S involvement in projects like the Trans-Caspian Pipeline and its efforts to get Kazakh natural gas to the Baku-Tbilisi-Erzurum pipeline and Kazakh oil to the Baku-Tbilisi-Ceyhan pipeline). Third, TURKEY'S social interests and ethnic ties to some CENTRAL ASIAN populations allow Ankara strategic access into the region.

TURKEY understands its limitations and how difficult it is to operate in CENTRAL ASIA. Most important, Ankara does not want to move too boldly against Moscow. Thus, TURKEY'S current moves in CENTRAL ASIA are gradual and preparatory measures rather than radical steps to spread its influence in the region. 

TURKEY'S HISTORY IN THE REGION

The predecessors of the modern TURKISH republic, the TURKS from CENTRAL ASIA, left CENTRAL ASIA nearly 1,000 years ago (though they never fully controlled the CENTRAL ASIAN countries). The TURKIC tribes in CENTRAL ASIA encountered ARABS, PERSIANS and MONGOLS, a process that greatly changed not only the ethnic makeup of the region but also its overall geopolitical landscape. Later, incorporation into the RUSSIAN Empire and SOVIET UNION altered the region's ethnic composition further and brought about linguistic and cultural changes. However, excluding TAJIKISTAN, which has ethno-linguistic ties to IRAN, the majority of the population in CENTRAL ASIA is TURKIC, a fact TURKEY believes it can use to build connections and influence in the region.

Such sentiments actually date to the late 19th century when some in the collapsing OTTOMAN EMPIRE began envisioning a PAN-TURKIC union. But the hopes of the believers in "Turanism" were dashed with the rise of the SOVIETS and the emergence of the TURKISH Republic, which focused on building a new state within its truncated borders. 

The SOVIET UNION'S demise created a power vacuum in CENTRAL ASIA that gave TURKEY an opportunity to resume involvement in the region. TURKEY'S re-engagement with the region was facilitated by the CENTRAL ASIAN countries, which found it in their interests to increase cooperation with countries other than RUSSIA after they gained independence. 

After the CENTRAL ASIAN countries became independent, TURKEY recognized their independence and established diplomatic relations. Ankara and the CENTRAL ASIAN governments began interacting more, mostly in the areas of economics, culture and education. Although TURKEY'S political and military involvement in CENTRAL ASIA is limited when compared to RUSSIA and CHINA'S strategic presence in the region, Ankara's engagement with the CENTRAL ASIAN states is an ongoing process. 

TURKEY'S POSITION IN CENTRAL ASIA

TURKEY'S current military involvement in CENTRAL ASIA is not strong enough to match RUSSIA or to be considered significant. But TURKEY offers CENTRAL ASIA an alternative to RUSSIA and CHINA in terms of economic and business ties. TURKEY'S economy is the world's 17th largest and has experienced a great deal of growth recently, which makes TURKEY an attractive player in the region. TURKEY'S ruling Justice and Development Party (AKP) has a strong focus on developing business relations with CENTRAL ASIA, contributing to the growing bond between TURKEY and the CENTRAL ASIAN states.

TURKEYS FOCUS ON ESTABLISHING SMALL- AND MEDIUM-SIZE ENTERPRISES IN ORDER TO GAIN INFLUENCE IN THE REGION

TURKISH businesses in CENTRAL ASIA are mostly small- and medium-size enterprises, which are more flexible and less susceptible to instability in the region than larger TURKISH corporations. Additionally, smaller eastern-focused businesses are more in line with the AKP's expansionist plans and can make inroads without a great deal of capital. Larger corporations have generally focused on the more established markets in EUROPE, where TURKEY enjoys duty-free access via a customs union. 

Public and private TURKISH educational institutions have also become active in CENTRAL ASIA. The GULEN movement -- an evangelical movement of moderate Islamists founded in the late 1960s by prayer leader Fethullah Gulen and known for its schools in AFRICA and the ARAB world -- opened schools in CENTRAL ASIA, though some institutions were closed in some CENTRAL ASIAN countries because of the perception that the schools served missionary purposes. The Gulenist schools are still viewed favorably in most of CENTRAL ASIA, with the exception of UZBEKISTAN.

INDIVIDUAL COUNTRIES

The level and nature of TURKISH engagement in CENTRAL ASIA varies from country to country.

Trade is an important component of Turkish relations with KAZAKHSTAN; bilateral trade increased over the years (except for declines in 2001 and 2009 due to financial crises) from approximately $236 million in 1995 to $3 billion in 2010. TURKEY has invested more than $2.4 billion in KAZAKHSTAN, and Kazakh investments in TURKEY exceed $2 billion. Moreover, TURKISH companies are involved in telecommunications, petroleum products, food manufacturing and other sectors in KAZAKHSTAN. Cultural and educational cooperation between the countries is widespread; Kazakh President Nursultan Nazarbayev has even publicly praised the importance of TURKISH schools in KAZAKHSTAN.

PAN-TURKIC IDEAS

Of the countries that have invested in TURKMENISTAN, TURKEY has invested the most. TURKISH state-managed enterprises have a relatively small share in trading volume but are active in TURKMENISTAN'S wholesale, retail, textile, construction materials, electronic devices and automobile sectors, among others. Additionally, trade between TURKEY and TURKMENISTAN has grown from approximately $168 million in 1995 to about $1.5 billion in 2010. The TURKISH International Cooperation and Development Agency (TIKA) has been involved in TURKMENISTAN since 1997 and strives to bring TURKEY and TURKMENISTAN closer by emphasizing the countries' shared historical and cultural heritage. 

TURKEY established approximately 20 schools in TURKMENISTAN and student exchange programs were thriving, but TURKMENISTAN began shutting down Gulenist schools and accused them of spreading PAN-TURKIC ideas.

UZBEKISTAN, the most independent-minded country in CENTRAL ASIA since the fall of the SOVIET UNION, encountered some troubles in its relationship with TURKEY, but they did not damage relations permanently. Bilateral trade between UZBEKISTAN and TURKEY rose from approximately $200 million in 1995 to more than $1 billion in 2010, and TURKISH investment in UZBEKISTAN is widespread. Most TURKISH businesses operating in UZBEKISTAN are small- and medium-size enterprises, but large companies including Koc Holding and Arcelik operate there as well. TIKA is involved in cultural and developmental work in UZBEKISTAN and also provides some financial assistance. TURKEY has provided scholarships for Uzbek students to study in TURKEY since 1992, but this program encountered problems when UZBEKISTAN called its students back home when relations between the countries soured.

UZBEKISTAN could prove to be problematic for TURKEY as Ankara tries to establish a stronger presence in CENTRAL ASIA. UZBEKISTAN is very concerned with its internal security and thus is wary of TURKISH efforts to spread its cultural influence. The UZBEK government closed TURKEY'S Gulenist schools and several businesses operating within the country. Also, UZBEK President Islam Karimov on April 3 closed any TURKISH television programs airing in UZBEKISTAN. Furthermore, TURKEY criticized UZBEKISTAN'S stance on human rights, focusing on crackdowns in Andijan.

TURKEY'S GULENIST SCHOOLS, THE KEY FOR GEO-STRATEGIC ADVANCES

Trade and investments between TURKEY and KYRGYZSTAN are on the rise but remain insignificant compared to TURKEY'S trade and investments in KAZAKHSTAN, TURKMENISTAN and UZBEKISTAN. Bilateral trade between KYRGYZSTAN and TURKEY has grown from approximately $43 million in 2005 to $160 million in 2010. TURKEY is the fifth-largest source of foreign direct investment in KYRGYZSTAN (after KAZAKHSTAN, CANADA, the UNITED KINGDOM and RUSSIA). TIKA has been operating in KYRGYZSTAN since 1992 and has implemented 51 projects in the country. 

TURKEY'S Gulenist schools still operate in KYRGYZSTAN and are of higher quality than Kyrgyz schools. Most government officials' children attend these TURKISH schools and then go to TURKISH or WESTERN universities. Although people with ties to RUSSIA now rule KYRGYZSTAN, these young TURKISH-educated people will rule eventually, contributing to TURKEY'S future influence in the country.

TURKEY has also developed relations with TAJIKISTAN, but it faces competition from IRAN, which has cultural and linguistic ties to the TAJIKS. TURKEY is one of TAJIKISTAN'S Top four trade partners, with trade growing from about $12 million in 1995 to $427 million in 2010. Although TAJIKISTAN and TURKEY do not share a TURKIC heritage or language, TIKA is involved in several development projects in TAJIKISTAN. The countries have also developed ties in the area of education. 

TURKEY'S PLANS FOR THE FUTURE

Given TURKEY'S limited capabilities, it cannot replace RUSSIA or CHINA as a major player in CENTRAL ASIA. During the SOVIET era, CENTRAL ASIA went through RUSSIFICATION and became less religious, which limits TURKEY'S involvement to some extent, though TURKISH educational and cultural programs are working to TURKEY'S advantage. Furthermore, some of the region's authoritarian leaders -- Nazarbayev in KAZAKHSTAN and Karimov in UZBEKISTAN, for instance -- are relics from the SOVIET UNION with certain perceptions about TURKEY.

Ankara's strategy is focused on building "soft power" in the region, mainly through education, cultural ties and business relationships. A decade from now, these measures will have strengthened TURKEY'S presence in CENTRAL ASIA, assuming that TURKEY can sustain its own economic growth enough to continue economic activities in CENTRAL ASIA. Also in a decade, CENTRAL ASIA will experience a generational shift and people with less experience of the SOVIET UNION enter the workforce and the government. These people will be more likely to identify with TURKEY, with whom they share a common heritage.

Right now, CENTRAL ASIA is not the top priority in TURKEY'S broader geopolitical strategy. Ankara is still very focused on the MIDDLE EAST, and EUROPE is an important market for TURKEY. However, CENTRAL ASIA is likely to become more useful to TURKEY in the future, hence Ankara's moves to lay the groundwork for its future position in the region.

WITTY TURKEY OR PAN TURKIC IDEAS

From CENTRAL ASIA, the BALKANS to the MIDDLE EAST, TURKEY, unlike EUROPE, seems to be making the right moves in order to secure geopolitical as well as economical advantages over its “competing” countries. Take for example BOSNIA. For years GERMANY and AUSTRIA were the leading trade partners and “mentors”, now TURKEY has become the number one trade partner and at the same time is expanding its NEO OTTOMAN ambitions in the entire BALKAN region, where as the EU is struggling to find common grounds on its BALKAN politics.