Will Turkey Join Sick Men of Europe?

Are the Turks seeing the Ottoman Empire reborn or are they going to be the next victims of economic chaos in Europe and political turmoil in the Middle East? Is Turkey about to pay a price for the overconfidence bred by a decade that brought it triumphant success while its neighbors suffered decline or disaster?

The mood is buoyant. Turkey’s successes are recent and quite real. In a country used to covert or open military tutelage since its foundation, a democratically elected government is at last dominant; its economy has surged spectacularly, making it the 15th largest economic power in the world; it is lauded worldwide as a moderate Islamic state which ought to be the role model for Arab Spring countries.

Turkish optimism has ominous parallels with the self-regarding opinions once heard in Ireland and Greece. As with Turkey, both these countries had histories of poverty and emigration which made them psychologically receptive to the idea that they had at last attained the prosperity so long and so unfairly denied them. Excessive belief in their own booms produced disastrous economic bubbles.

Will Turkey be similarly damaged by myths about its own recent success? Some experts there fear so. Atilla Yesilada, an economic consultant at Istanbul Analytics, part of Globalsource, says: “It is as if the entire nation is hypnotized and drugged into believing we are unique and we have created our own successful economic model.” He suspects that Turkey is about to be hit by a devastating credit crunch. “Our belief in our own invulnerability means that the ultimate crash will be all the worse when it comes,” he says.

The Turkish economic miracle depended on the inflow of foreign capital, and this may soon stop. European banks are beset by problems of their own and Turkey may not look such a rosy prospect to them as it once did. Sumru Altug, a professor of economics at Koc University in Istanbul, says that everybody accepts that Turkey is going to have a much lower level of economic growth this year. She warns: “Turkey is playing a risky game.”

In foreign policy Turkey may likewise have seen the high tide and the turn. Twenty years ago it was ringed by hostile countries, but by 2009 these had largely become friends. Turkey was becoming an important influence in Iraq and Syria and other parts of the Middle East. It was a close ally of Bashar al-Assad of Syria and friendly with Muammar Gaddafi in Libya. Trade followed the flag. “Turkish companies are even collecting the garbage in Baghdad and Basra,” an Iraqi friend said last year.