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Economics & Finance

Attitude is everything: The case for Turkey

Yilmaz Argüden |

Turkish membership could make the EU a world leader, contends Yilmaz Argüden, chairman of Istanbul-based ARGE Consulting.

Recent local elections have been a wake up call for numerous European leaders such as Angela Merkel and Nicolas Sarkozy who have faced significant losses. However, it would be wrong to put the blame of all these election losses to the performance of these leaders. Rather, most of the reaction to ruling governments is the result of the attitudes of European citizens. If all the current governments lose power in upcoming elections, this should not be a surprise. Actually, this should be the expected outcome unless the European citizens don’t change their attititudes. It’s all about the expectations of Europeans that cannot be met. Unrealistic expectations of the European citizens lead them to blame others, and at election times their own governments, rather than facing reality.

People, institutions and societies become more conservative when they get older and richer. Conservatism leads to an attititude of protecting rather than moving forward which inevitably requires risk taking. Over the last few decades Europeans got richer and older. This in turn led to restrictions on working hours, protection of national companies and local jobs, adoption of too-liberal social policies, and limitations on migration, all resulting in loss of dynamism and high costs that are unsustainable. This conservatism also led the Europeans to defend rights in global institutions that reflect the historical balance of power, rather than current state of affairs, such as France having a veto power at the UN, when India does not!

However, this attitude is a defeatist one as it looks like a team playing for a draw, rather than winning; with the best end result of achieving a draw and a high likelihood of a loss. No team wins without scoring. Scoring needs a forward looking attitude and continuous struggle for a goal. Having a dream for the future is the key to progress and getting ahead in a competitive world.

Protectionist tendencies – economic or cultural - are likely to delay, and therefore raise the costs of subsequent structural reform. Enlargement fatigue will surely cause Europe to lose momentum as a model for global governance.

Despite the policies of the EU's emphasis on cultural diversity, Europe is still not integrated. One of the ways to close the gap EU has in innovation is to ensure that people from different backgrounds, different cultures and experiences feel comfortable living together. Living together is much more than living side by side. Living together is to work together, to have fun together, to learn from each other to be prone to change, and to enjoy the richness of diversity.

If Europe is to continue its prosperity and competitiveness, it should adopt an offensive, not a defensive, approach: continuing enlargement to export its values and systems and at the same time clearly demonstrating its commitment to these values by its actions, avoiding double standards for short-term interests.

The EU has the potential for global leadership, not by virtue of size or strength, but by being an example. However, the EU must orient itself towards improving the world in line with its own values, instead of its current self-centred, protectionist approach. Only in such a way can Europe deal with the risks it faces itself – let alone help the process of mitigating global risks.

One very important message should be conveyed to Europe’s people: Europe should not be about protecting interests, but creating a structure by which European values become a global norm. And this requires consistency between words and deeds in all EU actions. “European” values as democracy, human rights, rule of law, multiculturalism, protection of minorities, and laicism have to be applied consistently to gain the trust of global citizens.

A true test of whether EU citizens be willing to have a forward looking attitude will be the Turkish membership. Europe and Turkey have a historical opportunity to throw out the prejudices of ages, discredit the “clash of civilizations”, and establish a stronger EU. Turkish membership presents the potential to mitigate some of the key risks for Europe, and help the EU to be a role model for global governance.
While the European population is aging, Turkey is entering a “golden demographic period” similar to what East Asia experienced in the 1980s. The continuation of reforms in Turkey will not only increase investments in Turkey, but make Turkey indispensable. In contrast to European worries about inflows of migrants, Turkey, with her renowned hospitality, quality of medical care and pleasant climate, may become “Europe’s Florida”, in terms of attracting and caring for European retirees. While immigration of Turkish people will be limited, immigration of jobs will make up for Europe’s declining population. Automotive production has started to move to Turkey – where the most profitable Ford and Fiat plants (according to company representatives) are located.

Only a few emerging markets in the world have the potential to be able to create a “virtuous investment cycle” of exports and domestic demand. This is true not only for products, but also for young managers. Young Turks are being employed by global firms throughout the world. The former Chairman of Pfizer has noted that their most important export from Turkey was qualified managers.

Overcoming regional political risks can only be achieved if economic development spreads. And throughout the region, Turkey is likely to be an engine of growth. As one observer put it, “Turkey will be the ‘viagra’ for Europe” by becoming the key agent to help improve European and regional competitiveness.

Moreover, Turkey will be of important value for the EU in trying to be a model for the world. With its deep culture, tradition of state and world leadership experience, Turkey as a memebr of the EU would contribute to the EU becoming a role model for the world to achieve a peaceful development culture.

In addition, membership of a state like Turkey, by its complementary character to the demographic structure of the EU, by its economic vibrancy, its entrepreneurship drive and economic growth rate, by its contribution to diversification of EU's energy resources, by its influence on issues related to Caucasus, the Middle-East, the Balkans and the Turkic republics, will support the EU to achieve a more visionary approach.

In sum, Turkey's EU membership is actually about whether Europe has a dream for the future or not. EU will embrace Turkey's membership if it targets to be an example to the world instead of retiring into itself. Otherwise, EU citizens will continue to change their democratically elected governments, none of which will be able satisfy them, as that requires changing their own attitudes.

Yilmaz Argüden is the Chairman of ARGE Consulting, an Istanbul-based strategy boutique firm, and Chairman of Rothschild investment bank in Turkey. He is also a professor of business strategy, an author, a columnist and a social entrepreneur. The opinions expressed herein are those of Dr. Argüden and not of INSEAD or INSEAD Knowledge. We invite all responsible replies.