Turkey is in search of investment and hot money on a global scale

Turkey completed two major elections within the month of May. With the May 14th elections, the new members of the Grand National Assembly of Turkey (TBMM), consisting of 600 deputies, were determined, while the Presidential election advanced to the second round. On May 28th, Turkey once again elected Recep Tayyip Erdoğan as the President in the second round of voting.

After the elections, Turkey is undergoing changes in the economic field. Mehmet Şimşek, known for his orthodox economic policies, has been appointed as the Minister of Treasury and Finance once again after a five-year hiatus. This appointment was made by President Erdoğan, who formed the new cabinet.

In Turkey, where it is believed that heterodox policies will be abandoned in favor of an orthodox economic approach, the search for investment and hot money on a global scale is now beginning. With the shift towards orthodox economic policies, the government aims to create a more stable and predictable investment environment to attract foreign investors and stimulate economic growth. The focus on attracting investment and hot money reflects the government’s efforts to enhance the country’s economic prospects and strengthen its position in the global economy.

Ekonomim gazetesi yazarı Zeynep Gürcanlı, expressing the expectation that Western countries will be the main source of investment, stated, “However, the US and European countries are waiting until July to see if the economic transformation will have implications for foreign policy. According to Western diplomats in Ankara, if the AK Party government removes the obstacle to Sweden’s accession to the Alliance before the NATO summit in Vilnius in July, it will be interpreted as the ‘beginning of transformation’ in foreign policy.”

According to Western diplomats in Ankara, if the AK Party government lifts Sweden’s obstacle to joining the Alliance before the NATO summit in Vilnius in July, it will be interpreted as the “beginning of transformation” in foreign policy.

In her article titled “Sıcak para gerekli; ancak nereden gelecek?” (Hot money is needed; but where will it come from?), Gürcanlı mentioned that Ankara does not expect any hot money and subsequent investment from Russia. She states that the Putin administration has already fulfilled its obligations by postponing Turkey’s natural gas debt and sending billions of dollars to Turkey for the Akkuyu Nuclear Power Plant in one go during the election campaign. Given that Russia is under Western sanctions due to the conflict in Ukraine, any new money and investment from Russia carries risks for Turkey. Moreover, considering that Russia has allocated almost all of its resources to the Ukraine war, it does not seem likely that new support will come from Moscow.

The extent of China’s approach to Turkey is a separate matter of curiosity. Gürcanlı emphasizes that China is cautious and shared the following information:

China does not give the impression of eagerly approaching Turkey, both during the election campaign and after the formation of the new government. The significant impact of “unpredictability” in both the economy and foreign policy during the AK Party governments in Turkey plays a role in this. While Ankara often remains silent on the issue of the events in East Turkistan, which is the most important issue for China, it does not hesitate to sign and support decisions condemning and criticizing China together with the Western front in the international arena. There have also been instances where AK Party politicians made harsh statements about the atrocities against Uighur Turks in China.

Indeed, Chinese President Xi, who has made intensive visits to the Middle East in recent times, has never made an official bilateral visit to Turkey with this title. President Xi, who started his 3rd term as President, came to Ankara in 2012 carrying the title of “Vice President”. Since 2000, there has been no visit at the level of President from China to Turkey.

The total investment made by 1,148 registered Chinese companies in Turkey is only around $1 billion according to 2022 data. Clearly, the Beijing government will not open its purse strings completely without completely ignoring what is happening in East Turkistan in Turkey.

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