“Turkey's Economy in the era of Global Transformations”

On November 22, 2022, the School of Regional Studies of the Faculty of World Economy and International Affairs, HSE University within the framework of the permanent online seminars “Contemporary Area Studies”, with the support of the Russian Middle East Association, organized the 58th online seminar with an the Deputy Dean of the Faculty of International Journalism, Associate Professor of the Department of World Economy of MGIMO Dr. Dr. Nigyar Masumova. 

The topic of the seminar: “Turkey's Economy in the era of Global Transformations”.

Dr. Nigyar Masumova began her speech with a small historical digression, noting the main reasons that influenced the formation of the economic model characteristic of Turkey in the 20th century. The lecturer highlighted the main stages that the Turkish state has gone through on the way to an open economy model. This path included a period of statism, then in the post-war period the import substitution model prevailed, which was replaced by an export-oriented model. Agreements on the export of labor to European countries were concluded at the state level, which was of particular importance for the Turkish economy, which was in dire need of foreign currency. Dr. Nigyar Masumova also notes the significant role of tourism and foreign investment in partially covering the negative trade balance of the Turkish state. The lack of formation of an economic model caused serious economic difficulties in the 1990s and 2000s.. However, faced with the crises of 1991, 1998, 2000 and 2001, Turkey prepared for the beginning of the 2008 crisis.

Turning to the modern period, Dr. Nigyar Masumova noted the peculiarities of the Turkish economy, expressed in the combination of European standards and elements of the Islamic economy based on the principles of Sharia. The factors influencing the investment attractiveness of the state were also highlighted. Among them, such aspects as the threat of terrorist attacks, the ongoing development of organized crime and the commission of multiple violations of rights and freedoms by the State were attributed to those that have a negative impact. It also has a positive effect on the investment attractiveness of investing in R&D, the impressive size of the market and the convenient geographical location of the state.

Having mentioned earlier the importance of R&D development for the Turkish economy, the lecturer notes that spending on this area remains at a fairly low level, which does not allow Turkey to make tremendous progress in this direction. Nevertheless, a significant step towards creating conditions for independent innovation development was the creation of an IT valley near Istanbul.

Speaking about Turkey's foreign policy ties, Dr. Nigyar Masumova points to Russia as one of the key partners. Energy diplomacy between Russia and Turkey is a vivid example of how cooperation in the energy sector forms friendly relations between countries with divergent positions on the situation in the region. Energy projects such as the Turkish Stream and the construction of a nuclear power plant in Turkey, fully funded by the Russian Federation, allow not only to receive mutual benefits, but also to bring states closer together. In order to form a more accurate representation of the interaction between Turkey and the Russian Federation, Dr. Masumova cites the figures of trade turnover, as well as the volume of exports and imports between the states for 2021. Due to the increased economic cooperation, the issue of switching to settlement in national currencies has arisen, but there is no progress in this direction, which is primarily due to the danger of inflation in both the Lira and the Ruble.

The European Union acts as an equally important trading partner for Turkey, since it is the countries of this association that are the main investors for Turkey.

Concluding her speech Dr. Nigyar Masumova emphasized the crucial role of tourism for the development of the state's economy. Despite the fact that the share of profits directly from tourism in the country's GDP is not so high, this sphere has a huge impact on related industries, which contributes to the development of the country's economy. Moreover, the lecturer emphasizes that by improving the tourism industry, a positive image of Turkey abroad is being formed.

Support to the project from the Faculty of World Economy and International Affairs at HSE University is gratefully acknowledged.