A few years ago, a group of business executives asked Publius to discuss the value of investing in Turkey. He answered with one word, “Chicago.”
Draw a circle with a radius of two and a half hours flight time from O’Hare. You get just about every major business hub in North America. Stretch this a bit and you get to all of them. Chicago has easy access a huge, $22T GDP market, the largest in the world. This is Chicago’s main advantage and the reason for its early growth and economic power today. Throw in access to the Atlantic via the St. Lawrence and to the Gulf via the Mississippi and the picture gets better.
It does not take a great mathematician like Ramanujan to do a similar radius for what was an $862B GDP Turkey, showing easy access to the EU, the world’s second largest market with its 550 million middle class consumers and $17T GDP. Throw in Russia, the Middle East, North Africa and parts of Central and South Asia and you have a serious contender.
This is so obvious that, in spite of the cartographic limitations of the ancient world that, in 324, Constantine built Istanbul (‘Stanbul,’ is a Turkic pronunciation of Constantinople), now Turkey’s commercial center. He placed it on the Bosphorus to control trade between Asia and the Black Sea on one side and the Mediterranean World on the other. Being logical, he moved the center of his Roman Empire there from Rome.
The place was so well-chosen that no one conquered it until the Ottomans under Suleiman the Magnificent in 1453. That’s like Washington holding out from its 1814 burning by the British until 2943.
When the Ottomans took over, they held on for another four and a half centuries until their collapse at the end of WWI in 1918. Even then, no one less than Churchill, as First Lord of the Admiralty, failed to take Istanbul at the Battle of Gallipoli that took most of 1915. He was forced to resign. He didn’t really recover until he replaced Chamberlain during the fall of France a quarter century later. Ottoman control of Istanbul dissolved only as part of the broad settlement forced on them by the Treaty of Versailles.
So how is it that Recep Erdogan, Turkey’s president, doesn’t know any of this about his own nation and is, like Vladimir Putin, who also cannot read a map, doing his very best to drive his country under? (See Publius' Managing Russia's Implosion)
You would think that the seventeen centuries since Constantine would have taught him something. His Chicago advantages are obvious for all to see and invest in.
When, about six years ago, Publius went on a walking tour of Turkey, he saw prosperity everywhere. The roads were orders of magnitude better than American roads. Every home had a car. The stores were full. The restaurants were amazing. The markets were alive. The signs of consumer, commercial and industrial prosperity were everywhere. Constantine’s vision was back, big time.
A Turkish leader with even a small brain would have set his goals on Turkey’s Chicago-sized market opportunity, cut a deal with the restive Kurds, moved fast to join the EU, gaining enormous global influence, and liberalized Turkey’s markets and political system so that the country could race forward to capture its opportunities.
Doing this would have made Erdogan the Suleiman the Magnificent of his time.
But Erdogan gets none of this. He worked at setting himself up, Putin-style, as the Mussolini of Turkey. This provoked a failed coup in July, 2016. Instead of cooperating with his opposition to move to a post-coup liberal order and grow the economy in his $20T GDP Chicago space, he jailed tens of thousands, targeting all the most talented people in the country. He went on to complete his Mussolini transformation.
He messed up his relations with the Kurds, about 18% of the population, even when he had a deal in the bag. He messed up his relations with the U.S.-backed Kurdish forces in Syria. Why? He has never even hinted at a good reason. He jailed an American pastor during the 2016 coup, provoking the ire of Dumb Don who has laid crippling sanctions on the country.
What did Erdogan gain for Turkey?
Business confidence is failing. The economy is contracting. Inflation is running at 101% annually. The Lira is now 60% lower than it was when Erdogan became President, driving imported energy costs through the roof. Erdogan is preventing the central bank from raising interest rates high enough to stabilize the economy. Debt levels are out of control.
Turkey has nowhere to turn. Except into the arms of an equally mismanaged and shrinking Russia with its tiny, Italy-sized GDP.
A real turkey.