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Policy Brief

Turkey as a Regional Economic Actor: Successes and Weaknesses

November 23, 2010

Franco Zallio

Favorable economic prospects encourage Turkey to strengthen its presence in the Middle East North Africa (MENA) region. By leveraging both its geographical proximity and a series of bilateral agreements on free movement of people and goods, Turkey is significantly increasing its exports to the region, which now account for more than a quarter of its total exports. This is supporting rapid economic recovery and the growing assertiveness of Turkish foreign policy in the region. Sustainability of economic growth in the medium- to long-term requires structural reforms to improve productivity and enhance competitiveness. However, reforms have a significant political cost, and are slowed down by the upcoming elections. If the government does not take advantage of the current favorable conditions to achieve these reforms, Turkish economy prospects will be damaged. This would also weaken the economic foundations of current Turkish foreign policy in the MENA region.

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