a man just because I’m ordered to? That’s your bourgeois mentality.
Don’t you think it’s absurd that you’re ordered to go out and write an article?”
Don’t you think it’s absurd that you’re ordered to go out and write an article?”
– an anonymous member of Italy’s Red Brigades,
of the Roman weekly Panorama.
“Violence is as Turkish as apple pie” said the American embassy counselor in Ankara. If we think about Turkish apple pie then we should recognize the ungovernable violence rampant in Turkey. Terrorism is not just a crime, it is a war against humanity. The world has just begun to notice that no one is ever guaranteed to avoid this “disaster”.
It is so hard to identify the causes of terrorism, because of two reasons. One is that there are so many terrorists. It is not possible to have a single explanation for a behavior of such many people. The second one is the intensity of terrorism. But still, I believe that it is driven by three factors in general and especially in Turkey. First and most powerful one is revenge, what they personally have suffered. Secondly, they want a glory or renown, they want to be considered as global leaders. The third thing they want is a reaction, particularly by provoking us into a reaction that how we demonstrate how important they are. They do not have armies and territories they can control. What they only have is an ability to provoke us to react. And in this “provocation” Turkey is ranked at 27th place by Global Terrorism Index Report 2015. Turkey has an upper position than countries such as Uganda, Iran, the USA, Algeria and Bahrain. On the other hand, Turkey is a part of G-20 countries which is formulated from 20 major economies, and among G-20 countries Turkey has the 17th position.
The question arises whether so prevalent terrorism has negative effects on the overall economy or not in Turkey. And to shed lights on, commonly it is worth mentioning whether the impact of terrorism on trade implies additional cost for the transaction or not. From Figure 1, we see that trade openness (export + import/GDP) and terrorism incidents have roughly similar trends. Despite expected negative effects of terrorism on the overall economy, Turkey’s international trade is still in progress. Uprising terrorist incidents are in line with uprising trade openness, which on its own is one of the most important indicators to comprehend countries’ economy status.
Figure 1. Data for 3T's framework during the 21st century
Source: Author’s own calculation based on World Bank statistics and Global Terrorism database
There was no sharp break in the country’s trade openness after 2010. At the same time, we see that terrorist attacks are dramatically increasing in Turkey. Also, neighbor Syria plays a major role in all these stories. As the war in Syria continues and reaches its sixth year, trade between those countries apparently boom. According to TOBB’s (Turkey Trade Registry Specialist) Gِokhan Mirahmetoglu, “Syrian people also pin hopes on the fact that the companies they establish in Turkey will be able to have a share in future trade with their home country. I believe the majority of these firms are here for long-term business”.
According to Nitsch and Schumacher (2003), there are three ways how terrorism might hamper trade openness. Links are as follows: first, terrorism causes higher cost for business creation. Second, increasing terrorism attacks is associated with stronger security which is a reason for the expensive trade. And lastly, the aim of terrorism is not directly to have economic damage for countries, but terrorism incidents might be toward to distortion of industries and transportations. Despite these negative channels, the overall magnitude of the effect of the terrorism on trade is ambiguous, because there is also the positive side of this relationship through illicit trade. It is important to note about “illegal oil trade”. The US Department of State has reported that Turkey must prevent benefiting from illegal oil trade with terrorist groups (United States Department of State, 2016). More trade openness might be accompanied with more illegal trade in a country. The reason behind this statement is discussed by following studies. Humud, Pirog and Rosen (2015) claim that ISIS has no export facilities, so they sell oil at low prices at Turkish borders. And related to this, Kiourktsoglou and Coutroubis (2015) assume that Turkey has enough abilities to export smuggled oil at higher prices for international markets. This leads to an increase in export (oil has $4.5 billion 3.1% share in terms of overall exports from Turkey) and consequently, there is an upturn in trade openness in Turkey.
This topic is too broad for discussion. But still, is Turkey “a victim of terrorism” or “a guilty for profiting from terrorists”?
Many author discuss about the relationship between trade openness and international trade. And as you mention, there is no definite relationship between them. But logically, terrorism would cause insecurity especially on border. This makes the transaction cost to be higher. For example, After collapse of twin tower in US, Truck on Canadian border and other waits for long period of time just for inspection. Well, focusing on Turkey, I can say that those frequent attack in Turkey has no positive significance on its economy. Volker Nitsch and Dieter Schumacher (2003) "Countries targeted by terrorism trade significantly less with each other than countries unaffected by terrorism." This implies that being a victim of terrorism outweigh getting any positive profit from it.
ReplyDeleteThanks for your comment Miki !
DeleteYes, I totally agree that terrorism attacks would cause insecurity in a country which on its own is harmful for the economy. But on the other hand there are many factors which affects positively trade openness in Turkey. The biggest influence is "illegal oil trade"(illegal import of oil at low prices), which triggers exports (at higher prices – which is revenue for the government) and leads to an increase in trade openness. So still it is arguable issue, whether Turkey has some losses or benefits from terrorism.