Monday, July 5, 2010

Is there Arab interest in Turkey?

I got an email comment last week on an article by Semih Idiz that had appeared in the Daily News, What drives Arab interest in Turkey?. Since I have not asked for his permission, I am not writing his comments below, but basically, he was saying that while he did agree with Mr. Idiz's arguments, there is also the Erdogan/Islam effect going on in explaining the Arab interest in Turkey.

I was the only economist in the reader's email list of columnists, and neither his nor Mr. Idiz's main concern is economics, although the latter does refer to economic ties in his article. But being a die-hard economist who sees the dismal science in everywhere, I wanted to see how much of this interest has actually materialized. And as I always say a picture is worth more than a thousand words:
At first sight, it seems that there has been huge interest in Turkish goods by Arab countries recently. But then you notice the timing; exports to Arab countries have increased exactly at the onset of the global crisis, when exports to the EU have plummeted; that's why one line looks like the mirror image of the other after 2008.

Although I do not present concrete evidence here, I suspect that most of the jump in exports is coming from Turkish exporters efforts in finding new markets in the wake of demand from their greatest market collapsing. In Econspeak, I would say that there is more of a supply effect going on than a demand effect.

1 comment:

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