Our President Abdurrahman Kaan shared written assessments with the Dünya Newspaper regarding the political and economic developments in the world that began after the Coronavirus process.
The process that began with CORONA marks a milestone for the world's economic-political and social architecture. We are now in a process of redistribution and reconceptualization in which new economic and social forms of behaviour are described as normal. Even the main framework that we describe merely as geopolitics will, in tomorrow's world, give rise to new concepts such as the geopolitics of knowledge and R&D (info-politics), the geopolitics of food and biological distribution, that is, bio-politics, industry-politics in which production, supply and logistics lines will be reshaped, economic irredentism as a field of economic definition rather than merely a political term, and culture-politics in which culture and art will operate as instruments of economic penetration and social perception engineering; and these concepts will compel us to rewrite classical economic theories from scratch.
THE PANDEMIC BEING OPERATED AS A SAVIOUR FOR THE GLOBAL OLIGOPOLISTIC ECONOMIC MINDSET
The pandemic became like an explosion point for the already strained world system. All countries of the world are in fact living through a process in which crisis management and conventional risk management methods and political approaches are being tested. When we examine the global economic data prior to the pandemic, the OECD and WB growth forecasts before the COVID-19 outbreak pointed to a contraction in production worldwide. In the statements we made at that time, we underlined that a sharp commodity crisis awaited the world in 2020 and the period thereafter. We repeatedly stated that we were in a vicious circle in which not only commodity problems but real economic problems were being solved with financial instruments and policies, and that this situation would cause money to lose its value and its definition, especially through the inflation of derivative markets, and would even bring the monetary system to the point of collapse. Quite apart from trade shifting eastwards before the pandemic, the significant declines observed since 2017 in global goods trade and in logistics volume in terms of ports and air transport were already telling us that the global economy needed a new model and a new motivation in order to revive.
THE PHASES WORLD HISTORY WENT THROUGH UNTIL THE PANDEMIC:
THE 20-YEAR TRANSFORMATIONS OF WORLD GEOPOLITICS
When we examine the world's economic-political history, we see that every 20 years the economic pattern moves into a different period and undergoes a transformation. Every two decades the system revises itself. If we take even the 20th century alone;
In the years 1900 to 1920, the dominant powers of the industrial revolution entered a fierce war in order to entrench capitalism. The First World War rewrote the rules of world economic history and the borders of countries were drawn.
We can say that the foundations of many geopolitical impasses that even we experience today were in fact laid within those 20 years. During those 20 years Türkiye was waging its own national war of liberation and independence and was almost entirely a player outside the system.
When we examine the period between 1920 and 1940; the economic depression of 1929 caused us to reconsider the existing processes. In the 1920s, American dominance made itself felt in the global system. In this period, American banks, which carried out deposit transactions together with investment activities, had begun to take the place of British banks. The strained world system found itself in the middle of a second war in 1939, and this time the way was opened for hegemony wars.
After the Great Depression, financial controllers took the stage because of free entries into financial markets, balance of payments imbalances in countries, capital flight and debt burdens. In this process we were dealing with the integration of a renewed country into a new form of government.
When we examine the period between 1940 and 1960, we saw that with the Marshall Plan and the Bretton Woods system the independent economies of countries were brought under control one by one. In those 20 years Türkiye had been obliged to integrate the dominant financial system coming from the West into its own country.
When we look at the period between 1960 and 1980, the Euro Dollar markets had become the centre of global finance together with the oil shock. The quadrupling of the oil price in 1973 following the Yom Kippur War, and its tripling with the Iranian Revolution in 1979 and Iraq's threat to Iran in 1980, led to the flow of global finance being deeply shaken. Thus the world returned to the approach of 1973 that made the state a prerequisite for development. In this phase we were living through the processes of coups and memoranda. We virtually prepared the ground for an understanding that was unable to attain democratic maturity to make us dependent on the outside in economic terms.
The period from 1980 to 2000 heralded a transformation rarely encountered in the world. In the years following the end of the Cold War, the world became acquainted with a new set of economic definitions and attitudes, both through the differentiation of political understanding and conditions in the international arena and through progress rarely encountered in technology. International socio-political relations based until then on the nation and the pact, that is, on a regional basis, gradually gave way to a global inquiry into production and welfare that accepted all the nations of the world as its interlocutor.
Yet globalization was not a final outcome but, on the contrary, a transition-period economy. Today we see the validity of this hypothesis through the economic attitudes displayed during the Corona process.
The defenders of the world system used to define the global financial system as an “illusion” created by the class forces dominating the economy, restricting the freedom of movement of states in the international arena and, on the same plane, taking the place of state strategies. Today this group states with a much louder voice that “the existing economic system, even with neo-Keynesian regulations, is far from bringing countries and nations closer to one another and turning economic relations into global welfare. Did we not witness this closely during the Corona process?
Have we not seen that the oligarchic financial system revolving around incorporation and branding has led to deeper and more destructive divisions and economic chasms among the nation, and has even destroyed the fundamental element of trust in the trade system?
How then did globalization, which was criticized so harshly in its time, manage to find such favourable ground for itself? Because it presented colonialism's discourses of free trade and free movement, under the guise of democracy, as an advantage in favour of developing countries. Or it supported such a perception with the financial system.
Yet the same system also brought with it uniform rules, that is, standardization in the eyes of all the nations of the world. Uniform cultural currents even subjected the cultural codes that nations had developed throughout their histories to a grading within the concept of “civilization”.
Unfortunately, from this point onwards, the fundamental elements of the real economy such as production, employment and social welfare lost their importance and began to surrender to money and the financial system around it. In other words, the process of managing economic policies with financial instruments actually began. The derivative began to take the place of the real.
The years from 2000 to 2020, on the other hand, pointed to a process in which not only the monetary system but money itself was being redefined in paradigmatic terms. The process that began with the September 11 attacks in fact became the milestone of brand-new hegemony struggles, and in time China joined the game as a giant player. With China's entry, economic production and supply lines also began to shift increasingly eastwards.
However, there is a critical point here that is important in terms of the future course of the pandemic's effects: before the crisis, the production-based growth trend of the top 20 developing countries was upward, while in the developed 20 this trend was downward. As the world economy shifted eastwards, production bases were changing hands and capital was finding new areas of production. While the production capacities of the developed countries under the dominance of large companies were declining in a world where national economies regained strength, the world's new area of investment and production was the blocs formed by the developing 20.
Now, together with the heavy fiscal packages announced by developed countries in the recovery process, this also indicates that in the period ahead there will be a much more radical decline in the growth rates of these countries and that they will in parallel turn to tighter fiscal policies. Here we may be faced with the option of balancing investments and the budget through self-financing. And this is possible by increasing production capacities and by establishing domestic and national strategic knowledge-production agencies.
POSSIBLE CHANGES IN THE WORLD AFTER THE PANDEMIC AND THE INCREASING IMPORTANCE OF TÜRKİYE
First of all, our ways of life and our perception of socialization will change. This change will leave us face to face with a new working order and a new set of regulations in economic life.
We will need to redefine the relationship between our value system and the public sphere. In this process, for sustainable human development, every nation needs to review its system of values and to design economic life in a manner respectful of these values.
We need a new paradigm of economic production and distribution for a just distribution of production, supply and value chains among all the countries of the world. This crisis has shown us that China alone, or countries that hold the production and supply chain alone on a sectoral basis, and the economic system that supports this, have fallen into a void in times of crisis. For this reason, a multi-participant sharing system in which almost every nation can take part in global world output with its own economic values awaits us. Because the economic contraction that will be experienced in the post-Corona period will also trigger a global impoverishment. In this respect, global welfare needs to be redefined and its conditions re-established.
Our ways of doing politics will change. During and after this process, the world is testing a direct democracy that is leader-based but that grows stronger by drawing power from the grassroots. We have seen how a participatory yet pluralistic structure produces successful results in crisis processes with the momentum coming from leaders and their grassroots forces.
Our definitions of education and our scholastic education systems will change. We can say that a new model of education and economic management now awaits us, one in which remote access opportunities are used effectively and qualified human resources are thus trained in multiple disciplines.
A process awaits us in which we will question the conceptual balance between science and religion and redraw the boundaries of positivism. The world is coming to understand that in the triangle of science, religion and moral values it can walk neither on a rigidly positivist line nor on one entirely closed to the world.
The relationship we have established with the environment and nature needs to be redesigned, and we need to enter into a new covenant of mercy and accord between ourselves and nature. In this process we have once again seen that nature is one of the most precious assets entrusted to us.
Our conventional elements of national power will change. We see how the elements of national power that we once defined as land, capital and military dominance have diversified, and how new concepts have entered the spectrum of national threats.
Today China is perceived in many fields as the domino power of trade. However, this situation must not make us forget the footsteps of a new East-centred hegemony. Moreover, this new power is a far more immediate threat in terms of both population and geopolitical positioning when compared with the overseas interventions of a distant continent. Likewise, when the intelligence power it has established in Central Asia and the Asia-Pacific is added, it reveals an even closer threat that we will experience in the future: Economic Intelligence Wars.
In this context, it is exactly the right time to review not only our economic parameters but also our security perceptions.
In measuring national power, we must separate national resources into technology, enterprise, qualified human resources, financial capital and natural resources. Natural resources now open up an area of necessity for us in terms of acting on the basis of stocks. What are these stock resources: food and seed stocks, technological know-how stocks of critical importance, precious metal stocks and, of course, energy stocks. At this point it will not be enough to possess energy; in addition we will have to pursue an energy stockpiling strategy. For this reason, minimizing external dependency in energy, expanding resources and even spending the profit to be obtained from the energy reserves that have been found on finding new reserves stands before us as a critical strategic decision. Because the four fundamental stock powers we have listed above, energy first and foremost, will remain our most valuable card at the tables where we determine economic-political strategies. When we look at the increase in world energy production on a regional basis, it is seen that the countries that will meet this increase will be developing countries, and these countries, with the increase in their energy needs in parallel with their rising production, will in fact themselves be countries with a high level of energy demand. This situation emphasizes the strategic importance of Eurasia and therefore of Türkiye, the transit country of Eurasia. The increase in the transfers made over Eurasia is particularly important. Here too, Türkiye serves transit both with land traffic and with strait traffic. For this reason, apart from reaching gas reserves, it is essential that the channels on the transport lines of these reserves and of the reserves of other countries also come back onto the agenda. Here, even though it causes intense debate, the importance of the logistics strategy that the Kanal İstanbul model will add to Türkiye as a transit country emerges once again.
PROPOSALS FOR THE RECONSTRUCTION OF THE INVESTMENT LINE
Our national performance, on the other hand, is measured by three fundamental components:
The security of capital, the creation of economic intelligence, the design of commercial and economic diplomacy in a way that will serve the establishment of a trade and investment line
The competitive advantage we will create in these three fundamental components will bring our country to the level of economic self-sufficiency.
Economic self-sufficiency is the key factor in today's new world order. And economic self-sufficiency is not the scaling and classification of capital; it is the creation of a network economy spread across the grassroots and fed by the grassroots.
One thing must now be very well known; movements that find no response at the grassroots or that do not gain broad acceptance at the grassroots level are not long-lived.
The same applies to economic structures and organizations. A national capital bloc spread across the grassroots and holding sway over a broad mass provides the following advantages:
1.It does not segregate capital; on the contrary, it spreads it across the grassroots.
2.It prevents informality in the formation of capital stock.
3.It ensures the active participation of SME-like structures in the formation of capital stock.
4.It paves the way for SME mergers and the formation of large capital groups. It increases specialization in production.
5.It prepares the ground for the capital front to establish an internal funding system and to cover its own losses through these fund systems. It reduces the costs on the state such as "company rescue and restructuring”, and incentives. The future planning of strategic resources and the capacity to respond instantly to change, that is, "economic reflex”, is an indicator of our capability for economic struggle. One of our fundamental investment policies should be not merely to mobilize market actors on the basis of stocks, but to increase the effectiveness of firms within a flow system and, like the need for new blood, to revalue our SME market, which balances the inertia of large enterprises with its narrow scale but high productivity, by establishing an entrepreneurial ecosystem, and to bring new playmakers out of this market. For this reason, articulating investment as a complementary element to the production-trade line is our main strategy. Thus the new process puts on the table the option of effectively operating our self-financing resources in our investments as a country, just as firms do with self-financing. We must encourage the transfer of the cash held out of precautionary motives by both our final consumers and the producer segment into safe and new fields of investment.
In economic terms, we must turn towards the construction of a new entrepreneurial and competitive economic system that will eliminate the crowding-out effect on investments. Because the digital transformation that inevitably awaits us in the new period will have a whirlpool effect that will influence many fields, from our ways of doing business to our new logistics and supply networks. In this regard, the concept of money, whose definition and function will change, is pushing us towards a new investment model. The model we call investment-production-trade synchronization derives from the logic that our SMEs, the backbone of the economy, should be the main element of investment, and that they should be assessed selectively, grown in suitable campuses and commercialized as an investment agent and even as an export product.
PRINCIPLES OF PRODUCTIVITY AFTER THE PANDEMIC
The pandemic should move us to question the productivity of three fundamental points:
1. The productivity of capital and capital stock. A state's saving power in times of crisis is its capital stock. However, many countries saw in this process how fragile a capital stock they had in this regard. Many countries, ourselves included, realized that capital accumulation was clustered in a few countries, China first and foremost, and that the national capital stock in their own country was insufficient and had been shaped in a manner far from productive.
2. The productivity of incentives and supports. In other words, we can speak of testing how productively supports are converted into investment. Incentive systems and supports make the capital cycle productive as long as they ultimately serve investment and capital accumulation. However, the pandemic showed us that we live within a system that occupies itself in a serious paradox between capital and wealth.
3. Our Entrepreneurship Policies and Entrepreneur productivity. The pandemic process in fact offered a test environment for all the world's companies in parallel with their scale. We can think of it as a kind of resilience test. While encouraging entrepreneurship, we need to consider the following: Is there a need for everyone to be an entrepreneur or a producer? There must be certain preconditions and limits to this. Otherwise, fragile firms become a burden on states in such times of crisis. We saw this too during the pandemic process.
4. Regulatory productivity. We have to build a regulatory shield for the commercial partnerships we will form with the ASEAN Bloc, China first and foremost. A comprehensive set of regulations is needed both for company acquisitions and for the export of our own firms in the name of investment.