The Arab revolts have paved the way for Turkey to become an investment base for the countries of the region.

The Arab riots do not appear to have ended. The revolts are spreading  in full flood.  Meanwhile, they slightly change their character from country to country. Those in Tunisia and Egypt differed, in Libya revolts took a completely different character and the dynamics in Yemen and Bahrain resemble neither each other nor the rest of the countries. Concerning Turkey, there exist a series of short-term risks. I remember talking about oil prices and the commercial relations between Turkey and the countries of the region. I also am aware that I assessed the entire issue in the context of the alarmingly high current account deficit and said, "fasten your seatbelts, please!" But nowadays, I have started to think that the Arab revolts might have a positive aspect: With the help of these revolts, Turkey can bear a high current account deficit more easily. Let me talk about the opportunity the Arab revolts offer Turkey.

In the twenty-first century, the level of foreign direct investments Turkey has undergone an unprecendented increase. We generally have preferred to associate this with the European Union process. However, the level of foreign direct investments in Egypt also has increased significantly in the twenty-first century. When we compare the two, we see that the levels of foreign direct investments are similar, at approximately one billion dollars. Then, the international milieu has become more tolerant and the level of investments has increased in both countries. The level of foreign direct investment Turkey attracted in 2007, just before the global crisis, was above US$ 20 billion and foreign direct investments to Egypt exceeded US$ 10 billion. Remember, Egypt was one of the 3G countries, that is, one of the global growth generator economies as a Citibank report I previously referred to argued.

Then, what is the lesson to learn here? I believe the first point to keep in mind is the following: Egypt will be a transition country for at least five years. The new regime will not mature overnight. I wrote this before: Although Turkey had a "national chief" who was the opposition party leader when the new regime was initiated in the 1950s and who directly supported the establishment of the regime, the transition to the new regime took place in intervals and lasted quite a long time. Turkey has yet to understand and appreciate what İsmet İnönü accomplished. The country will normalize when it learns how to appreciate this. This is the first point to keep in mind. Egypt is a good example; but things are more difficult to accomplish in Libya and Syria.

So, what should the Egypt example make us think? The issue that has been occupying my mind is as follows: In the period of transition, Egypt can attract relatively less foreign savings since the economy bears more risks. This is the picture we have to expect for at least three years. Therefore, we have to add Egypt along with European Union countries to the group of "countries with savings surplus."  In this transition process, Egypt cannot attract as much foreign direct investment as before. The ocean must settle down first. Let this be the second point.

This might have two positive outcomes for Turkey. The first is a universal one. Turkey will enjoy an economic milieu in which high current account deficits can be financed more easily. The changing balances in the neighboring countries give Turkey the opportunity to finance larger current account deficits. Why? Because of the financial crisis in the European Union and the Arab revolts both of which lead to savings surplus in Turkey's surrounding region. The second positive outcome is thatthe Arab revolts have paved the way for Turkey to become an investment basis for the countries of the region. This means, Turkey can both bear the high current account deficit thanks to the current milieu and finance the deficit with more reliable funds.

The situation resembles the following joke: A monk, who ignores all the suggestions that he should beware the flood in expectations of a miracle from God, finally goes to heaven and expostulates on the God. He received the following response: "What are you talking about? I first sent you someone to tell you to evacuate the church, but you did not listen. Then, I sent a boat to rescue you, but you turned it down. Finally, I sent you a helicopter, but you refused to get in again. What else could I have done?"

This is a conjunctural opportunity. Opportunities have a meaning only for those who are prepared to seize them.

This commentary was published in Radikal daily on 17.05.2011