We should not expect an improvement in Turkish-American trade unless Turkey receives investments from the US.

The global crisis did not skip Turkey; it made a hole in it and passed on. Those affected seriously still recall the pain. This is exactly why the votes of the ruling party fell below 40 percent in the local elections of 2009. Unlike the global crisis, however, the global value chains still skip Turkey. Countries, then, can be grouped in two categories: "those through which a global value chain passes" and "those through which a global value chain does not pass." Turkey is in the second group. It has weak relations with the world, which is bad. This should be fixed. Becoming a country through which a global value chain passes is harder than becoming a country through which a pipeline does. The former requires a more successfully designed economic policy. A country that has not identified its economic priorities cannot be a part of a global value chain. Today let me provide the evidence that forms my perception of the issue and let you decide.

A while ago an earthquake hit Japan. This was followed by a nuclear reactor accident. I remember thinking "would the accident cause a permanent break in the global value chains?" In fact, I wrote a commentary questioning whether the weak global recovery would be affected by the accident. Last week The Chief Supply Change Officer Report 2011 was published. It is based on a survey conducted with 750 chief executives who operate on the global scale. The report answers the question I asked: though Japan is among the top ten countries with respect to the integration in global supply chains, it is not of critical importance. "China, the USA and Germany appear far more integrated into the world's manufacturing supply chains than competing territories, most notably Japan." This is what the report says.

For those wondering about Turkey, let me put it straight. The report does not mention Turkey even once. The global manufacturing chains evidently skip Turkey. What a pity. But the report mentions numerous emerging economies other than China. Please let me summarize three main conclusions I drew from the report. The survey asked global executives which countries and to what they attach importance when establishing global value chains. The first conclusion to draw is that 80 percent of the survey participants indicated that they sell and ship to emerging economies. Among these, approximately half considered recipient countries as target markets. This actually implies that the perception of involving emerging economies in the global value chains just to benefit from cheap labor is being abandoned. The world is changing. This is the first point to state.

The world is changing, but Turkey is failing to fulfill the role it must undertake. Survey participants explained in response to different questions why they assumed certain countries to be headquarter locations. The survey has four questions and lists the name of 16 countries including Brazil and Mexico. China and India are already on the list. Poland and Hungary appear as strong rivals to Turkey. Even Russia is on the list, but no one ever mentions Turkey. The questions include "in which country do you prefer to conduct manufacturing or production," and "in which country do you prefer to conduct design activities." Participants were also asked to state which countries they considered to be target markets. But Turkey is not in the radar. Mexico is on the list as an emerging market economy, but Turkey is not. This is the second conclusion to draw from the report.

And the third one: In the past, trade followed the flag,  but now trade follows investment. To improve trade relations, the investments in the relevant country must be increased. We should not expect an improvement in Turkish-American trade unless Turkey receives investments from the US.

Then, why is Turkey a country ignored by the global value chains? There are two simple reasons: First, Turkey does not have an industrial policy. Second, it cannot be foreseen how and on the basis of which economic incentives the decisions of the political authority change. Turkey's copybook is blotted by many factors from the fiscal rule comedy to the corrosion of independent administrative authorities, and from the independence of the tax administration to the principle of fair treatment.

It is a great shame that the achievements of the post-2001 crisis period are evaporating.

This commentary was published in Radikal daily on 07.06.2011