I was at a TEPAV-BP-Energy Ministry event when I saw why Iran had invented Hasan Rouhani: in 2011, the major disruption to the supply of oil was the Libyan uprising against Gaddafi. In 2012, it is Iran.

That is where oil production has declined the most. Why? It is the sanctions. The share of Iranian crude oil has declined considerably across European oil imports. Which country is replacing Iran in providing oil to these European countries? Libya. It looks like the New Libya without Gaddafi is contributing quite a bit to the success of economic sanctions against Iran. So the Arab World without Gaddafi is the reason for Hasan Rouhani emerging, if you ask me. Oil exports are important for Iran.

Yet, we should give credit to our Iranian friends. I have to confess that they are a flexible people, while we, in Turkey, are not. Right after the Iranian elections, I asked the meaning of a change of guard in Iran for Turkey. Hardliners were replaced by moderates. That is what Rouhani talked about during the presidential elections, in comparing his platform to those of his adversaries. And he won. Supreme leader Khamenei gave him his blessings. Then he started the charm offensive with amnesties and other steps inside the country. So what does it all mean for Turkey?

I have to confess, a normalized Iran focusing on the prosperity of its own citizens instead of on giving divine order to the world and the region means bad business for Turkey. This has two meanings: First, a pariah Iran would increase Turkey’s land value. That was how we financed our current account deficit in the past. It was like a free ride before the 1980s – government to government funding. We lost that advantage after the Cold War, but Iran helped us to get that same status back. The nuclear program attempt in a diplomatically isolated Iran was very good for Turkey. Secondly, an Iran dealing with holy wars around the globe and in the region means an Irannot integrating into the global economy. That left a vast area for Turkey with no competition in the region. Aside from Israel, there was only Turkey as a market economy. With its effective state apparatus, I know that Iran could easily surpass Turkey with well-managed structural reforms. As things stand, I see no easy chance for Turkey.

Rouhani means competition to Turkey in both democratization and structural reforms. Turkey, then, has to go back to basics in its Europeanization process. Normal Iran requires a more democratic and European Turkey. Can we think of the recently announced democratization package as Turkey’s response to Rouhani and the new Iran? Unfortunately not. You cannot be half-pregnant, or half democratized, for that matter. The new democratization package is just a barrier in the democratization process. Utterly Baathist, if you ask me. “If there is the need for democracy, we will bring it to you, no need to worry.” This cannot be the way forward. As the Iranian transformation unfolds, Turkey will need to be much more serious in its democratization efforts and structural reforms. This is a race. And we seem to be not very aware of it, let alone be prepared for it.

This commentary was published in Hürriyet Daily News on 05.10.2013