x Abu Dhabi, UAEFriday 21 July 2017

The World Economic Forum is the proper place to talk Turkey

The WEF is the closest thing we have to a world laboratory for new ideas in economics, finance and business, and its deliberations usually produce an insightful mix of new opinions and outlooks, writes Frank Kane.

Recep Tayyip Erdogan, the Turkish prime minister, addresses the World Economic Forum in Istanbul yesterday. Bulent Kilic / AFP
Recep Tayyip Erdogan, the Turkish prime minister, addresses the World Economic Forum in Istanbul yesterday. Bulent Kilic / AFP

The World Economic Forum (WEF) is sometimes dismissed as a rarified talking shop that rarely achieves anything concrete.

It's easy to see why. The forum, with its self-proclaimed mission to "improve the state of the world" takes itself very seriously. Subject matters are always high-brow, participants pride themselves on being world opinion-moulders, and its gatherings have a smug, self-satisfied feeling. As though a few days of jaw-jaw will really improve the global quality of life.

Nonetheless, the WEF is the closest thing we have to a world laboratory for new ideas in economics, finance and business, and its deliberations usually produce an insightful mix of new opinions and outlooks.

So it is with the WEF in Istanbul. Covering Europe, Central Asia and the Middle East, it is the first occasion on which such a large geographical area has been pulled together under one forum. With the euro-zone crisis still raging, the repercussions of the Arab Spring continuing to rumble ominously around parts of the Middle East and North Africa (Mena), and with Central Asia in a state of flux, it seems the forum has most of the world's problems under one roof.

The main theme of the gathering is "bridging regions in transformation", which is a neat reference to the host country.

Turkey bridges Europe and Asia in a metaphorical as well as a physical sense, and the Turkish "model" of democratic, tolerant Islam, coupled with economic dynamism, is one many in the Middle East would like to see adopted as an outcome of the Arab Spring.

The three sub-themes talk very much to the concerns of the Middle East. "Harnessing technology and social change" could almost be a direct reference to the role played by the new social media in the upheavals in Tunisia, Egypt and Libya.

The second sub-theme - "rising to the growth and employment challenge" - also has obvious relevance for the Mena region, where youth unemployment has been identified as one of the major issues to be solved in the next decade. But, with European joblessness a big factor in the uncertainty facing the euro zone, it has wider implications, too.

The final sub-theme - "shaping the new governance landscape" - at first sight looks the most nebulous. But a dip into the programme shows its relevance to the economies of the Middle East and central Asia.

There are sessions on the campaigns against corruption in the Mena region and in central Asia, as well as discussions on the role of religion in the region and the problems faced by what WEF calls the "emerging democracies" of Central Asia.

Nonetheless, the issue that is more or less guaranteed to monopolise the forum remains unchanged from the Davos meeting in January - the future of the European Union.

One session is ambitiously entitled "solving the euro-zone puzzle", and whether it can achieve a "solution" in a one-hour televised debate will be a test of the WEF approach, as well as a challenge for the moderator who will oversee an expected confrontation between the Greek finance minister and the governor of the Turkish central bank.

Inevitably, the Turkish economic model is also on trial during this forum. It has won enthusiastic approval from many observers in the wake of the global financial crisis. High growth rates, fiscal stability and financial prudence are things seldom associated with the country, but they have been characteristics for the past four years.

There is a feeling, however, that the country's economic strategy is at a crossroads.

There is a genuine concern over foreign direct investment. How much of the cash that has poured into Turkey in the past two years has been "hot money", looking for an easy poste restante and then flying away when times get tougher? It's hard to say, but the next few months will provide the answer.

If the Istanbul WEF gives some clues on this issue, it will have fulfilled its mission and improved the state of the world.

If it fails to clarify this matter, then it's just a talking shop after all.