The Turkish Economic Miracle as a Myth

Goals. The article presents a critical analysis of the ‘Turkish economic miracle’ of 2002–2010 and the subsequent crises, as well as their impacts on the geopolitical positioning of Turkey in accordance with an original concept and methodology. Materials and methods. The comparative analysis of key macroeconomic indicators for Turkey and a reference group of developing countries reveals certain structural imbalances of the Turkish economic model: a chronically negative current account, a low share of high-tech exports, and excessive dependence on consumer lending. These factors undermine the stability of the economy and call into question its long-term prospects. Particular attention is paid to the unconventional monetary policy of recent years based on a neo-Fisherian approach that contradicts conventional economic theory. This policy has led to exchange rate instability and inflationary pressures, which have negatively affected the investment climate. The paper introduces a game-theoretic model of interaction between the government and investors to explain the formation of equilibria in the Turkish economy. Results. Thus, as a result of the comparative analysis, factors undermining the sustainability of the Turkish economy have been identified, which cast doubt on its long-term prospects. In turn, Turkey's monetary policy led to exchange rate instability and inflationary pressures, which negatively affected the investment climate. In terms of geopolitics, it is noted that the relative economic successes of the 2000s contributed to the evolution of Turkey’s foreign policy strategy from Eurocentricity and peacefulness — to the revival of neo-Ottoman ideologies. Turkey’s foreign policy has become more proactive and aggressive, while domestic political processes have contributed to the growth of authoritarian tendencies in the government of the Justice and Development Party. Conclusions. The article concludes that the concept of ‘economic miracle’ is untenable, that the country’s economic strategy needs a fundamental adjustment, and that there are serious challenges to its geopolitical ambitions, including in the context of the discrepancy between neo-Ottoman ambitions and Turkey’s economic capabilities at the present stage.

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