Discussion Papers by Mustafa Metin Başbay
TRT World Research Centre, 2020
In order to reverse the economic, political and social malaise caused by 40 years of neoliberalis... more In order to reverse the economic, political and social malaise caused by 40 years of neoliberalism, the US economy requires substantial reforms in areas ranging from taxation, public spending, and trade relations, to labour market regulations, and market concentration. If Biden makes the mistake of trying to turn back to pre-Trump ‘normalcy’ rather than paving the way for a different economic model, Trumpism, broadly construed, will live on with some very dangerous consequences. What American politics require is not a recovery in the strict sense of the word, but radical reform which will transform the American economy towards a more inclusive, egalitarian, and sustainable structure. History teaches us that unless the government acts quickly and radically to respond to the crisis, there will be a political reckoning, which may be uglier than even the last four years of American political life.
TRT World Research Centre, 2020
This paper advances the idea that the pandemic has been a seismic event for government economic p... more This paper advances the idea that the pandemic has been a seismic event for government economic policies around the world. Even after the pandemic is brought under control, its consequences are likely to have a major long-term impact on issues ranging from government fiscal behaviour to international borrowing and trade. Moreover, rising government debt will serve to tilt the economic balance between developed and developing countries in favour of the former due to the fact that developed economies have much wider fiscal flexibility than developing countries. However, in the case of a catastrophic economic downturn in developing countries, such as another lost decade of economic growth, there may be damaging side effects for developed countries as well. Unless developed economies act quickly and boldly to alleviate the debt burden of developing countries, the potential for a total collapse in international finance and trade will substantially increase. This may also lead to a new wave of migration towards developed countries, with significant implications for domestic politics in these countries.
TRT World Research Centre, 2020
Countries leading in renewable energy technologies stand to reap significant economic benefits in... more Countries leading in renewable energy technologies stand to reap significant economic benefits in the near future. In this regard, there is fierce competition between major economies, such as China, the US, the EU, and several others. Furthermore, many countries are dependent on energy imports, which cost them billions of dollars every year, whereas others including the Gulf states, Iran, and Russia are dependent on revenues from energy exports to keep their economies and political systems viable. Moreover, the energy trade is a strategic dimension of international relations. Thus, the growing importance of renewable energy sources may permanently tilt the power balance in the international system by taking away an important geopolitical leverage from some while empowering others. This paper argues that the ongoing transition towards renewable energy has significant implications beyond environmental impacts. Given the importance of fossil fuels in modern economies and the geopolitical balance of power, the transition to renewable will deeply influence economic, political, and geopolitical relations between states.
TRT World Research Centre, 2020
This paper first introduces a short discussion of general trends affecting emerging economies, wh... more This paper first introduces a short discussion of general trends affecting emerging economies, which have emerged during the Covid-19 crisis. It discusses how seven major emerging economies, including China, India, Brazil, Mexico, Indonesia, Turkey, and Argentina, have dealt with the Covid-19 crisis so far. It focuses on both public health policies to restrict the spread of the virus and reduce death ratios, and economic policies to mitigate economic consequences and keep businesses afloat. The discussion includes reflections on how growth trajectories of specific economies have been altered by the pandemic and what the global economic hierarchy might look like in the post-pandemic world.
TRT World Reseach Centre , 2020
This paper argues that the Covid-19 crisis will accelerate the major policy transformation alread... more This paper argues that the Covid-19 crisis will accelerate the major policy transformation already underway in developed economies towards a Keynesian framework. First, it summarises the long-hold discussion between those who supported unregulated free markets and those who believe in the necessity of government intervention and regulation. Second, it introduces the theoretical bases for the argument that governments in developed economies should intervene in their economies to keep them healthy in the current situation. Third, it discusses the spending packages proposed in the US, the UK and Eurozone based on what we know about them so far. It concludes that the new Keynesianism is likely to live on and bring about what it promises.
TRT World Research Centre, 2020
This paper introduces the recent history of the Turkish economy, and explains the main dynamics t... more This paper introduces the recent history of the Turkish economy, and explains the main dynamics that led to high-income growth since the early 2000s. Secondly, it describes the nature of change in the government’s approach to the economy and explains why government interventionism, including trade regulations, is required for changing the sectoral composition of production towards more sophisticated, high-value-added industries. Finally, it reflects on how trade regulations should be applied and the missteps that should be avoided on the ground. This paper concludes that the deep transformations caused by the Covid-19 crisis provide developing countries like Turkey with more space and flexibility for policymaking. This enables Turkey to take bold steps in realising its ambitions. Overall, this is a positive development, but it should be well-designed to reap the maximum benefits.
TRT World Research Centre, 2020
This paper critically discusses the rescue packages introduced by governments to counteract the e... more This paper critically discusses the rescue packages introduced by governments to counteract the economic consequences of the Covid-19 pandemic and explore the potential pathways governments can take in the near future in order to trigger sustainable and inclusive recovery. It concludes that in the likely event that the pandemic continues for a prolonged period, governments will have to come up with unconventional solutions beyond pumping liquidity or boosting demand in the short run. This may include a stateled reorganisation of the entire economy. While being a major challenge, on par with war-time economic efforts, this may also be an opportunity to transform economies towards a more favourable model.
TRT World Research Centre, 2020
While the world economy is bracing for a profound crisis due to the coronavirus pandemic, an impo... more While the world economy is bracing for a profound crisis due to the coronavirus pandemic, an important discussion has started on how the pandemic may transform the world economic order in its aftermath. This paper argues that the pandemic may lead to a major paradigm shift in economic thinking. In times of crisis, governments necessarily claim more control and responsibility over the socio-economic order. Residuals of such government activism are likely to remain as will the impact of the pandemic on the economy. More interventionist, proactive governments may replace the minimalist, neoliberal governments that have dominated the post-1980 world. In many ways, this represents restoring the welfare state and a return to the post-war Keynesian consensus in policymaking. Another likely consequence is a retreat from the hyper-globalisation of the recent decades. In the context of developing countries, this implies that developmentalism and industrialisation policies may once again become the norm.
TRT World Research Centre, 2020
This paper provides a short introduction to the heated debate over the economics of climate chang... more This paper provides a short introduction to the heated debate over the economics of climate change. It discusses the main economic trends in the modern age which contributed to the emergence of an environmental crisis. Second, it investigates the economic implications of increasing environmental degradation, which involves an analysis of the asymmetric effects of climate change on developed and developing countries. Lastly, some solutions proposed by professional economists are examined. Taking the claim that climate change mitigation remains within the realm of possibility as a basis, an argument is advanced regarding the profound changes the economic system must undergo in order to avert disaster. Ironically, the modern world’s great dynamism and capacity for change, which led to the current crisis in the first place, may be the most important advantage humanity has in this battle. However, successful mobilization of this power first requires a reformation in the international political economy.
TRT World Research Centre, 2019
This paper seeks to address the reasons why the world economy may be headed towards a synchronise... more This paper seeks to address the reasons why the world economy may be headed towards a synchronised recession in the near future and why governments and central banks, particularly in developed countries, are not ready for it. This rests on the claim that most developed countries seem to have exhausted the traditional channels through which they can mitigate the consequences of a potential recession. Governments and central banks have not been able to reverse the expansionary policies they adopted during the 2008 global financial crisis. Interest rates have remained very low in many major economies while public debt has reached unprecedented levels globally. So, unlike the 2008 crisis, governments and central banks do not have proper fiscal and monetary arsenals at their disposal, which countries normally use to fight recessions. Therefore, the global economy may be facing a potential deadlock, which, according to some economists, will lead to a deep paradigm shift in policy making.
TRT World Research Center, 2019
This paper discusses the ongoing trade war between China and the US, the economic and political d... more This paper discusses the ongoing trade war between China and the US, the economic and political dynamics which led to this confrontation, and the respective positions of the two countries. It makes the case that economic tension between the two countries is unlikely to be resolved any time soon. Furthermore, if left unresolved current tensions have the potential to balloon into a full-scale economic war with global implications. This is because the economic confrontation between the world’s two largest economies is not an issue of agency but of structure, in the sense that trends in global politics and economic relations are driving the two countries towards a conflict regardless of who is in power. This current trend has the potential to determine whether the 21st century will be another American century or one dominated by China’s vision for the future.
In the last two decades, Turkey has experienced a successful growth performance. However, as the ... more In the last two decades, Turkey has experienced a successful growth performance. However, as the benefits of neoliberal restructuring has been exhausted and Turkey’s sectoral transformation from agriculture to manufacturing mostly completed, Turkey now needs to embark on a new path of reformation in order to overcome middle-income trap and maintain its high growth trajectory. Following the example of East Asian growth miracles, Turkey should formulate its own Industrial Policy and use selective government interventions rather than a 'hands-off' approach in the economy. In that respect, a paradigm shift in policy-making in favour of more government activism in the economy is already visible. Proactive policies to protect and support a number of carefully-selected strategic sectors have a central role in this endeavour. Export-oriented sectors should be pushed forward in the economic agenda, and growth should depend more on sophisticated, high-value-added, high-tech production, a task to which the current government seems to have already committed. In the process, the Turkish economy can improve its productivity levels and transition to the high stage of economic development.
It is natural that immigration, just like any other change, disadvantages some segments of the so... more It is natural that immigration, just like any other change, disadvantages some segments of the society. And, the risks and costs of immigration are not negligible. However, immigration is also an opportunity for the domestic countries as it contributes a young and vibrant community to the society. It creates better job opportunities for the natives while helping economies grow. Turkey, as an economically rich and politically stable country, will continue to be a magnet for people flowing from its poor, war-torn, or authoritarian neighbours and even countries as far as in Africa. Turkey should make the best of it. It is by no chance that so many successful examples of economic growth in the history went hand in hand with a stable and long-term influx of migrants. The overall effect of immigration depends on having the proper institutional framework on the ground to facilitate smooth integration. Government has to formulate policies and create the legal basis for educating, employing, and culturally incorporating the immigrants. This will benefit the migrants and natives alike."
This paper seeks to contextualize the political and economic crisis in Venezuela by exploring var... more This paper seeks to contextualize the political and economic crisis in Venezuela by exploring various root causes and perspectives. Beyond the headlines, it grounds understanding of the core issues in a broader economic and geopolitical context by framing the crisis in terms of the so-called ‘resource curse’ economic paradigm and the long history of US interventionism in the region. Finally, it argues that in order to protect the integrity of the rules-based international order, it is imperative for the international community to reject foreign political intervention and uphold the sovereignty of the Venezuelan people.
Dramatic shifts in Western politics can only be understood within a wider perspective of a changi... more Dramatic shifts in Western politics can only be understood within a wider perspective of a changing power balance between the poor and the rich in recent decades. Rising populism is largely driven by this deepening sense of losing power and economic security. Political action is motivated by these dynamics and it challenges the prevailing economic paradigm. Western economies need a structural transformation in the way established economic order is functioning. The situation calls for an abolition of neo-liberal policies and the establishment of a new social contract, one that is based on a more collective mentality.
This discussion papers summarises the discussion of whether manufacturing has lost its significan... more This discussion papers summarises the discussion of whether manufacturing has lost its significance for economic development in favour of knowledge-based services. A case analysis of Turkey is provided in a separate section. Turkey is a revealing example in the sense that both services and manufacturing sectors played a crucial role in its economic growth. Furthermore, there is an ongoing discussion about whether Turkey is overly dependent on construction and serviceled sectors while its manufacturing sector has not developed enough to spur productivity and create more jobs for its young population in recent decades.
This paper investigates what a potential BRICS membership might economically mean for Turkey in t... more This paper investigates what a potential BRICS membership might economically mean for Turkey in the light of the recent crisis in Turkey-USA relations. It concludes that even though Turkey may benefit a lot from substantial economic ties with the BRICS, it is an unlikely substitute for Turkey’s well-established relations with the West. Turkey’s link with the BRICS should not be about replacing its ties with the West but further strengthening them by improving Turkey’s power and importance in the global governance via alternative alliances.
Reports by Mustafa Metin Başbay
TRT World Research Centre, 2019
2020: The Year Ahead focuses on twelve key events and flashpoints across the globe to watch out f... more 2020: The Year Ahead focuses on twelve key events and flashpoints across the globe to watch out for as the year unfolds. The report focuses on themes and hotspots that are likely to feature in the news cycle more frequently than others. For instance, Iraq, Lebanon, and Algeria will continue to experience political, economic and social upheaval as they move through their respective political transitions. Similarly, developments in the Eastern Mediterranean, Saudi Arabia, Kashmir, the Sahel Region, as well as other issues, will be examined and analysed with forecasts provided regarding their potential trajectories.
TRT World Research Centre, 2018
This report provides a look ahead at 2019, focusing on what TRT World Research Centre researchers... more This report provides a look ahead at 2019, focusing on what TRT World Research Centre researchers believe will be some of the most significant issues facing the world. From the continued aftermath of the killing of Jamal Khashoggi, the war in Yemen and a decisive year for Turkey, to Brexit and the ongoing trade dispute between China and the US, our researchers offer their engaging and insightful analysis of the year to come in world affairs. The report looks ahead to major developments in Turkey, the MENA region, Asia, Europe, Africa and the United States, putting them in context and analysing their possible impacts in light of ongoing shifts in the global order.
Papers by Mustafa Metin Başbay
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Discussion Papers by Mustafa Metin Başbay
Reports by Mustafa Metin Başbay
Papers by Mustafa Metin Başbay