Turkish firms' investment abroad on the rise; is this good or bad?

In the 1990?s, a foreign country or institution showing interest in Turkey?s southeast was received with suspicion by the state. These were seen as modern ?Lawrence of Arabia? initiatives to provoke Kurds in the south of the country.

I was pleasantly surprised to hear that one of the priority areas of the European Bank of Reconstruction and Development (EBRD), which began its activities in Turkey in 2009, was lending on the SMEs, particularly in the southeast. The EBRD in fact opened its third office in Gaziantep last year. The relative stability acquired, especially with the peace process, seems to have encouraged the EBRD to step up its activities in the region.

In Turkey?s tremendously polarized atmosphere where political tension is always high, one tends to slide easily into pessimism and miss the big picture. One expects foreign observers to be more objective.

The EBRD?s outgoing country director for Turkey, Michael Davey, does not hide the fact that political developments in the last two years have had a negative effect on Turkey?s image. But what I call Turkey?s schizophrenic atmosphere has not succeeded in making Davey a pessimist. Maybe he is an eternal optimist. But this is how he explained to me last week why he was optimistic about Turkey:

?This is a diversified country in terms of who owns assets.? He underlined the existence of old but also new elites. As long as politics are diversified (in his words, while 50 percent voted for the current government, the other 50 percent did not) and the holders of influence are diversified, then there is reason to be optimistic.

The diversification in the business community has been a good sign in terms of Turkey?s democratization process.

Yet how are we to...