Whither the Turkish Trading State? A Question of State Capacity

This brief investigates Turkish foreign economic policies with special reference to the post-Arab uprisings. Relying on the “trading state” framework, it offers a critical analysis as to whether the economic dimension of Turkey’s foreign policy proactivism actually functions as envisaged. It claims that substantial state capacity challenges undermine Turkey’s trading state potential. On the external side, the new regional security environment including the civil war in Syria and failed states in the Middle East and North Africa pose enormous challenges to utilize trade and investment as a practical hand in Turkish foreign policy. On the domestic side, Turkey is approaching the middle-income trap that puts the sustainability of its growth and export performance into jeopardy.