The clash of blocs of the Cold War era, the Western bloc led by the U.S. and the Eastern bloc led by the Soviet Union, included an implicit and rather messy war conducted through subcontracted militias, anarchist groups and terrorist organizations. This "dirty war," which was fed with the weapons and money of the intelligence agencies of each bloc, killed hundreds of thousands of innocent people over 50 years. With the end of the Cold War, there was a hope that a dirty war would never be repeated; however, this hope was in vain when, starting in 2001, the Afghanistan and second Iraq operations, the Arab Spring and more bloody, wilder operations through terrorist organizations in the region stretching from Africa, the Middle East, the Gulf region, and Central Asia to the Pacific arose.
In the beginning of 2018 by denouncing the "super" power of China and Russia and listing them as "poles" that threaten its interests in the global arena, the U.S. also signaled to the world that the second Cold War had begun. In February 2018, Washington announced its plans to diversify its nuclear weapons inventory with lower level nuclear missiles. China and Russia, reacting to this plan, suggested that the U.S. leave the Cold War mentality in the past. Exactly one year later, last Friday, Washington declared that it has officially suspended its obligations under the Intermediate-Range Nuclear Forces Treaty (INF), which has been the basis of nuclear weapons control since the Cold War period, on the grounds that Russia violated its obligations.
China and Russia will, of course, escalate their reactions and preparations against the "second Cold War" moves accelerated by the U.S. over the last year, especially with hypersonic weapons. Neither the U.S. embargos on Russia, Iran and Venezuela nor its attack on Chinese IT companies are meaningful.
The trade war is symptom of other issues; thus, the fact that the global markets are "hopeful" for the U.S.-China trade negotiations is due to their preference to see the visible portion of the iceberg, so to speak. Some $250 trillion in global debt, defunct economies and the increasing social unrest in the U.S. and the EU have all inspired the U.S. to launch a new "doctrine of war." This is why, as Turkey, we must incessantly stay awake.
Focus on energy and EU
The Country Risk Conference held every year by Coface, one of the world's leading domestic and foreign trade insurance companies, was this year focused on two main topics: energy and Europe's future. The first issue highlighted was the pressure on oil producing countries such as Iran, Iraq, Libya and Venezuela, and how oil production is affected by this pressure. The second important issue was the effect on the global energy demand in response to economic slowdown or even recession risks in large energy consuming countries such as China, India and the U.S. This is why, for today and the future of the global energy trade, the ability of companies of all sizes to manage energy prices and company profitability will be closely monitored.
The pressure Saudi Arabia is getting from the U.S. to cut production, Russia's strong role in the world energy market – despite the U.S. and EU sanctions, and the EU's role in the security of energy supply still keep their positions on the agenda. The expectation that the competition between countries over hydrocarbons and nuclear countries will climb comes to the fore. In addition to this, de-carbonization, i.e. the developments in hydrogen and solar energy, are also on the radar. Another important topic at Coface's global summit was the future of Europe. As you can imagine, experts joining the summit evaluated this based on two important points. The first, of course, was Brexit. The second, on the other hand, was the rising populism in Europe. The risk of commodity producing countries being affected by downward pressure on global commodity prices is also on the global radar.
On the European front, citizens of many EU member states perceive economic activity and unemployment in their countries worse than the real picture. An important expectation is for the euro to be strong. The most important and most sensitive topic for the 28 EU countries is equal pay for equal work. Coface is predicting 1.2 percent growth in the eurozone with Turkey in 2019. There is a strong expectation that Turkey will cope with its problems and will rise again. The prominent memory of leading the international institutions on Turkey points to strong recovery skills.
The fact that Turkey is leading strategies and policies toward the synergy and the balanced and disciplined period established in economic management by Treasury and Finance Minister Albayrak will once again reinforce the perception that Turkey will be appreciated by corporate international institutions.