2015: Neither a doomsday scenario nor a rosy picture on energy
The 2023 vision is of course very important in terms of serving as an “anchor” for government, business, civil society, international players and more importantly to us as individuals, as it provides a sense of the future direction and perspective. And as an overarching strategic framework, it should always shed light on our policy choices and business decisions.
However, currently no one is seriously interested in what is likely to happen eight years down the road. Attention is focused in large measure on 2015 when critical developments, risks and troubles are expected to occur, especially in the period ahead of general elections.
The forthcoming polls, the succession problem, the Kurdish settlement process, “the war with the ‘parallel structure,’” the fate of the 3 million-strong Syrian refugee population, the “precious loneliness” phenomenon that has paralyzed Turkish foreign policy, the timely rescheduling of the massive foreign debt, the controversial education reforms, the surprises to anticipate with regard to the 100th anniversary of the “Armenian genocide,” the rampant corruption which has downgraded the country in the world league, et cetera – these are the issues the majority are talking, thinking, and worrying about.
In 2015 we will be desperate to hear good news more than ever and look for stories to help inspire us with hope and optimism. Turkey is inextricably linked to the global system. Decisions or choices by the U.S. Fed, China’s Politburo, OPEC and the European Commission can sometimes be more important than those of our own government in certain areas.
Therefore, let’s try to better understand some of the global dynamics that have the potential to affect us next year and beyond.
The United States, 140 years after, will be passing the title of world’s largest economy to China in 2015. The “Middle Kingdom’s” economy is worth $17.6 trillion while the U.S.’ stands at $17.4 trillion. The gulf will be wider in favor of China by 2020: $27 trillion versus $22 trillion. Thus, the assertion that the center of gravity of the world economy has shifted to the east, where two-thirds of the Earth’s population will live in the next 10 years, will become a reality.
However, while China’s economy will slow down to 7 percent in 2015 (which actually means negative growth in the context of China’s reality on the ground), the U.S. is going to enter a real growth period. Oil-producing countries like Russia and Brazil and the chronically low-growth economies of the EU will not bring us much benefit next year.
“The Transatlantic Trade and Investment Partnership” between the U.S. and the EU, which aims at liberalizing a third of the world’s trade, is likely to be concluded in 2015. If Turkey is not included in it, there will be a major adverse impact on our foreign trade and a marked exclusion from the world’s largest trade integration scheme.
The world’s energy supply and demand map has changed fundamentally – it will change further in view of what has transpired with recent price volatility. After falling by almost half, oil prices are going to gradually pick up. The second half of the year will see forward buying of $75 a barrel. Unless there are unexpected developments, count on an average price of $75-80 for 2015.
Renewable “green” energy may not blossom as fast as expected in a low price and demand environment. The country’s leadership should not be complacent and must explore ways of benefiting from this narrow, low price-induced “window of opportunity” by putting its house in order. Energy efficiency will continue to be among the best and least expensive energy security measures.
Unfortunately, the efforts to fight climate change, despite all the warnings, will not go beyond the periphery of our “top priorities” agenda. New “intelligent and smart” technologies will create positive transformations in energy, water and food security.
Geopolitical tensions and risks will not decrease at all; on the contrary, they will create further intense and powerful effects on our economies in 2015. Be prepared for the outbreak of new conflicts, bloody acts of terror and natural disasters. Russia’s annexation of Crimea, provocations for revolt in Ukraine and intimidation in Central Asia and the Caspian region will result in further Western sanctions, which will inevitably harm both sides in turn.
If the Islamic State of Iraq and the Levant’s (ISIL) advance cannot be halted in the Sunni triangle of Iraq and Syria, the risk of Turkey getting into this quagmire will remain strong. How to address the challenge of supporting the Muslim Brotherhood without disturbing relations with Egypt and the Gulf is a tough challenge, but needs to be settled in 2015.
Plummeting oil prices and the failure so far to conclude a nuclear agreement are dealing a double blow to Iran’s economy just as it was starting to recover. The Iranian hopes for rapprochement in 2015 will have to be postponed also due to the upcoming U.S. presidential elections. Not much progress is expected in East Med gas dynamics. The series of attacks, including cyber warfare, on energy and infrastructure will not be surprising.
“Smart” technology will touch almost every part of our lives including communications, food security, oil production, solar energy, space travel, the automobile and the like. Industrial and technology espionage will continue to be the most favored pastime for BRICS countries keen on enhancing their competitive advantage.
If we fail to inspire trust, we can neither expand our trade and cultural hinterland, nor hope to become a genuine regional energy hub at the crossroads of the east, west, north and south. In 2015 we will need more than ever the “decisive, but soft power” approach being put into practice once again.