If you are a colonial economy, foreign capital comes even without the rule of law

Almost all economists state that for economic development and a level of prosperity, democracy and legal standards must be at the level of the contemporary world. Especially in countries where capital and technology accumulation are insufficient, the rule of law and economic stability (a country without inflation and transparency in economic decisions) are of great importance to bridge this gap with direct foreign capital inflows.

I have an observation regarding Turkey. Foreign capital comes even without the rule of law. Economic historians will evaluate this more clearly in the future. As someone who has written two books attempting to evaluate today's economy by looking through the window of Ottoman Economic History and the Economic History of the Republic of Turkey, I am noting this for history. Turkey is about to transition to a new phase in its economy… 

This is the phase I mean when I say, "Foreign capital comes even without the rule of law." This phase is now the phase of the Republic of Turkey's transformation into a semi-colonial or colonial economy. As a result of the government's 23 years of economic policies, Turkey has ceased to be a country in the world economy that is a partner to be collaborated with, and has begun to be seen as a country whose mines and natural resources are to be exploited.

While we are at it, let us also state this. Profit transfer by foreign capital is something else. Foreign capital also transfers profits in China, which is governed by the Communist Party. Finding foreign currency with high interest rates (hot money) to keep the economy running is a separate mechanism of exploitation. In both cases, value-added is created domestically. A colonial economy is a completely different mechanism. It has no value-added in the economy. The country's resources are plundered, and it only ensures the enrichment of the administrative echelon that distributes the concessions.

Let us also recall that during the AKP government, there was a record level of direct foreign capital inflow until 2018 due to full membership negotiations with the EU. Although a significant portion of the incoming foreign capital was not for export-oriented investments that would ensure Turkey's development, but rather for investments aimed at the domestic market, it was still important in terms of closing the savings and investment gap and controlling inflation. (260 billion dollars in 20 years compared to 14 billion dollars in the first 80 years of the Republic.) Since 2018, when we switched to a one-man regime, we have been witnessing a serious decline in direct foreign capital inflows. The incoming foreign capital is leaving. Domestic capital, including that of AKP-affiliated wealthy individuals (politicians, businessmen, high-level bureaucrats), is fleeing abroad.

THE PROGRAM IS NOT WORKING, THE ECONOMY HAS COLLAPSED

The economy is clogged. There are no technical measures left to be taken in the economy. The program they say is working is not working. The policy of finding foreign currency from abroad and lowering inflation by suppressing the exchange rate with high interest rates is not working. Inflation has become sticky. We have to pay more and more interest to hold the exchange rate and find foreign currency. The current account deficit and foreign trade deficit are spiraling out of control.

The same applies to the budget. Not the slightest concession is made from the resources transferred to cronies and religious sects. The budget deficit and interest payments have reached alarming levels. Agriculture has been destroyed. Industrial production is declining. 80 percent of the population lives at or far below the poverty line.

Turkey needs foreign currency to turn the wheels of its economy. Foreign currency found with high interest rates was a separate order of exploitation. Now, the foreign currency found this way is no longer enough. We have hit the wall. We need foreign investors who do not question the law and who are not bothered by the one-man regime. We need a new field and a new type of investor…

The solution the government has found is painful. What are our mines for?

I wrote about this in Ege Saati Gazetesi on May 26, 2025, and I am summarizing it.

There is a dollar billionaire named Harold Hamm, a close friend of Trump, an honorary interior minister, an oilman, and a mining businessman. On March 14, an agreement whose details were not disclosed was signed between Harold Hamm's company, Continental Resources, and the Ministry of Energy and Natural Resources. According to this, Hamm was to establish an oil drilling site in Thrace and Diyarbakır. Also, around those days, a phone call took place between President Erdoğan and Trump. On March 19, a judicial coup was carried out against Ekrem İmamoğlu.

If there is no law, does foreign capital come? On May 23, 2025, a reporter from the American television channel Fox News asked this question to Trump's friend, the honorary interior minister, oilman, and mining businessman Harold Hamm.

"As an investor, are you worried about Turkey?"

Hamm's answer shows very clearly what has become of Turkey:

"These things happen in countries that are not democratic or where there is democracy to some extent but it is not sufficient. You know, you put your opponents in jail and you take care of them. I am not worried."

On May 26, in Ege Saati Gazetesi, I wrote the following under this statement by Hamm.

"In the coming days, a Super Permit law will come to Parliament for mining and energy monopolies. The way will be paved for companies to plunder the environment, forests, olive groves, pastures, natural resources, and agricultural lands as they wish. They were already plundering, but things will become easier and faster. The details of this law were discussed and debated between Harold Hamm's company, Continental Resources, and the Ministry of Energy and Natural Resources on March 14."

Two days ago, on Friday, July 18, 18 articles of the law that will destroy olive groves, forests, pastures, agricultural lands, and water basins were accepted in parliament with the votes of the AKP and MHP, despite all the opposition from society. Even without the rule of law, if you grant great concessions and revive the capitulations, foreign capital will come running.

There is no country in history that has become wealthy by selling raw materials. The period of recklessly distributing mining licenses and plundering raw materials and natural resources is a transition to a full semi-colonial or colonial country period.

AMBASSADOR OR COLONIAL GOVERNOR?

While making the determination of the transition to the characteristics of a colonial economy, let us also look at this period through diplomacy and foreign relations. The US Ambassador to Ankara, who is also the special representative for Syria, targets the Treaty of Lausanne, cites the Treaty of Sèvres as an example, and praises the Ottoman Millet system for Turkey instead of a secular and unitary republic. It is unclear whether he is an ambassador or a colonial governor.

Even if we appear to be an independent state on paper, decisions regarding Turkey are made abroad. Also, a reminder: the title deed of the Republic of Turkey, the Treaty of Lausanne, was not just an agreement about borders. The capitulations granted by the Ottoman Empire to foreign countries and companies were also abolished with Lausanne. The first breach in Lausanne began with the loss of economic independence.