Last week I attended a meeting held by the Arab League General Secretariat in Cairo. Representatives from the Arab Union member countries discussed how Turkey could be a model for Arab countries that were going through process of renewal. My role in the meeting was to share Turkey's experience in the field of economic development. The best part of the meeting was the debate session. The quality of the questions on Turkey's economy asked during the meeting confirmed the curiosity and the interest of Arab countries about Turkey and their appetite for learning lessons from the Turkish experience.

It appears that the "model Turkey" issue will be widely discussed also in the coming period both here in Turkey and throughout the Arab countries. I want briefly to ­share the ideas the meeting in Cairo raised in my mind on this emerging debate.

• Not a model but a source of inspiration. I believe that it would be wise not to use the term "model" without setting forth concretely "what" Turkey can offer the region with respect to sharing experience and through which channels this experience can be transmitted to the Arab countries. It would be best for Turkey to learn how to be modest and to talk less in Turkey, but do much more in the region on these issues which require soft power. But we have a long way to go in this regard. Until we learn how to deal with this or the capacity of the Foreign Ministry grows by ten times, for instance, we had better say "we can be a source of inspiration," instead of arguing that "we are a role model."

• Reforms and anchor. If the Turkish model actually exists, the underlying source of this must be the reforms that turned Turkey into a normal country in its geography as well as the country's ability to transform itself. There is much to discuss about the political dimension of this normalization process. The economy distinguishes Turkey in the region as much as the politics do. The steps taken since 1980 to ensure liberalization, integration into the world economy and to increase the weight of the private sector in the economy, together with the infrastructural efforts have been the driving forces of the capacity attained today. But what Turkey failed to do in the 1990s is as important as what it achieved in the 1980s.The Arab countries can learn from the steps from the process preceding the 2001 crisis and the first generation reforms initiated in the aftermath. More importantly, there are critical lessons to learn from the high-cost second generation reforms that Turkey is still to initiate (tax, education, public administration, judiciary, and constitutional). Moreover, the roles the European Union and the IMF have played in steering the content of the reforms in Turkey also must be stressed. One of the main issues for today is which institutions through which channels will serve as the reform anchor for the Arab countries. The Arab League, the Organization of the Islamic Conference, and the Islamic Development Bank are the first to come to mind. However, these face severe capacity constraints. Turkey can play a key role in their renewal.

• Development of bilateral trade. The recent increase in the volume of trade with the Arab countries is pleasing for Turkey. However, it appears that the economists in the Arab countries do not agree with us. Although the products made in Turkey are considered to be "high-quality" by the people of the region, we have to keep one point in mind: Turkey predominantly imports raw materials and semi-finished products from Arab countries and exports industrial goods. As healthy as it might seem for Turkey, this signals an imbalance for the Arab countries. It appears that trade imbalances in the Arab countries cannot be solved unless the private sector develops and the industrialization process gains pace. In this regard, Turkish business people who enjoy the biggest industrial capacity in the area between Italy and China had better consider the countries of the region not from a trade-oriented perspective but as a potential investment hinterland. This might not happen automatically. To this end, the investment incentive system might be expanded to include mechanisms similar to those initiated by the US. The development of the free market economy institutions and industrial infrastructure in Arab countries could be the main axis of Turkey's foreign aid strategy.

Social policies. The steps Turkey has been taking in the field of social policy are among the issues about which the experts from the Arab countries are most curious. After all, for a country that is to launch a serious reformation process, it is of critical importance through which channels the sectors of the society to be affected most severely by the reforms in the short term and how their losses will be compensated. The recent steps Turkey has taken in the fields of education and health in particular involve important lessons for the Arab countries in terms of their social impact, though the economic impacts have yet to be identified. TOKİ (Mass Housing Administration of Turkey) experience and the cheap housing attempts are among the social policies in which experts from Arab countries are most interested. It would be wise to address mistakes as clearly as successes when sharing the reform experience. We must let them decide which parts to take. For instance, when talking about the TOKİ experience, we must pay attention to the capital accumulation in the private sector, one of the critical needs of the Arab countries. These were the issues debated most heatedly in the meeting I attended. Today, Turkey is maybe the biggest source of inspiration for the Arab countries. Turkey can become a model only after it starts to assess the ongoing transformation process from a more objective perspective. I believe that no country can be a better model than Turkey, which has the capacity to solve its problems via peace, stability and prosperity.

*Esen Çağlar, TEPAV Economic Policy Analyst, http://www.tepav.org.tr/en/ekibimiz/s/1025/Esen+Caglar