Greece and Turkey: Economic and Geopolitical Perspectives (review)

198 SAIS REVIEW composed of overlapping, conflictual, and concentric "spheres of influence, hegemonic Imperiums, interdependencies, nationalism, and transíate religious, ethnic, and ideological affinities." In many ways, Graham Allison's essay is the most interesting of the collection. Allison provides a comprehensive review of essential American foreign policy objectives in the postwar era. Looking ahead, he anticipates major changes in the foreign policy environment, and proposes goals and strategies for the year 2000 to meet these changes. While this volume authoritatively elucidates the fundamental factors that define the most basic American international interests, it is not totally devoid of problems. First, it ignores many current and future challenges for American foreign policymakers, such as Third World debt, global environmental concerns , and international terrorism. Second, most essays in the series are short on specific policy directions to meet new challenges and to protect and enhance American interests. All in all, this volume serves as a major contribution to the literature on American foreign policy. It will help scholars and students appreciate the significance of recent changes in the international environment and their effects on U.S. interests and policies. Greece and Turkey: Economic and Geopolitical Perspectives. By Nicholas V. Gianaris. New York: Praeger Publishers, 1988. 204 pp. Reviewed by Landon Thomas, M. A. Candidate, SAIS. As 1992 quickly approaches, the prospect of a truly common market in the European Economic Community (EEC) has focused renewed attention on the EEC's southern flank: Greece, a member since 1981, and Turkey, an associate member since 1964 now aspiring to full membership. Nicholas V. Gianaris' comparative macroeconomic analysis of the two countries is indeed timely. The author discusses whether Greece and Turkey can reconcile their differences over Cyprus and the Aegean Sea to function successfully in an economic alliance, and whether the two countries will be able to overcome legacies of profligate public sector spending, debilitating deficits, inflation, and foreign debt to compete effectively with other European nations. Recent developments in the two countries do not inspire optimism. In Greece, sordid tales of corruption and patronage have paralyzed the government , while the economy suffers from years of PASOK mismanagement. In Turkey , a spate of elections and referendums have precipitated record public-sector deficits and an inflation rate inching inexorably to triple digits. Although the news in Turkey is not all bad—for example, Prime Minister Turgut Ozal recently moved toward full convertibility of the Turkish lira and slashed import taxes—most of Europe is ambivalent about Turkey's ability to operate within the EEC. Lurking behind the economic issues are more sensitive questions of Turkey's record in democracy and human rights, as well as rapid population growth. BOOK REVIEWS 199 As an economist, Gianaris makes some incisive points and valuable comparisons concerning the economies of Turkey and Greece. He correctly points to the public-sector deficit as the chief villain in both Greek and Turkish economies . As a result of "statist" economic thinking, high inflation has been rampant , and the private sector finds itself increasingly crowded by the public sector despite government romancing of foreign and domestic private investment. Only recently have some of the bloated and moribund state-owned enterprises— the primary recipients of public-sector largess— been auctioned in Greek and Turkish markets. Although this is an encouraging development, it is not clear whether either country's capital markets, especially Turkey's nascent stock exchanges , will be able to accommodate the resulting capital infusion. Though Greek and Turkish private sectors have been encouraged to assume a leading role in the development process, steep inflation has resulted in negative real interest rates. Consequently, as Gianaris points out, productive and regionally distributive investment has suffered in favor of speculative real estate ventures along tourist-saturated littorals and in the overdeveloped capital cities of Athens and Istanbul. Any discussion of Turkey and Greece inevitably turns to the geopolitical realities which have divided these countries for centuries. Approximately 35,000 Turkish troops still occupy northern Cyprus, which only Turkey recognizes as the Turkish Republic of Northern Cyprus. In 1987, the two countries came to the brink of war over still-unresolved territorial disputes along the Aegean coast. These tensions cause each nation to allocate inordinate...