Turkey and the Kingdom of Saudi Arabia

TURKEY AND THE KINGDOM OF SAUDI ARABIA: COMPARISON ON CULTURE, TRADITION, AND ECONOMY

Introduction

Turkey and the Kingdom of Saudi Arabia are two predominantly Muslim territories, but of varied culture, tradition, and economy. Most people seem to perceive the two countries as identical and of common grounds. They may not have read the series of colonization's that Turkey went through, and the series of civilizations that emerged in the area. On the contrary, Saudi Arabia has consistently been ruled by the inhabitants. Chances are high that only by going through the pages of history of the two countries can people have a clearer view of what have evolved to be the culture, tradition, and economy of Turkey and the Kingdom of Saudi Arabia which is contributory to their resilience to the global economic downturn.

Body

The geographical location of Turkey makes the country a vantage point over the Middle East, Asia, and Europe. This largely influenced the interest of many neighboring countries to subjugate the area. Conquest did not only mean ruling the inhabitants of turkey. Conquest included the influx of foreign arts, culture, and traditions into Turkey. Records have it that from 1251 up to 1939, Turkey's respective government signed treaties, attended conventions, and signed agreements among different neighboring nations which had interest over the country as a colonizer (Shotwell and Deak 179- 181). For example, in 1251, the Turks took into custody Egypt. As a consequence, France who had a dispensation over the area must end the same. So, St Louis and the Sultan of Egypt concluded with a treaty, closing all of French interest in Egypt as well as in Turkey. But, the end of French concessions in the two countries did not mean that the Francs left with everything that they have brought into Egypt and Turkey. Many of their arts, genes, cultural practices, traditions were left behind with the Turks. Aside from that, merchandize exchanges continued as shipping vessels went through the Black sea reaching Constantinople (Shotwell and Deak 14-15).

Many other Westerners like the English people and the Germans who were traders went through the Black sea to reach Constantinople. The neighboring Russians and Persians also brought in their trades to Constantinople, an area accessible to Greece. The Greeks too uses the same location to trade with other countries beside Turkey (Shotwell and Deak 14-15). Alongside, Turkey was also actively involved in trading for their needs and to sell their products outside the country. These activities hugely imported into Turkish people mixture of influences. In the early 14th century, the Ottomans' captured Turkey from the Byzantium emperors which were mostly Catholic Christians and established Islamic Faith in the area (Hitchcock, Lloyd, Rice, Lynton, Boyd, Carden, et al 161) which persist to date.

In contrast, in Saudi Arabia since about the 5th century after the death of Christ and during the onset of Islam under Mohammed, Bedouins of the Arabian Peninsula shielded their territory from colonializations. Although, Arabs travel far and wide, and people from different races were allowed entrance and exit, this was only for trading purposes which practices persist to the present time. After the death of Mohammed, Islamic religion was vastly adopted and upon which basic lifestyles, mores and traditions were largely based. A Caliphate was installed as a civilian leader of the land. But as soon as the first Caliph died dominion was left to the family of Ibn Saud. Monarchy was established to maintain the tradition and lead the people into a solid society despite religious differences, and some influences from Western and Asian neighbors (Lipsky, Ani, Bigelow, Gillen, Larson, Matthews, Royce, and Gillen 8).

Unlike Turkey, the Kingdom of Saudi Arabia relies on their vast oil deposits which are regularly exported. The magistrate established large corporate companies in association with foreign nationals for the harvest and purification of oil into many other products. From the proceeds of oil, infrastructure developments followed as well as the modernization of basic services. Citizens as well as expatriates that work in Saudi Arabia avail of the basic services at no cost. For example, electricity is free, or when one is sick, the ill person will just have to go to the hospital for free accommodation and treatment when found necessary. But, the government pays for the services of the hospital staff as well as all the other hospital expenditures. People do not have to pay taxes either, after their pay. All the money that is spent by the government comes from the oil revenues. Citizens only spend their money for personal needs that are basic to living, like food, and some luxuries like car or vacation. Even schooling is free, except when people choose to be studying outside the country (Cordesman 3; and Lipsky 1-2).

With the global economic downturn, oil revenues also fluctuated forcing the magistrate to cut down expenditures. These were felt mostly on budget allocations for expatriates working in Saudi Arabia. So hiring foreign workers was trimmed down. But the basic services as well as the wages of workers are not affected. This is because the basic human sustenance especially in terms of food of workers comes from their wages. In the Islamic faith which is the religion of most Saudi Arabians and the magistrate, no one should be left hungry. Although, food donations are also in abundance where the rich offers sacrifices for the poorer neighbors (Cordesman 3).

In terms of oil production and its subsequent by-products, manufacturing is based on futures contract. These are the deals currently done at a prearranged cost (Johnson 3). However, some sectors outside the kingdom visualize the need for domestic redirections considering the limits of petroleum reserve in nature. Cordesman (3) supposed that the idea of moving away from dependence on oil revenues must be seriously considered. Also, the concept of dependence on foreign labor must be redirected to tap local citizens, and meet the ideals of the younger generations (Cordesman 3).

But, the prospect of these brilliant concepts does not fully embrace the Islamic culture of Saudi Arabia. For example, in the past when people were in pagan worship, before the advent of Islam, prosperity was limited and viciously fluctuating among the few. This was intermittent due to minor frictions among the illiterates which sometimes affect several tribes within the Peninsula. But, the lives of people improved and developed after pagan practices were eradicated and people started to gain knowledge as a tribute to the very first revelation to Mohammed. Thus, it could be safe to say that in reality the current global crisis has not really affected the Saudi Arabian culture. As most believers would only say, difficulties are brought about by the workings of human hands that disobeyed. Because there are only two choices, to do right and enjoy abundance, and to do wrong and reap curses (Ali 22-26).

Turkey in contrast, organized and became a republic in 1923 (Mango 54). However, Turkey remained to be dependent on Saudi Arabia, Iraq, Iran, and Libya as primary oil and energy suppliers (Liel 33). The countries natural resources for coal does not event account for a significant fraction of its energy supply requirement. Other products of the country are iron ore, copper, chromium, antimony, mercury, gold barite, borate, Celestine, emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites, and clay (Index Mundi).

At the early part of the republic, most of the citizens produce farm products like tobacco, dried fruits and nuts which were the country's primary source of income, while entrepreneurship was left to the foreigners. The global economic crisis in 1929 ruined the economy that was primarily government controlled. But, this brought in more foreign assistance and the outflow of citizens to work overseas. While the foreign assistance was debt from creditors, foreign remittances augmented the country's much needed inflow of cash. This marked the turning point in the Turkey economy. Liberalizations or privatizations of institutions like banks became inevitable (Mango 57).

Although there came a point in time where foreign borrowings went beyond domestic earnings, pressures from creditors assisted Turkey to rise back and stronger from the economic downturn. Turkey then put up Istanbul Stock Exchange which brought in huge number of speculators. The boom was cut-short by the Gulf-war in 1994. But, resilience seems to run the gamut of Turkey society. In exchange for the gold worn by most Turkey women, stock certificates were issued with attractive interest. Gold jewelry trading was then initiated in the Middle East with Turkey as the prominent supplier. Despite the disparity between imports and exports, tourism boomed with low accommodation prices, and cheap consumer goods. Tourism alone brought to Turkey coffers some 4 billion in US dollars from 1982-1992 (Mango 59).

Indeed, unlike Saudi Arabia with its more conservative economic policies, Turkey despite having to depend on foreign sources of oil became the melting pot of goods, services, traders, and entrepreneurs which contributed to the rich and very resilient Turk culture.

In the November 24, 2004 report by the International Monetary fund, Saudi Arabia has remained to be primarily reliant on hydrocarbon revenues. But, in the face of volatilities in demands and prices, conservative portfolios pervades with a resilient and modernized banking sector. This is because of the appropriate and considerable amount of capital in reserve duly regulated and supervised to withstand market surprises. So, lending and payments through banks continue to flourish. In fact, prospective entry of foreign banks to the market are anticipated, but, in as much as the Culture of Saudi Arabia prevails over the aspects of insurance and leasing, developments has yet to be done (Ingves and Khan).

Traditionally, Islamic culture does not permit patronage of insurance, and permits lease to certain limits only. So, these barriers to entry must be surmounted by incoming investors. Apparently, the lack of governmental insurance organizations, and private insurance systems which may have encroached into public and private incomes and funds in the land sustained the Saudi Arabian economy in the midst of global economic crisis, and left the citizens untarnished by financial distress, except for those who ventured outside the country.

In the 70's there were only 4 foreign-owned banks in Turkey. Subsequently, with more liberal policies in placed more entries to the market were observed. Obviously, these benchmarked better financial flows in the area, although, majority of the banks were still government-owned organizations (US Library of Congress).

In January 2008, the association of banking systems in Turkey reported that with a central bank, there were already 48 banks in the whole of Turkey, with 7480 domestic branches and 50 international branches (TBB). These banks were actually a mixture of government, foreign, and Islamic banks. Government banks usually funds government projects and subsidize the agricultural sectors, these ensured Turk resilience to the current economic crisis (TBB).

Nonetheless, despite intensifying business finance climate in Turkey, still the country needs foreign inputs. In July of 2007 The National Commercial Bank of Saudi Arabia purchased 60% of the assets of Turkiye Finans Katilim Bankasi (HSBC). The National Commercial Bank of Saudi Arabia according to HSBC report paid in 1.08 billion US dollars to Turkiye Finans Katilim Bankasi on July of 2007, thus, cornering the major stake holding of the company. But, this was largely facilitated as it appeared, that Turkiye Finans Katilim Bankasi does not charge interest on its Muslim clients borrowed money, neither does it pays interest on clients deposits. Turkiye Finans Katilim Bankasi has declared total assets of 5.2 billion US dollars from its 160 branches all over Turkey. But, this only accounts for a portion of the 4 % of the total Islamic banking systems in Turkey (HSBC). Nonetheless, National Commercial Bank of Saudi Arabia is the largest in the gulf area, which clearly indicates that banks in the Kingdom of Saudi Arabia are liquid and have ready funds to invest outside of the territory especially.

In essence, Turkey and Saudi Arabia's similarities lie within the realm of religious foundations, but each evolved economically and politically according to the limits of their natural resources, thus creating dissimilar cultures.

Reference

Ali Yusuf, Abdullah . The Holy Qur'an. Dar Al Arabia: Beirut, Lebanon. 1935. 22-26.

Jackh, E. (1952). Background of the Middle East. Ithaca, NY: Cornell University.

Johnson, Bill. The Single-Stock Futures Revolution. United States of America: 21st Century Investor Publishing, Inc. 2002.

Hitchcock, H. R., Lloyd, S., Rice, D. T., Lynton, N., Boyd, A., Carden, A., et al. (1963). World Architecture: An Illustrated History. New York: McGraw-Hill.

Liel, Alon. Turkey in the Middle East: Oil, Islam, and Politics. Trans. Emanuel Lottem. Boulder, CO: Lynne Rienner, 2001.

Lipsky, George A., et, Moukhtar Ani, Mildred C. Bigelow, F. Gillen, Thomas J. Larson, A. T. J. Matthews, Charles H. Royce, and Sheila C. Gillen. Saudi Arabia, Its People, Its Society, Its Culture. New Haven, CT: HRAF Press, 1959.

Shotwell, James T., and Francis Deák. Turkey at the Straits: A Short History. New York: The Macmillan Company, 1940.

Liel, Alon. Turkey in the Middle East: Oil, Islam, and Politics. Trans. Emanuel Lottem. Boulder, CO: Lynne Rienner, 2001.

Mango, Andrew. Turkey: The Challenge of a New Role. Westport, CT: Praeger, 1994.

Website

Banks Association of Turkey (TBB)

http://www.allaboutturkey.com/banks.htm rets: 6/24/09.

HSBC. Turkey's finance sector finds profit in participation. Foreign interest spurs growth in Islamic finance

http://www.hsbcnet.com/country/tr/turkiye_finans.html. 29 September 2008. Rets: 6/24/09/

Ingves, Stefan and Mohsin Khan. Financial Stability Assessment. Monetary and Financial systems and Middle East and Central Asia Departments. Washington D.C.: International Monetary Fund. November 24, 2004 http://imf.org/external/pubs/ft/scr/2006/cr06199.pdf rets: 6/23/09

Turkey Natural Gas Plant Liquids Production and Consumption by Year.

http://www.indexmundi.com/energy.aspx?country=tr&product=ngl&graph=production+consumption rets: 6/24/09.

U.S. Library of Congress

http://countrystudies.us/turkey/68.htm rets: 6/24/09

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