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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Croatian Reformed Pension System Crisis and Models of
Sustainable Optimization
Goran Luburid
Business School Zagreb, Zagreb, Croatia
goran.luburic@vpsz.hr

Senka Zavišid
Zagreb University, Zagreb, Croatia
senkaza@gmail.com
Croatia, as well as many western-economy based countries, is expecting longterm negative demographic trends when it comes to young and elderly ratio or
natural increase ratio. Social policy objective in the context of pension system
is supposed to be crucial factor in preserving social stability based on longterm sustainability, not on short-term solutions like abundant debt-funded
pensions directly from national budget. Recent macroeconomic changes in
Croatia, like structural unemployment because of inconsistent demand and
supply on labor market as well as extinction of old and expansion of new
business markets puts Croatian pension system in challenging economic
surroundings. These surroundings identify a new way of approach on
determining future macroeconomic projections and designing a better and
more sustainable fiscal system of which pension system holds substantial part.
The study presents argumented thoughts on previous and recent analyses of
Croatian pension system, mainly from the period after pension reforms in
Croatia that is between 2002 and 2012. Authors of this study identify
fundamental problems and present a new perspective considering the
direction of possible future changes in the pension system, having in mind
recent demographic and public finance trends in Croatian economy. Authors
also present conceptual directions towards optimization of the pension
system, with emphasis on specifically applicable models of optimization
considering pension pillars and other social contributions that are obligatory in
calculating brutto wages. In addition, this study presents interest groups like
pensioners, insured workers, obligatory pension funds and government that
would be affected by proposed models of optimization. Different approaches
in creating motivational factors for pension system optimization had been
analyzed and presented solutions have a built-in trade-off for every analyzed
interest group. Presented models are to be considered for potential
implementation or new reform that would improve pension adequacy rates
without affecting fiscal sustainability of public finance in Croatia.
Keywords: Croatian Pension Insurance, Pension System Reforms, Demographic
Changes, Sustainability, Optimization Level, PAYG.

130

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ZAVIŠIĆ, Senka</text>
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                <text>Croatia, as well as many western-economy based countries, is expecting longterm  negative demographic trends when it comes to young and elderly ratio or  natural increase ratio. Social policy objective in the context of pension system  is supposed to be crucial factor in preserving social stability based on longterm  sustainability, not on short-term solutions like abundant debt-funded  pensions directly from national budget. Recent macroeconomic changes in  Croatia, like structural unemployment because of inconsistent demand and  supply on labor market as well as extinction of old and expansion of new  business markets puts Croatian pension system in challenging economic  surroundings. These surroundings identify a new way of approach on  determining future macroeconomic projections and designing a better and  more sustainable fiscal system of which pension system holds substantial part.  The study presents argumented thoughts on previous and recent analyses of  Croatian pension system, mainly from the period after pension reforms in  Croatia that is between 2002 and 2012. Authors of this study identify  fundamental problems and present a new perspective considering the  direction of possible future changes in the pension system, having in mind  recent demographic and public finance trends in Croatian economy. Authors  also present conceptual directions towards optimization of the pension  system, with emphasis on specifically applicable models of optimization  considering pension pillars and other social contributions that are obligatory in  calculating brutto wages. In addition, this study presents interest groups like  pensioners, insured workers, obligatory pension funds and government that  would be affected by proposed models of optimization. Different approaches  in creating motivational factors for pension system optimization had been  analyzed and presented solutions have a built-in trade-off for every analyzed  interest group. Presented models are to be considered for potential  implementation or new reform that would improve pension adequacy rates  without affecting fiscal sustainability of public finance in Croatia.  Keywords: Croatian Pension Insurance, Pension System Reforms, Demographic  Changes, Sustainability, Optimization Level, PAYG.</text>
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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

English language as an instrument of globalization
Amela Lukač Zoranid
International University in Novi Pazar, Novi Pazar, Serbia
prorektor.nastava@uninp.edu.rs

Fahreta Fijuljanin
International University in Novi Pazar, Novi Pazar, Serbia
fahretaf@hotmail.com

World globalization establishes new standards for foreign language skills as
well as for the teachers of foreign languages. Market globalization
represents one of the main factors that influenced English language to be
international language. In order to have a successful interaction between
foreign companies, market and economy felt a need for the knowledge of
English language. In this way English language became a device, an
instrument of successful management and the most useful second
language. There was also the need to improve knowledge of English
language in every company and business institutions. Increasing the
number of English language speakers, we increase the international
communication in an academic and business level.
Keywords: Globalization,
Communication

English

35

Language,

Market,

Business,

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                    <text>International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

English Language as an Instrument Of Globalization
Amela Lukač Zoranić
International University in Novi Pazar, Novi Pazar, Serbia
prorektor.nastava@uninp.edu.rs
Fahreta Fijuljanin
International University in Novi Pazar, Novi Pazar, Serbia
fahretaf@hotmail.com
Abstract
World globalization establishes new standards for foreign language skills as well as
for the teachers of foreign languages. Market globalization represents one of the main
factors that influenced English language to be international language. In order to have
a successful interaction between foreign companies, market and economy felt a need
for the knowledge of English language. In this way English language became a device,
an instrument of successful management and the most useful second language. There
was also the need to improve knowledge of English language in every company and
business institutions. Increasing the number of English language speakers, we
increase the international communication in academic and business level.
Keywords: Globalization, English Language, Market, Business, Communication

Globalization is a term used to describe the changes occurring in our everyday lives and in
society as well economy and politics resulting from international trade and cultural
exchange. In economics the expression “free trade” was used prior to the term
“globalization” to describe trade liberalization and deregulation on international market.
The same term “globalization” nowadays is used in extended context, i.e. to describe all
aspects of human existence. It is becoming increasingly difficult to ignore that:
Today's definition of the term comprise of factors that have contributed to
globalization including increasingly sophisticated communications (in all levels),
transportation technologies and services, mass migration and the movement of
peoples and languages. It comes to define a level of economic, social and cultural
activities that have outgrown national borders and markets through either industrial
combinations and commercial groupings that cross national frontiers, international
agreements that reduce the cost of doing business in foreign countries, or cultural
influences of certain societies on others. (Wu &amp; Dan, 2006)
Globalization enables interference of populations, cultures, languages within international
borders as a result of the intensifying economic, social and cultural exchanges within
different societies. Access to new technologies, media, internet an other medium of
communication allow individuals global interactions with the belief that they frame
intercultural communication.
There is no doubt that globalization intensifies worldwide social relations and
consciousness of the world as whole and is considered as “fashionable buzzword” which
can be adopted as a “concept referring to people‟s groving consciousness of belonging to a
global community.” (Steger, 2003:11).

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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

According to Giddens “globalization is westernization or more specifically
Americanization since western powers or the United States is now the sole superpower,
with a dominant economic, cultural and military position in the global order [and] many of
the most visible cultural expressions of globalization are American-coca cola, McDonald s
and CNN.” (2000: 33).
Stager attempts to indicate that the term globalization applies to a set of social processes
that appear to “transform our present social condition of weakening nationality into one of
globality”. (2003:10) He explains that globalization is about shifting forms of human
contact. In order to define and clarify the phenomenon of globalization Stager raises some
questions like: How does globalization occur? What is diving globalization? Is it the cause
or a combination of factors? Is globalization a uniform or an uneven process? How does
globalization differ from previous social developments? (2003:11)
Stager believes that globalization is an uneven process, meaning that people living in
various part of the world are affected very differently by this gigantic transformation of
social structures and cultural zones. Nevertheless, when we speak about globalization,
intercultural features the first language that comes to mind is English language.
It is noticeable that English is acknowledged by nearly all people as a result of their need
to interact on an international scale. Anglo-America culture industry made English the
global lingua franca of the 21st century. English is used in the economy, diplomacy, massmedia and education all over the globe in comparison with other languages which
remained visible within national and regional frameworks.
The significance of the rise of the English language has a long history reaching back to the
British colonialism and the attempt to subaltern the rest of the world as well to exploit and
assimilate other cultures imposing English language as medium of communication between
people. In 16th century, at the beginning of colonization only 7 million people used English
as their mother tongue, by the end of the 20th century the number increased to over 350
million. “English was the official vehicle and the magic formula to colonial elite.”(Wa
Thiongo, 2004:12).
In many colonized countries English has not been rejected as a symbol of colonialism, it
has rather been adopted as a politically neutral language. Any achievement in spoken or
written English was rewarded. English became the measure of intelligence and ability in
arts, science, music, literature. English became the main determinant for the progress and
the success in education and business.
Imperialism, led by the USA, presents the struggling peoples of the earth and all
those calling for peace, democracy and socialism with the ultimatum: accept theft
or death […] Biggest weapon wielded and actually daily unlashed imperialism
against the collective defiance is the cultural bomb. The effect of cultural bomb is
to annihilate a people‟s belief in their names, in their languages, in their
environment, in their heritage of the struggle, in their unity, in their capacities and
ultimately in themselves. (Wa Thiongo, 2004:3)
Starting from the fact that “language serves as a symbol of group belonging enabling
different groups of people to know what ethnic group they belong to and what common
heritage they share”. (Kiplangat, 2003) Without language, people would lose their cultural

57

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

identity, still the data pointing that English language is more used in some countries than
native languages is concerning.
“The fact that absorption of the indigenous population by the colonisers has
generally led to the loss of indigenous languages, especially when the colonised are
kept in a subordinate position. The critical factor is their involvement in an
economic system in which they must use the language of the new ruler in order to
compete in the labour force and function adaptively. This is an aspect of
globalisation as homogenisation, requiring that things work more or less the same
way in the colony as in the metropole, especially in the exercise of power and
control of the working class.” (Solikoko, p.29)
With globalization allowing languages and their cultures to spread and dominate on a
global scale, it also leads to the extinction of other languages and cultures. Steger points
out the decrease in number of spoken languages in the world. According to him there were
14,500 spoken languages in the world during 1500, to less then 7,000 in 2000. “Given the
current rate of decline, some linguistics predicts that 50-90% of the currently existing
languages will have disappeared by the end of the 21st century. (2003:84)

According to Anne Johnson along with the spread of the dominant language, the
language's culture is also spread. This can be seen in popular American movies being
shown globally, as well as American media and American food, such as in the
globalization of McDonald's.
Proficiency in English has become a valuable commodity. Increases in global
interactions over the past century have stimulated demand for more streamlined and
efficient communication across lingual borders. Thus, in the business world,
companies seeking to expand multinationally have had to find ways to
communicate across such difference in cost-effective ways. Many firms have
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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

changed their corporate languages to the common tongue of English in efforts to
streamline communication and avoid leaving team members. Responding to this
situation, nearly a billion individuals worldwide are learning the language, most in
hopes that their lingual skills will boost their paycheck or land them a better job.
States, too, understand that an English-speaking workforce can help their
economies integrate and become more competitive on the world market. (Johnson,
2009:132)
Anne argues that English language is seen as an imperialist and homogenizing force
detrimental to the world‟s cultural diversity, and then examine evidence to the contrary,
which indicates that the English language is separating from its culture of origin and
actually facilitating cross-cultural dialogue. (Johnson, 2009:136)
English is not only the language of the Anglo-Saxon nations but is the common language
of many nations worldwide. It has been used in everyday life, in literature in all parts of
human acting. Today, more than 80% content posted on the internet is English, leading
scientific works are published in English. “in 1997, 95% of the articles indexed in the
Science Citation Index‟s Web of Science were written in English, despite the fact that only
half were written by authors in English-speaking countries.” (Johnson, 2009:135) It has
been noted by the researchers that publications written in languages other than English
have a considerably lower impact than English-language works, and command lower
compensation than works published in English.
It is believed that English language and globalization function as a pull factors for one
another. Globalization could not happen in such a degree without development and vest
usage of English language and at the same time globalization strengthen the position of
English as a global language.
It is considered that global community can not function effectively without global
language, therefore, as Crystal emphases: English is the language of globalization or
“global language”. (Crystal, 1997)
Economic and professional incentives have made English an asset, “exportation of
desirable technology often carries along the language and culture of the powerful
manufacturer.” (Solikoko, 2002:33)
Whether it is a result of imperialistic plans of western powers over Europe or it is a natural
consequence of globalization, it is certain that English is increasingly becoming popular in
European media and education. It is been imposed that who has the knowledge of English
doesn‟t need other language in order to communicate with the rest of the world. “A
language achieves a genuinely global status when it develops a special role that is
recognized in every country.” (Crystal, 1997:3)
Is the dominance of English in scientific communication leading to a diglossic
situation in continental European countries, a concomitant marginalisation of
languages that hitherto have been extensively used in higher education and scholarly
writing, with the result that competence in English is becoming a characteristic of
elites, and we are moving towards an undemocratic division of linguistic labour
since the rest of the population will be confined to a language in which much
information is never available? (Philpson, 2000: 198)

59

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

According to Philipson the USA and UK have coordinated efforts to establish English as a
„world‟ language, and create the necessary professional infrastructure for achieving this
since the 1930s. Crystal believes that British political imperialism had sent English around
the globe, during nineteenth century.
A language has traditionally become and international language for one chief
reason: the power of its people – especially their political and military power.
During the twentieth century […] economics replaced politics as the chief driving
force, and the language behind the US dollar was English. (1997:9-10)
In conclusion it is obvious that English language is a salient example of globalization. As
stated by Schichao Li in her article, "Globalization of Languages," the English language
can be considered a global language because "except English, no other language dominates
international business, academia, media, the Internet, and international air/sea
traffic."(2002)
English language became a device, an instrument of successful management and the most
useful second language. On a daily basis, there is a constant need to improve knowledge of
English language in every company or business institution, therefore the rising number of
English speakers increases the international communication in academic and business
level.
References
Cheruiyot, Kiplangat. (2003), "Our Languages are Dying",
http://www.globalpolicy.org/globaliz/cultural/2003/0224language.htm
Crystal, David, (1997), English as a global language, Cambridge University Press, New
York
Giddens, Anthony, (2000), Runaway World: How Globalization Reshaping Our Lives,
Routledge, New York
Johnson, Anne (2009) "The Rise of English: The Language of Globalization in China and
the European Union," Macalester International: Vol. 22, Article 12.
http://digitalcommons.macalester.edu/macintl/vol22/iss1/12
Phillipson, Robert, (2000), “European language policy: An unmet sociolinguistic
challenge”, Sociolinguistica, No. 14, 2000, p. 197-204.
Salikoko S. Mufwene, (2002), “ Colonization, Globalization, and the Future of Languages
in the Twenty-first Century”,International Journal on Multicultural Societies, Vol.
4, No. 2, UNESCO
Shichao, Li, (2002), "Globalization of Languages",
http://www.globalhawaii.org/PDF/language.pdf
Steger, B., Manfred, (2003), Globalization: A very short introduction, Oxford University
Press, New York
Wa Thiango, Ngugi, (2004), Decolonizing the mind: the politics of language in African
literature, Sunlitho ltd., Kenya
Wu, Li, Dan, Ben-Canaan,(2006),The Impact of Globalization and the Internet on
English Language Teaching and Learning, Heilongjiang University, School of Western
Studies, Harbin
http://www.academia.edu/188911/The_Impact_of_Globalization_and_the_Internet
_on_English_Language_Teaching_and_Learning

60

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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Predictability of Financial Crisis in Developing
Countries: Turkey, Argentina and Thailand
M. Ali Avcı
Pamukkale University, Denizli, Turkey
aliavci20@hotmail.com
N. Oğuzhan Altay
Ege University, İzmir, Turkey
oguzhan.altay@ege.edu.tr
Harun Sulak
Süleyman Demirel University, Isparta, Turkey
harunsulak@sdu.edu.tr
Since 1980’s, financial liberalization policies that implemented without
adequate infrastructure in order to decrease inflation and interest rates
also construct a sustainable growth process led to many financial crisis
which have significant effects throughout the world. Therefore many
models have developed to explain these crises. Main purpose of these
models is to increase the predictability of financial crisis by identifying the
factors that affecting the formation of crisis. Determining factors affecting
the formation of financial crisis and trying to predict the crisis is very
important in preventing crisis. In this context the aim of this study is
analysis the predictability of financial crisis that occurred in developing
countries which are Turkey, Argentina and Thailand 1990-2010 periods, by
using Markov Regime Chance Model. In generated models, indices of
financial pressure were calculated as dependent variable and fifteen
different indicators were chosen from the literature to describe these
indices. Successful indicators in predicting financial crises are: for Turkey;
trend deviation of real exchange rate, domestic credits/industrial
production, inflation and M2/reserves, for Argentina; stock price,
difference in real interest rate, inflation and M2/reserves and for Thailand;
trade balance, terms of trade, M2/reserves and oil prices. As a result of
this study, financial crises such as 1994 and 2001 crises in Turkey, 1994,
2002 and 2009 crises in Argentina and 1997 and 2009 crises in Thailand
were successfully predicted.
Keywords: Financial Crisis, Financial pressure, Markov Regime Chance
Model, Predictability.

191

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N. OGUZHAN, Altay
SULAK, Harun</text>
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                <text>Since 1980’s, financial liberalization policies that implemented without  adequate infrastructure in order to decrease inflation and interest rates  also construct a sustainable growth process led to many financial crisis  which have significant effects throughout the world. Therefore many  models have developed to explain these crises. Main purpose of these  models is to increase the predictability of financial crisis by identifying the  factors that affecting the formation of crisis. Determining factors affecting  the formation of financial crisis and trying to predict the crisis is very  important in preventing crisis. In this context the aim of this study is  analysis the predictability of financial crisis that occurred in developing  countries which are Turkey, Argentina and Thailand 1990-2010 periods, by  using Markov Regime Chance Model. In generated models, indices of  financial pressure were calculated as dependent variable and fifteen  different indicators were chosen from the literature to describe these  indices. Successful indicators in predicting financial crises are: for Turkey;  trend deviation of real exchange rate, domestic credits/industrial  production, inflation and M2/reserves, for Argentina; stock price,  difference in real interest rate, inflation and M2/reserves and for Thailand;  trade balance, terms of trade, M2/reserves and oil prices. As a result of  this study, financial crises such as 1994 and 2001 crises in Turkey, 1994,  2002 and 2009 crises in Argentina and 1997 and 2009 crises in Thailand  were successfully predicted.  Keywords: Financial Crisis, Financial pressure, Markov Regime Chance  Model, Predictability.</text>
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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Effect of Extracurricular Activities on Sustainable
Improvement Process of Higher Education through
Example of Business Clubs
Magrdžija Haris
International Burch University, Bosnia and Herzegovina
haris.magrdzija@gmail.com
Elif Öztürk
International Burch University, Sarajevo, Bosnia and Herzegovina
eozturk@ibu.edu.ba
This study includes the overview of the effect of extracurricular activities
on sustainable improvement process of higher education through example
of business clubs. The main purpose of this study is to contribute the
literature with the information about influences of these kinds of activities
on quality of higher education. Also, this study presents factors that have
effect on sustainable improvement process of higher education institutions
related to clubs activities. Through realization of projects and activities
such as organization of seminars, workshops, conferences etc., students'
clubs contribute to improvement of quality in higher education. The survey
technique is used to gather information that is collected by the universities
operating in BIH and Turkey. Additionally, factor analysis is explored to
analyze the results in this study. Findings of this study state that there are
positive effects of business clubs on sustainable improvement process of
universities in terms of quality, innovations and cooperation between the
universities and business world. Also, results of this study reflect
importance of support to student activism in order to make them more
significant as subjects in the education process and improve its quality.
This study can be a source of motivation for other similar researches.
Keywords: Sustainable Improvement,
Innovations, Corporations.

193

Higher

Education,

Quality,

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ÖZTÜRK, Elif</text>
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                <text>This study includes the overview of the effect of extracurricular activities  on sustainable improvement process of higher education through example  of business clubs. The main purpose of this study is to contribute the  literature with the information about influences of these kinds of activities  on quality of higher education. Also, this study presents factors that have  effect on sustainable improvement process of higher education institutions  related to clubs activities. Through realization of projects and activities  such as organization of seminars, workshops, conferences etc., students'  clubs contribute to improvement of quality in higher education. The survey  technique is used to gather information that is collected by the universities  operating in BIH and Turkey. Additionally, factor analysis is explored to  analyze the results in this study. Findings of this study state that there are  positive effects of business clubs on sustainable improvement process of  universities in terms of quality, innovations and cooperation between the  universities and business world. Also, results of this study reflect  importance of support to student activism in order to make them more  significant as subjects in the education process and improve its quality.  This study can be a source of motivation for other similar researches.  Keywords: Sustainable Improvement, Higher Education, Quality,  Innovations, Corporations.</text>
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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Does Turkey’s Stance on Iran’s Nuclear Development
Program Reflect an Axis-shift in Turkish Foreign Policy?
Nguyen Mai Lan Thanh
Fatih University, İstanbul, Turkey
lan.thanh@fatih.edu.tr
The world is being nourished with tremendous development in technology,
which causes the greatest destruction of civilization from the intrinsic
civilization itself. It is believed that nuclear weapons states hold a handful
of nuclear arsenals, strong enough to eradicate completely life on earth.
With the experience of the devastating atomic bombs marking the end of
the Second World War, it is not difficult to say that the whole world is
shaking when there is any state attempting to develop nuclear armaments.
In the case of Iran recently, different approaches and resolutions have
been discussed. Consequently, several of them have been implemented, in
order to prevent the Islamic Republic from pursuing nuclear arsenal,
despite Tehran’s discourses on her intention to have her own nuclear
program for peaceful and civilian purposes. Turkey, as an active regional
player, reflects her position on the issue via the state’s foreign policy. That
Turkey has been hesitating at complying with the West’s sanctions on Iran
poses not only questions but also confusion among the international
community. “Does Turkey’s stance on Iran’s nuclear development program
reflect an axis-shift in Turkish Foreign Policy?”
This paper seeks to answer that question, by analyzing the context that
endorses the Iranian nuclear program in pursuance of nuclear technology,
and by focusing on the discourses offered by the Iranian and Turkish
representatives to the international community concerning the ambiguities
of the Iranian nuclear development program.
In contrast to much in the literature which perceived Turkey as a
moderator, this paper argues that Turkey is more like a facilitator, besides
proposing mediation grounds like the previous Baghdad and Moscow
sponsored mediations between the US/EU and Iran. From this perspective,
Turkey’s stance seems clear in supporting the idea that instead of imposing
sanctions, the West must think of other effective ways to resolve the
nuclear energy. In other words, Ankara believes that diplomatic talks and
negotiations shall be continued and attributed to Iranian nuclear debacle.
Overall, this paper concludes that Turkey’s decision of no sanctions on Iran
does not indicate that Turkish foreign policy is anti-Western. Rather, it
227

�International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

illustrates Turkey’s growing independence as a regional power and
flexibility in decision-making process with regard to her own interests, such
as gaining image in the Middle East with the new foreign policy doctrine,
less independence on Russian energy imports by Iran’s alternative, and
prioritizing domestic solutions, while not upsetting the West’s mutual
interests.
In addition, this study will contribute to the existing literature on the part
of the explanation of Iranian diplomacy with regard to the religious
understanding of “taqiyya” (deception) and “qitman” (concealing).
Keywords: Nuclear Program, Iran, Middle East, NPT, Turkish Foreign Policy,
Western Orientation, Axis-Shift.

228

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                    <text>International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

Does Turkey’s Stance on Iran’s Nuclear Program Reflect an Axis-Shift in
Turkish Foreign Policy?
Mai Lan Thanh Nguyen
Fatih University, Istanbul, Turkey
lan.thanh@fatih.edu.tr

Abstract
Iran‟s nuclear development program has been one of the hot topics in the agenda of
a vast number of states‟ foreign policies. The Islamic Republic has declared her
intention toward this nuclear plant as for peaceful purposes in compliance with the
international treaty. However, the state‟s sovereignty seems to be degraded when
the West has disregarded Iran‟s discourses. Turkey with her history of being an ally
with the West, especially the U.S, and constant attempt to be a member of Western
organizations, NATO during the Cold War, and the EU since its establishment, has
demonstrated the country‟s friends and foes. However, her reluctance to comply
with Western sanctions on Iran recently poses a question among the international
community whether Turkish Foreign Policy towards nuclear-aspiring Iran changes
its Western orientation. This paper endeavors to explain Turkish interests in shaping
Turkey‟s position regarding Iranian nuclear program. It is believed that Turkey has
attempted to play neutrally her role in mediating the dispute between the West and
Iran, with Turkish Foreign Policy served both sides as long as it would not hamper
Turkish national interests and priority concerns. In contrast to much in the literature
which perceived Turkey as a moderator, this paper argues that Turkey is more like a
facilitator, besides proposing mediation grounds like the previous Baghdad and
Moscow sponsored mediations between the US, EU and Iran. Overall, Turkey‟s
decision of no sanctions on Iran does not indicate that Turkish foreign policy is
anti-Western. Rather, it illustrates Turkey‟s growing independence as a regional
power and flexibility in decision-making process with regard to her own interests,
such as gaining image in the Middle East with the new foreign policy doctrine, less
independence on Russian energy imports by Iran‟s alternative, and prioritizing
domestic solutions, while not upsetting the West‟s mutual interests. The paper also
focuses on the discourses offered by the Iranian and Turkish representatives to the
international community concerning the ambiguities of the Iranian nuclear
development program. In addition, this study will also contribute to the literature
addendum on the part of the explanation of Iranian diplomacy with regard to the
religious understanding of “taqiyya” (deception) and “qitman” (concealing).
Keywords: Nuclear program, Iran, Middle East, NPT, Turkish foreign policy, axisshift, Iranian diplomacy, sanctions, taqiyya, qitman.

Introduction
The world is being nourished with tremendous development in technology, which causes
the greatest destruction of civilization from the intrinsic civilization itself. It is believed
that nuclear weapon states hold a handful of nuclear arsenals, strong enough to eradicate
completely life on earth. With the experience of the devastating atomic bombs marking the
end of the Second World War, it is not difficult to say that the whole world is shaking
when there is any state attempting to develop nuclear armaments.
1

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

In the case of Iran recently, different approaches and resolutions have been discussed.
Consequently, several of them have been implemented, in order to prevent the Islamic
Republic from pursuing nuclear arsenal, despite Tehran‟s discourses on her intention to
have her own nuclear program for peaceful and civilian purposes. Turkey, as an active
regional player, reflects her position on the issue via the state‟s foreign policy. That Turkey
has been hesitating at complying with the West‟s sanctions on Iran poses not only
questions but also confusion among the international community. “Does Turkey‟s stance
on Iran‟s nuclear development program reflect an axis-shift in Turkish Foreign Policy?”
This paper seeks to answer that question, by analyzing the context that endorses the Iranian
nuclear program in pursuance of nuclear technology, and by focusing on the discourses
offered by the Iranian and Turkish representatives to the international community
concerning the ambiguities of the Iranian nuclear development program. In contrast to
much in the literature, which perceived Turkey as a moderator, this paper argues that
Turkey is more like a facilitator.
The structure of the paper is as follows. Part two analyzes Iran‟s problem and Iranian
diplomacy. Part three introduces Turkey‟s position. Then, part four evaluates if the policy
is diverting from Western-oriented tradition in Turkey. Consequently, part five explains
such stance. Finally, part six concludes the paper.
Iran’s problem and Understanding Iranian diplomacy
Iran‟s recent history especially during the 19th and 20th centuries is one of foreign
domination. Today, apparently, it is the U.S that the Islamic Republic finds itself
constantly confronted with. Militarily speaking, Iran‟s capability is considered an inferior
to other regional opponents, namely, Israel and perhaps, Turkey. What the world is
observing now, as a result, is an Iran that longs for exercising leadership of the Muslim
world (Villelabeitia, 2012), a membership to the exclusive “nuclear club”, and balancing
Israel‟s nuclear weapons. (Waltz, 2012)
In fact, nuclear development program is not something new in Iran. Since the 1957 there
have been several attempts. Prominently in the 1979 Revolution with the U.S support, the
state has already obtained the skills via “Atoms for Peace” program under the instruction
and provision by the U.S. What an attracted attention of the international community,
Turkey included, is that the IAEA since 2005, kept reporting its inability to access to
Iranian nuclear plants in full scale.1 The West has, interestingly, immediately responded
with deterrence and sanctions, etc. despite Iranian discourses on her so-claimed genuine
intention.
Since Iran is an Islamic Republic, a religious perspective might certainly help understand
Iranian diplomacy. After the revolution, the regime‟s leader, Grand Ayatollah Khomeini,
announced a fatwa forbidding nuclear weapon development program in his country. Some
scholars employed this fatwa as a means to judge Iran‟s nuclear plant today that it is not
peaceful as the government declared. Iranian diplomacy, nowadays, along with this
fatwa,exposed to the world the two concepts of religious understanding of “taqiyya” and
“qitman”.2
Taqiyya, meaning deception or disinformation, is a term generally used by Shiite Muslims,
who believe that they may lie and pretend to hide their religious identity under perceiving
1

For the latest news on key findings by the ISIS analysis of IAEA report regarding Iranian nuclear potentials,
please see the appendix.
2
The terms were first mentioned in Todayszaman newspaper by Dr. Bulent Kenes, a scholarly figure
regarding Iranian politics and issues.

2

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

threats. As an integral part of Muslim military strategy, taqiyya is also employed to trick or
deceive enemies.3 Another synonymous term is “qitman” meaning concealing. It refers to a
cautious reservation and dissimulation of genuine intentions. As such, the two terms have
been used as means of defense and concealment by Shiites against unbelievers. Iranian
diplomacy, thus, can be understood with the skillful use of the two terms.4
Needless to say, however, without foreign assistance, nuclearization of Iran seems vague
due to her poor industrial and technological base. Believing so, the Obama administration
insists on imposing economic sanctions on the country. One of the explanations for such a
reaction is that the U.S is not ready for Iranian nuclear weapon existence. (Parasiliti, 2009)
Iran is perceived as playing the Israel game. Although Iran is aspiring to have a nuclear
ambiguous status like Israel, she will stay in the NPT for legitimate cover. History has
proved that no one can stop nor attack once one goes nuclear, considering the cases of
Israel, North Korea, Pakistan, and India. Iran is different from Iraq. Israel conducted
surgical strikes in the mid-1980s and took out the Iraqi nuclear facility. Iran has over 20
and all are on different locations. A surgical operation is more or less impossible. Iran is
aspiring to acquire nuclear technology and continues to play the game excellently. She has
her own mediation as well as delaying strategy. Moreover, Iran did receive civilian nuclear
technology and materials in the Atoms for Peace program by the U.S so they knew what to
do. Since there is not a lot of difference between civilian and military technology- only
weaponization procedures- Iran knew the roadmap, which in turn makes it harder for other
actors to response.
On August 30, 2012, UN Secretary General Ban Ki-moon contended Iran‟s right to nuclear
development program. He proclaimed and showed expectations toward fruitful talks
between the Islamic Republic and the P5+1. In addition, the 120 Non-Aligned Movement
states also openly supported Iran‟s right to development nuclear power for civilian
purposes after their meeting together in Tehran. In response, the Foreign Minister of Iran,
Ali Akbar Salehi asserted a strong statement about the intention of the Islamic Republic.
“I would like to re-emphasize that we do not see any glory, pride or power in the nuclear
weapons, quite the opposite based on the religious decree issued by our supreme leader, the
production, possession, use or threat of use of nuclear weapons, are illegitimate, futile,
harmful, dangerous and prohibited as a great sin.” (PressTV, 2012)

Moreover, Ebrahim Nekou, an Iranian lawmaker said that the Islamic Republic favors
resolving its nuclear standoff through negotiations, “The Islamic Republic of Iran still
insists on resolving the [nuclear energy] issue through diplomatic ways and is ready for
negotiations.” However, instead of recognizing Iran's right, the United States and other
Western countries are imposing pressure and sanctions, such policies have controversially
debated to lead to ineffective diplomatic progress between Iran and the P5+1. Iran's

3

The definition of the concept can be founf in Esposito, J. (2003). The Oxford Dictionary of Islam. Oxford
University Press.
4
It is believed that Mahmoud Abbas in his interview with the EU on Palestine issue, Arafat and Oslo dispute,
and some other Middle Eastern leaders have at least once employed such means. Since this paper only
introduces the terms to the literature, there is no deliberate analysis, because its main focus is Turkish foreign
policy. One can find the art and legitimacy of the use of taqiyya and qitman during the prophethood as well
as in one of the hadiths: “he who keeps secrets shall soon attain his objectives.”

3

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

nuclear pursuit, as a result, has become the state‟s securitized issue with regard to the
challenges and threats to the national identity.
Turkey’s position
Turkey is believed to have played a neutral role in this Iran‟s nuclear energy issue.
Although Turkey complies with U.N. decisions, Taner Yildiz, Energy and Natural
Resources Minister of Turkey, said, Turkey did not abide by unilateral sanctions imposed
by other countries. (Farznews, 2012) Until 28th April 2013, according to CNS news,
Turkey is still preserving her trade relations with Iran. The volume of gasoline as well as
other petroleum products sold to Iran keeps sustaining and increasing despite U.S
sanctions. (CNS News, 2013)
Turkey, on the other hand, being preoccupied with domestic concerns, has not really
regarded Iranian nuclear program as an immediate threat in comparison with other priority
concerns. Besides, Turkey is already covered by the US and the NATO allies; therefore,
nontraditional security for Turkey is not a posed challenge. (Kibaroglu, 2011) Turkey has
other priorities, such as the issue of internal security and does not want a nuclear arms race.
(Ustun 2010, 19) There are a lot of separatist movements by the Kurds; and the issue of
Kurdistan in Northern Iraq is also aggravating this. Therefore, Turkey will neither initiate
any steps nor will she support further sanctions on Iran. Since Turkey is a legitimate and
internationally well-balanced actor, she would firmly express her position and Turkish
Foreign Policy on Iran neutrally in the region while she is preoccupied with domestic
security policy. Since, it would be illogical to think that Turkey would step into an
unsecured and dangerous zone while she has already been trying to avoid one at home.
“No one has the right to use force against a country whose nuclear capabilities are used for
peaceful purposes,” said Prime Minister of Turkey, Recep Tayyip Erdogan after his talk with
Iranian Vice President Mohammad-Reza Rahimi. “Anyone who has common sense opposes
the use of nuclear power as a weapon, but at the same time, nuclear activity for peaceful
purposes should not be opposed.” (The Times of Israel, 2012)

This statement of the Prime Minister has clearly defined Turkey‟s position in the
international community regarding nuclear energy program in Iran. That is, Turkey
officially recognizes the right of Iran to pursue nuclear energy program. However, those
nuclear plants should be accessible for the IAEA. In this way, the international community,
and so to say, Turkey and the West would be able to increase their confidence in this
peaceful development plan.
The U.S and the EU have come up with several solutions regarding Iranian nuclear
development program. Even though threats of use of force were also employed, things do
not show positive results. Consequently, several sanctions have been imposed on Iran‟s
economy, especially on the country‟s oil and financial sectors, believing that the outcome
would affect the Central Bank of Iran to carry on any business. From financial sectors
angle, as a result of sanctions, the U.S and the EU together expected a drop in foreign
investors and customers of Iranian crude oil. However, it seems that all those efforts
created a counter-effect. That is, Tehran is feeling threatened and weak confronting the
superpowers; therefore, together with her own citizens suffering now from the economic
sanctions, Iran developed even a stronger will to have her own means of protection. A
nuclear weapon Iran is a very likely outcome if the West has no better alternative solutions,
as several critics discussed.

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Turkey, as a consequence, reserved her foreign policy‟s view at this point. Turkey as a
regional moderator is only to propose mediation grounds like the previous Baghdad and
Moscow sponsored mediations between the US/EU and Iran, which makes Turkey “feel”
more into the game. From this perspective, Turkey‟s stance seems clear in supporting the
idea that instead of imposing sanctions, the US and the West must think of other
effectiveways to resolve the nuclear development issue in Iran. In other words, Ankara
believes that diplomatic talks and negotiations shall be continued and attributed to Iranian
nuclear debacle. It is increasingly observed that soft power has been the main logic and
nature of Turkish foreign policy under the current AKP government since 2002. Turkey
has conducted diplomatic talks especially in the melting pot of the conflicting Middle
Eastern zone. The first apparent attempt of Turkey as being a mediator in the region has
been seen through the tri-partite Joint Declaration by Iran, Brazil and Turkey in 2010.5
Giving such a decision, Turkey believed that economic cooperation and diplomatic talks
would bring positive outcome to the solution of Iran‟s nuclear issue.
Turkey does not want a nuclear-armed Iran, neither but does she would like to close the
access to nuclear energy technology in her country. (Kibaroglu, 2009)Lesser (2004) argued
that Turkey could act more radically to prepare for a nuclear Iran as well as consider her
potential to go nuclear. He further explained in his paper if Turkey can live with a nuclear
Iran.
“Could the emergence of a nuclear Iran be accommodated comfortably in the Turkish
security scene? Or would it spell a fundamental and negative transformation of the strategic
environment? The answer to this question should inform the Turkish calculus as the
international community grapples with the challenge of a near-nuclear Iran.” (Lesser, 2009)

If Iran fails to pursue her nuclear energy development due to the opposition of the West,
then other states would certainly be concerned on their future likeliness of self-enrichment
and reprocessing nuclear technology and peaceful uses of nuclear energy. Ankara,
consequently, is precautious that the rights given to non-nuclear NPT states will no longer
be guaranteed.6 Hence, a proper strategy and foreign policy should be devised carefully. A
deliberate strategy to deal with Iran’s nuclear ambition will have to address both the supply
and demand sides of the nuclear equation, (Bahgat, 2006) Pressuring foreign governments
and companies to stop cooperation with Tehran is not enough. Iran’s security concerns
need to be addressed since it would definitely affect the balance of power in the region.
Improving the security environment in the Persian Gulf and the broad Middle East would
substantially reduce Tehran’s incentives to pursue nuclear capability. As Kemp (2003)
asserted, there is a need for “multilateral and multi-tiered efforts that would involve carrots
as well as threatened sticks.”
Turkish decision of no sanctions: An act of anti-Western orientation?
Turkey since the birth of the republic has been perceived, especially by the Middle Eastern
states, as a puppet of the West, that she only listens and acts according to the West‟s will.
Moreover, Turkish secularism has been one of the factors that disintegrate Turkey from the
region, in which majority of population are Muslims. After the refusal to the U.S to employ
5

See Tehran Declaration, www.fas.org/nuke/guide/iran/joint-decl.pdf
Further discussion about the agreement see Fitzpatrick, M. (2011). Containing the Iranian nuclear crisis: The
useful precedent of a fuel swap.Perceptions, 6 (2), 27-42.
6
Official from the Turkish Ministry of Foreign Affairs (name withheld due to conference format and
Chatham house rules), Ankara Workshop on Nuclear Proliferation, Ankara, Turkey, June 2011.

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her territory during Iraq invasion in 2003, however, now, Turkey again denies
implementing her traditional Western allies on imposing sanctions on Iran; this confused
both the East and West. Whether this act of Turkey an anti-Western orientation or not is an
intriguing question to investigate.
Shortly, there is not enough evidence to confirm that Turkish Foreign Policy towards
nuclear-aspiring Iran has changed its Western orientation. On the contrary, Turkey and the
internal priorities as well as a neutral status serve both the West and Iran. This is
internationally observed through her compliance to the NPT obligations by Iran and no use
of force by the West. In his paper, Sinan Ulgen defenses Turkish foreign policy regarding
Iran with the notion of the new activist approach requiring more thorough analysis to
understand, not simply a change or shift in axis as recently Turkey has been “accused of.”
(Ulgen, 2010) Similarly, Gurzel argues that since 2002, under the AKP government,
Turkish foreign policy has rotating her role toward Iran‟s nuclear development program.
Turkey is believed to have been an observer only, then recently a facilitator and a
mediator. That is to say, Turkey‟s own national interests concerning future possibility of
nuclear development plant have shaped its stance. (Gurzel, 2012)
Similarly, Kanat (2010) argued that changes in Turkish foreign policy are not aimedto deWesternize Turkey; instead they are attempts to create an autonomous, self-regulating, and
self-confident foreign policy agenda while normalizing the previous crisis-driven
policymaking in Turkey’s foreign relations. As a result, Turkey will not take blindly the
sanctions of the West, more specifically, the U.S. Surprisingly, the U.S would not be upset
about this. Apparently, Washington has two allies in the region, Israel and Turkey.
However, Israel is neither a mediator nor a trustworthy partner or friend with any state in
the Middle East. Without Turkey, the U.S could not dominate its rule in the Middle East.
Especially after the Arab spring and the global economic crisis, the power of the U.S did
not only decline inside but outside the country as well, apart from the Middle East, where
Turkey is doing the mediation role. Moreover, the tension between Turkey and Israel has
left an important imprint on the relationship between Turkey and Iran. (Bacik, 2012)
Certainly, Turkey is playing this role not for the favor of the U.S but indirectly for the
regional and international politics. Hence, Turkish foreign policy has not diverted its
direction from the West while still exposing good relation with the Islamic Republic.
Ankara continuous economic relations with Tehran have proved to be effective regarding
Turkey‟s interests. For Ankara, changing Turkey‟s pro-Western orientations is not of main
focus. Instead, ability and capability to act on its own are main concerns of the state.
According to the Prime Minister, “Turkey cannot designate its foreign policy in line with
someone else‟s directives but on its own”.7

How to explain Turkey’s stance?
It is important to understand Turkey‟s stance towards Iranian nuclear program because
indeed, Turkey‟s relations with Iran are important not only for domestic but also for
regional and international politics of Turkey. (Aras, 2001) As a matter of fact, it is believed
7

World Bulletin. (2009, December 23). Turkey‟s PM in Syria defends “independent” foreign policy.
http://www.worldbulletin.net/index.php?aType=haberArchive&amp;ArticleID=51712.

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that Turkish foreign policy towards Iran with increasing attentions from the international
audiences today is a result of Turkey‟s soft power which has been exposed intensively
especially under the AKP government.
Turkey is, by nature, geopolitically important. Turkish Foreign Policy reflects the nation‟s
interests in both the East and the West. Regarding the Iranian nuclear issue, Turkey serves
both the West and Iran. Ankara does not risk any foreign policy decisions to dampen her
relations with both the Western countries and Iran. (Kibaroglu and Caglar, 2008) Apart
from Turkey‟s long history of being alliance with the U.S, Turkey, as a candidate of the
EU, is expected to pursue a policy in line with that of the EU‟s Iran policy, apart from
sanctions. (Alcaro, 2012)
First of all, from economic perspective, the EU is Turkey's largest trading partner and
Turkey is at top seven among importers of EU products and top five in exporting states.8
Meanwhile, Turkey's main exporting markets are the EU, Iraq, Russia, USA, United Arab
Emirates and Iran.9 On the other hand, Turkey imports also largely from the EU, Russia,
China, USA, Iran and South Korea.10 Turkish Foreign Policies, hence, on Iran is not only
determined by Iran‟s aspiration to possess nuclear energy but also on that Iranian and
Turkish diplomatic relations have improved significantly as a result of rising economic
relationship and security cooperation (Ulgen, 2012).
Secondly, Turkey is known as being a large energy importer. One of the motives for
Turkey to continue importing energy from Iran despite the sanctions placed by the Western
countries is believed to be Turkish effort in reducing dependence on Russian energy
import. The figure below shows that Turkish crude oil import from Iran has increased
dramatically and exceeded that from Russia. In 2009, Turkey had to rely her oil
consumption demand on Russia for 40% and on Iran for 26%. The figures reversely
changed in 2011 with Russian oil imported as 12% and that of Iran as 51%. This means
that Iran is increasingly an alternative main oil supplier for Turkish growing market.
Table 1. Crude Oil Imports – 2009/2011

Source: Babali, T. (2012). The role of energy in Turkey‟s Relations with Russia and Iran.The Economic
Policy Research Foundation of Turkey, March 29.

Turkey wants to be a regional power?
Another argument to explain Turkey‟s position regarding Iran is Turkish‟s “zero problems
with neighbors” foreign policy and “strategic depth” doctrine by Foreign Minister Ahmet
8

European Commission Statistics
Ibid.
10
Ibid.
9

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Davutoglu. Turkey, to some extent, fits the definition of regional power. With the objective
of “strategic depth”, Turkey considers herself and is considered as an important player in
several regions due to her geopolitics, namely, the Middle East, the Balkans, the Caucasus,
and the Mediterranean.
To begin, Turkey has strong partners in the Middle East, and close friends in the West,
among others, the United States. In this regard, Israel and Iran might be considered as
regional powers; nevertheless, neither of the two possesses such status as Turkey. More
broadly speaking, none of the Arab countries has the same position and plays the same
rules that Turkey is playing. Turkey is seen as a bridge between the East and the West and
she is well aware of this fact.
Turkish policy till 2002 was perceived as passive one towards the Arab world in regard
that the regime in Turkey was heavily Western oriented, and distant itself from the Arab or
Islamic world as part of the legacy of Ataturk. Turkey was completely directed by her
government towards the West and Israel was the only friend in the Arab world back then.
The fact that AKP came into power in 2002 made a remarkable turning point for Turkey
with especially its prominent foreign policy “zero problem with neighbor countries.”
Practically, the new government enhanced Turkish position in the Middle East. As a
consequence, economic cooperation and trade relations have been established and the ties
among Turkey with the Arab countries have never been that strong before. Some critics
may undermine that the policy might not help achieve zero problems, however, it helps
Turkey improve her economic cooperation and political rule, neither did Turkey lose her
legitimacy of being the combination of East and West, as well as the mediator of them as a
bridge between cultures.
In this respect, energy, among others, is one of Turkey‟s strategic cards to play a role of a
regional power. The securitization of energy has been reflected mostly in Turkish foreign
policy. That is, it attempts to reduce Turkey‟s heavy dependence on imported energy
resources. To illustrate, Iran is among those suppliers that Turkey conceived in her
diversification strategy for alternative energy resources. As a result, Turkey‟s energy
strategy is aimed at both domestic demand and contributing to energy security issue in
Europe. Turkey, in this sense, is ambitious to become a pivotal energy bridge between not
only East and West, but also between North and South.
Is Iran a competitor?
Regarding developments in the Middle East in the aftermath of the Arab Spring, Turkey,
Iran, and Saudi Arabia are aspired to assume the power vacuum as being a regional leader.
(Guzansky et al., 2012) As a result of the Arab uprising, each state seems to be more
cautious in formulating and implementing foreign polices to maintain the peace at home as
well as not to lose credit in the region among other strong players. A vast amount of
literature has been discussing the quest of Iran for nuclear technology and infrastructure. If
Hashemi Rafsanjani and Muhammad Khatami once wished to use nuclear weapons as a
means of deterrence, the present president Mahmoud Ahmadinejad and the Revolutionary
Guards consider them as a critical tool to proclaim Iran's regional power.
Regional ambitions of Iran are not something new. Historically, Iran was an empire until
the 19th century. If one refers to the legacy of Ottoman Empire to address Turkey in her
ambition for the leading chair, it is the Persian Empire nostalgia that can be said for

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today‟s Iran to reemerge. The direct and indirect interference of the Great Powers in
Iranian affairs in the 19th and 20th centuries were also main escalators for Iran to become a
regional power. (Ayman, 2012)
From Turkish side, it is believed that Turkey has been constantly mirroring Western values
to the region on the ground that she is a secular state. This fact somehow upset the
Muslims in the Middle East. Yet, at the same time, it may also be understood that the
attempt of Turkey to democratize the country simultaneously reflect Islamic civilization
could not be found elsewhere. The United States, especially, has denoted Turkey as the
role model for the Middle Eastern countries. Moreover, Turkish Foreign Minister
Davutoglu kept emphasizing a “just” and “inclusive” global order. In his view, “Turkish
state as the successor state of the Ottoman Empire that has responsibilities toward
neighboring regions should be among the countries that will lay the foundations of this
order.”11
However, neither Turkey nor Iran could be successful in assuming the regional leader‟s
position yet.
“So far neither Turkey nor Iran seems to be able to acquire a preponderance of power in the
Middle East that succeeded in building institutions to regulate regional affairs. It does not
seem that anything like that could also happen in the near future because of major powers
opposed interests, the mutual balancing acts of Turkey and Iran and the complicated but not
harmonious interests of regional states that motivate them to align with external powers as
well as with Turkey and Iran. But their stakes are in great danger and both states’ actions
have the power to change the course of developments whereas the risks of becoming enemies
would risk their existential interests.” (Ayman, 2012)

Nuclear or military capability used to be regarded as a means to measure power. Recently,
nevertheless, the world seems to be more content with a peaceful use of soft power. In this
regard, Turkey has been one of the states that have arisen as such. (Ulgen, 2011) This may
lead to a Europeanization of Turkish Foreign policy, as the EU has long been notorious for
soft power employment in solving disputes and conflicts.
More specifically, when one looks at the foreign policy domain, one observes that the AKP
government has given Davutoglu the steering wheel to handle Turkish foreign policy.
(Sozen, 2010) Except for a few incidents, such as Hamas leader Khalad Mashal‟s visit to
Turkey (Zaman, 2006) the prime minister‟s denunciation of Israel‟s policies towards
Palestinians (Today‟s zaman, 2010), and the invitation of the Sudanese prime minister to
Turkey (Turkish Daily news, 2010), Davutoglu‟s policies have not significantly irritated
the Turkish foreign policy establishment. Although the foreign minister has been criticized
by some for driving Turkey away from George W. Bush‟s actions, the EU‟s not-sofriendly policies towards Turkey in a way justified his attempt to bring Turkey closer to
countries in the region.

Conclusion

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Today’s Zaman. (2009, May 4). New FM Davutoglu to Build Order-Instituting Role for Turkey.

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It is believed that hard power means waging war or attacking Iran coercively is very costly
affair while the world is now under an economic fragile zone. By contrast, soft power as
economic sanctions and diplomacy has been employed so far to counteract to Iranian
nuclear program. It is realized that economic sanctions applied by the U.S and the
European Union have indirectly led to Iran‟s recent crisis. However, this method only
suffered the civilians inside the country, but did not discourage Iran‟s ambition to go
nuclear. Diplomatic negotiations, hence, are more desired. Turkey is, therefore, in favor of
this way of resolving the problem.
In short, Turkey‟s decision of no sanctions on Iran does not indicate that Turkish foreign
policy is anti-Western. Rather, it illustrates Turkey‟s growing independence as a regional
power and flexibility in decision-making process with regard to her own interests, such as
gaining image in the Middle East with the new foreign policy doctrine, less independence
on Russian energy imports in place of Iranian one, and prioritizing domestic solutions,
while not upsetting the West‟s mutual interests.
Turkey‟s stance on Iran reflects her neutral stance and mediating effort. Although it is a
fact that Turkey does not apply unilaterally sanctions by the U.S on Iran, it does not mean
that Turkey has deviated from the West. Instead, Turkey is actively playing her mediating
role in resolving the conflict as a bridge between East and West, while preserving her own
internal security and multilateral interests.

References
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Ayman, S. G. (2012). Regional aspirations and limits of power-Turkish-Iranian relations in
the New Middle East. Etudes Helleniques, 1.
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Appendix
The International Atomic Energy Agency (IAEA) released on February 21, 2013 its latest report on the
implementation of NPT safeguards in Iran and the status of Iran‟s compliance with Security Council
resolutions.
Key Findings:
1) Number of installed centrifuges at Natanz Fuel Enrichment Plant (FEP) increases substantially;
2) IR-1 centrifuge installation is occurring at a faster than expected rate at Natanz FEP;
3) New IR-2m advanced centrifuges are being installed at Natanz, although when they will start enriching or
how well they will operate remains unknown;
4) Number of cascades producing near 20 percent low enriched uranium (LEU) is constant;
5) Iran has less than enough 20 percent low enriched uranium hexafluoride for one nuclear weapon, if further
enriched to weapon-grade;
6) Almost all of the cascades at Fordow are now vacuum tested and likely ready for enrichment; 7) Iran
resumes converting near 20 percent LEU hexafluoride to oxide form;

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8) Iran will use the Tehran Research Reactor (TRR) to test IR-40 Arak reactor fuel; continued construction of
the IR-40 reactor is in violation of UNSC resolutions; and,
9) No progress on "structured approach" to resolve outstanding questions about military dimensions and no
access to Parchin, which Iran continues to sanitize.

13

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                <text>The world is being nourished with tremendous development in technology,  which causes the greatest destruction of civilization from the intrinsic  civilization itself. It is believed that nuclear weapons states hold a handful  of nuclear arsenals, strong enough to eradicate completely life on earth.  With the experience of the devastating atomic bombs marking the end of  the Second World War, it is not difficult to say that the whole world is  shaking when there is any state attempting to develop nuclear armaments.  In the case of Iran recently, different approaches and resolutions have  been discussed. Consequently, several of them have been implemented, in  order to prevent the Islamic Republic from pursuing nuclear arsenal,  despite Tehran’s discourses on her intention to have her own nuclear  program for peaceful and civilian purposes. Turkey, as an active regional  player, reflects her position on the issue via the state’s foreign policy. That  Turkey has been hesitating at complying with the West’s sanctions on Iran  poses not only questions but also confusion among the international  community. “Does Turkey’s stance on Iran’s nuclear development program  reflect an axis-shift in Turkish Foreign Policy?”  This paper seeks to answer that question, by analyzing the context that  endorses the Iranian nuclear program in pursuance of nuclear technology,  and by focusing on the discourses offered by the Iranian and Turkish  representatives to the international community concerning the ambiguities  of the Iranian nuclear development program.  In contrast to much in the literature which perceived Turkey as a  moderator, this paper argues that Turkey is more like a facilitator, besides  proposing mediation grounds like the previous Baghdad and Moscow  sponsored mediations between the US/EU and Iran. From this perspective,  Turkey’s stance seems clear in supporting the idea that instead of imposing  sanctions, the West must think of other effective ways to resolve the  nuclear energy. In other words, Ankara believes that diplomatic talks and  negotiations shall be continued and attributed to Iranian nuclear debacle.  Overall, this paper concludes that Turkey’s decision of no sanctions on Iran  does not indicate that Turkish foreign policy is anti-Western. Rather, it illustrates Turkey’s growing independence as a regional power and  flexibility in decision-making process with regard to her own interests, such  as gaining image in the Middle East with the new foreign policy doctrine,  less independence on Russian energy imports by Iran’s alternative, and  prioritizing domestic solutions, while not upsetting the West’s mutual  interests.  In addition, this study will contribute to the existing literature on the part  of the explanation of Iranian diplomacy with regard to the religious  understanding of “taqiyya” (deception) and “qitman” (concealing).  Keywords: Nuclear Program, Iran, Middle East, NPT, Turkish Foreign Policy,  Western Orientation, Axis-Shift.</text>
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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

The Relationship between Social Media and Human
Development: An Analyze on Transition Economies
Mustafa Malkoç Yaşar
Giresun University, Giresun Province, Turkey
malkocyasar@gmail.com
The Human Development Index which measures the average achievements
in a country in three basic dimensions is a summary measure of human
development as known. The Human Development Index is one of the tools
for comparing countries. On the other hand the use of social media is
getting more important nowadays, especially after the Arab Spring. Even
the statistics of social media use is becoming an alternative way for
comparing countries. In fact some of the previous studies have shown that
gross domestic product which is a dimension of human development
somehow affected by the social media. In this study the aim is to
investigate possible relations between human development and social
media in transition economies by using statistical methods.
Keywords: Internet, Social Media, Facebook, Transition Economies,
Development.

216

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                    <text>The Relationship between Social Media and Human Development: An Analyze
on Transition Economies
Mustafa Malkoc Yasar
Giresun University, Giresun, Turkey
malkocyasar@gmail.com
Abstract

The Human Development Index which measures the average achievements in a
country in three basic dimensions is a summary measure of human development
as known. The Human Development Index is one of the tools for comparing
countries. On the other hand the use of social media is getting more important
nowadays, especially after the Arab Spring. Even the statistics of social media
use is becoming an alternative way for comparing countries. In fact some of the
previous studies have shown that gross domestic product which is a dimension
of human development somehow affected by the social media. In this study the
aim is to investigate possible relations between human development and social
media in transition economies by using statistical methods.
Keywords: Internet, Social Media, Facebook, Transition Economies,
Development

Introduction
In early times countries had compared with their GDP values. It was not a fair situation for
small populated countries. After that another comparison type has occurred. GDP per capita
was calculated by dividing GDP to population. Today GDP per capita is not the only way for
comparing countries. Human Development Index (HDI) is an alternative way for comparing
countries. HDI is being affected from various variables. In this study the main aim is to
investigate a possible relation between HDI and social media usage in transition economies.
In this study only ex USSR countries will be examined as transition economies. Other
transition economies will be ignored in this research.
Social media usage is a relative concept. Facebook is the biggest social media website in
social networks. In this study almost all statistics of Facebook will be used to measure social
media.
Firstly some explanations will be given about Human Development Index in section two.
Secondly internet usage will be discussed in section three. Than effects of social media
websites on development will be discussed in section four. Finally comparison will be done
between social media and development in selected transition economies in section five.
Results will be discussed in conclusion section.
Explanation of Human Development Index
The Human Development Index (HDI) is a summary measure of human development. It
measures the average achievements in a country in three basic dimensions of human
development: a long and healthy life (health), access to knowledge (education) and a decent

�standard of living (income). The HDI sets a minimum and a maximum for each dimension,
called goalposts, and then shows where each country stands in relation to these goalposts,
expressed as a value between 0 and 1.
The HDI was created to emphasize that people and their capabilities should be the ultimate
criteria for assessing the development of a country, not economic growth alone. The HDI can
also be used to question national policy choices, asking how two countries with the same level
of GNI per capita can end up with such different human development outcomes.
The education component of the HDI is now measured by mean of years of schooling for
adults aged 25 years and expected years of schooling for children of school entering age.
Mean years of schooling are estimated based on educational attainment data from censuses
and surveys available in the UNESCO Institute for Statistics database and Barro and Lee
(2010) methodology). Expected years of schooling estimates are based on enrolment by age at
all levels of education and population of official school age for each level of education.
Expected years of schooling are capped at 18 years. The indicators are normalized using a
minimum value of zero and maximum values are set to the actual observed maximum value of
mean years of schooling from the countries in the time series, 1980–2010, that is 13.1 years
estimated for Czech Republic in 2005. Expected years of schooling are maximized by its cap
at 18 years. The education index is the geometric mean of two indices.
The life expectancy at birth component of the HDI is calculated using a minimum value of 20
years and maximum value of 83.4 years. This is the observed maximum value of the
indicators from the countries in the time series, 1980–2010. Thus, the longevity component
for a country where life expectancy birth is 55 years would be 0.552.
For the wealth component, the goalpost for minimum income is $100 (PPP) and the
maximum is $107,721 (PPP), both estimated during the same period, 1980-2011. (UNDP,
2012)
After these explanations above components of HDI can be seen from the Figure 1.
Figure 1:Components of the Human Development Index

Source: UNDP (http://hdr.undp.org/en/statistics/hdi/)

Internet Usage

�In this section, internet usage around the world and internet usage in transition economies will
be given respectively.

1 Internet Usage around the World
Internet usage around the world is getting higher day by day. The ratio of internet users in
developing countries is lower than the developed countries. However developing countries
made a significant progress during the past ten years. Today more than two third of people on
the earth can be count as an internet user. Internet usage statistics per 100 inhabitants can be
seen from the Table 1.
Table 1: Internet Usage per 100 Inhabitants
Source: International Telecommunication Union (ITU), (http://www.itu.int/ITU-D/ict/statistics/material/
excel/20112/ictwebsite/Internet_users_01-11.xls)
*Estimate
Country Group/Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*
Developed Countries 29,4 37,7 41,5 46,3 51,3 53,5 59,1 61,3 64,7 68,8 73,8
Developing
Countries
Entire World

2,8

4,3

5,5

6,6

7,7

9,4

12,0

15,0

18,5

21,1

26,3

8,0

10,7

12,3

14,1

15,7

17,5

20,6

23,4

26,5

29,7

34,7

2 Internet Usages in Transition Economies
As mentioned in the section 1, in this study only focus on ex USSR countries. Percentage of
individuals using the internet in related countries for past ten years can be seen from
Appendix I. Due to huge number of statics related to 15 countries, it is not able to seen as a
table here. But it can be said that, Estonia is becoming first among the related countries for
using internet with 74,1% Latvia comes second with 68,42% and finally Lithuania comes
third with the ratio of 62,12% with 2010 stats. Turkmenistan is becoming last with the ratio of
3%.
Effects of Social Media Websites on Development
In this section a short history of social media websites and effecting channels of social media
websites on development will be given respectively.
1 A Short History of Social Media Websites
Actually users in internet in early times did not do different actions than today’s users. Most
of the early users used internet for accessing information, chatting and sharing things via
personal web pages (Yaşar, 2011). The main advantage of social media websites is getting
these things easier. Because without social media websites, users have to know HTML
language a bit for prepare a personal webpage. Today a internet user can do those things in
seconds via social media websites without any knowledge of HTML or any computer
language. So that is the answer of that question: “Why are social media websites popular?”
Social media websites has started in 2002 with “Friendster”. Many other websites has
followed the way which has opened by “Friendster” until today. Today, the most popular
social media website is “Facebook” with more than 900 million members.
2 Effecting Channels of Social Media Websites on Development

�In this section effect of social media websites will be given by dimensions of HDI
respectively.
2.1 Life Expectancy at Birth
Normally effect of social media websites on life expectancy is almost zero according to
writer. Because of those effects of social media websites on this dimension was ignored even
if exists more than zero.
2.2 Education
Social media websites have some positive effect on education. People can attend some
educational programs online. Even they can use social media websites for getting documents
which is related to their education. That encourages education institutions to open new online
programs. People also will be encouraged to attend these programs. Due to the fact that social
media websites can make mean years of schooling higher.
2.3 Income
First of all it must be underlined that social media websites have a big influence on GDP in
various ways. Firstly the need of skilled labor which is well educated on technology is
increasing with the parallel of technological development nowadays. Social media websites
has become so popular that also brought new business fields.
Today most of the companies are sold a large part of their campaign via Facebook and other
social media websites. This case is bringing the new demand of labor that know Facebook
Markup Language and other web languages that is valid for social media websites. At the
same time with that “Social Media Consultancy” is another sector that has newly formed.
These two sectors will increase the labor demand and employment which has a positive effect
on GDP.
Secondly social media will reduce the cost of companies. The reduction will increase
aggregate supply (In AS-AD model, AS curve will shift to the right) that will cause an
increasing on GDP. (Yaşar, 2011)
Comparison on Selected Transition Economies
In this section five of the ex USSR countries will be examined. These five countries have
been selected due to their high ratio of internet usage. Because in these five countries at least
one third of the people are using the internet. Comparison will be done by using HDI value
and Facebook Penetration (FBP) value. Facebook Penetration value will be calculated by
using Formula (1):
Facebook Users In The Country
(1)
FBP 
Countrys Population
Data sets of FBP for each country wereprepared by writer by using various sources. HDI
values for 2012 were published yet. Those values will be launched on March 14, 2013 in
Mexico (UNDP, 2013). At the end of the analyze 2012 HDI values will be estimated for
available countries. 1
1 Azerbaijan

1

Estimations will be done by using Ms Excel software.

�Azerbaijan is one of the most growth country about internet on earth. From 2000 to 2010
numbers of internet users have increased from 12.000 to 3.7 million. She had 30642% growth
rate since 2000. (Pingdom, 2010) Azerbaijan’s values of HDI and FBP can be seen from
Table 2: Azerbaijan’s HDI and FBP Values
Year
2009
2010
2011
2012

HDI Value
No Data
0,699
0,700
Not Published

FBP (%)
No Data
1,66
3,73
9,54

Source: UNDP (for HDI values), and Various Sources 2 (for preparing FBP)

Statistics for Azerbaijan is very limited. From 2010 to 2011 FBP grown 2,07% by the time
HDI value has increased 0,14%.
2 Estonia
Estonia is the most penetrated country about internet within those selected economies with the
penetration rate of 74,1%. Naturally, she is also most penetrated country about Facebook.
Statics for Estonia can be seen from Table 3.
Table 3: Estonia’s HDI and FBP Values
Year
HDI Value
FBP (%)
2009
0,828
4
2010
0,832
17
2011
0,835
27,31
2012
Not Published
35,79
Source: UNDP (for HDI values), and Various Sources3 (for preparing FBP)

If we put three years of HDI and FBP values to correlation analyze, the correlation coefficient
will be calculated as 0,999.That coefficient means that there is a very strong relation between
HDI and FBP values for Estonia. HDI index of Estonia can be estimated by using FBP values
as 0,837585 for 2012.

3 Latvia

2

FBP for all countries was calculated by using many sources. Those sources were given as footnotes in order to
avoid interrupting text. All the webpages below was retrieved November 22, 2012.
http://en.trend.az/capital/it/1934386.html
http://www.rferl.org/content/how_azerbaijan_crushes_online_dissent/24515935.html
http://xeberler.az/eng/2010/11/20/number-of-facebook-users-grows-in-azerbaijan/
http://www.socialbakers.com
3
All the webpages below was retrieved November 24, 2012
http://www.slideshare.net/arjantupan/fb-stats-201010v01-5631327
http://www-958.ibm.com/software/data/cognos/manyeyes/datasets/facebook-penetration-july-2010/versions/1
http://www.socialbakers.com

�Latvia’s FBP rate is not very bright. Twitter has very big effect for this situation. Twitter is
second biggest social media website among the social networks in Latvia. Azerbaijan’s values
of HDI and FBP can be seen from Table 4.
Table 4: Latvia’s HDI and FBP Values
Year
HDI Value
FBP (%)
2009
0,798
1,4
2010
0,802
9
2011
0,805
11,29
2012
Not Published
15,82
Source: UNDP (for HDI values), and Various Sources 4 (for preparing FBP)

The correlation coefficient for those two values is 0,97 for Latvia. HDI index of Latvia can be
estimated by using FBP values as 0,807355 for 2012.
4 Lithuania
Lithuania has caught an impressive growth on FBP from 2009 to 2010. Lithuania’s values can
be seen from Table 5.
Table 5: Lithuania’s HDI and FBP Values
Year
2009
2010
2011
2012

HDI Value
0,802
0,805
0,810
Not Published

FBP (%)
4,4
22
24,33
29,38

Source: UNDP (for HDI values), and Various Sources 5 (for preparing FBP)

The correlation coefficient for Lithuania is 0, 84. Even the value of coefficient for Lithuania is
lower than coefficients of Latvia and Estonia; it still shows the strong relationship between
HDI and FBP values. If we try to estimate HDI value of Lithuania for 2012, we amount HDI
value of Lithuania will be 0, 80958 in 2012. That can see as an unexpected result. Because,
HDI values are growing for all selected countries year by year. But the analyze tells us HDI
value of Lithuania will reduce or remain the same in 2012.
5 Russia
Russia’s situation is very different among the selected countries. Top seven social media
websites in Russia can be seen from the Figure 2.

Figure 2: Top Seven Social Media Websites in Russia
4

All the webpages below was retrieved November 27, 2012
http://www.slideshare.net/arjantupan/fb-stats-201010v01-5631327
http://www.socialbakers.com
5
All the webpages below was retrieved November 27, 2012
http://www.slideshare.net/arjantupan/fb-stats-201010v01-5631327
http://www.socialbakers.com

�Source: Stat Counter Global Stats (http://statcounter.com/ )

Facebook is not the most popular social media website in Russia. Vkontakte comes first with
almost 60% usage. Facebook comes second with 24%according to Figure 2. Because of that
fact the relationship between HDI and FBP values can not show the real situation. Statistics
for Russia can be seen from Table 6.
Table 6: Russia’s HDI and FBP Values
Year

HDI Value

FBP (%)

2009

0,747

0,3

2010

0,751

0,9

2011

0,755

2,70

2012

Not Published

4,38

Source: UNDP (for HDI values), and Various Sources 6 (for preparing FBP)

The correlation coefficient for Russia has calculated as 0,96. The estimation of HDI value of
Russia for 2012 is 0,760. This estimation probably will not actualize due to Russia’s different
situation than other countries. Probably 2012’s HDI value will be lower than 0,760 in Russia.

6

All the webpages below was retrieved June 21, 2012
http://www.slideshare.net/oreillymedia/active-facebook-users-by-country-region-june-2007
http://www.ideagitalmarketing.com/facebook-penetration-by-countries-january-2011.html
http://www.insidefacebook.com/2010/07/06/europes-facebook-growth-moved-east-in-june-2010/
http://www.guardian.co.uk/media/2010/jun/23/mark-zuckerberg-facebook-cannes-lions
http://www.socialbakers.com

�Conclusion
Analysis has done for five countries. Correlation analyzesand estimation has not been done
for Azerbaijan due to limited data. All correlation coefficients are higher than 0,84. That
result shows that there is a very strong relationship between HDI and FBP values. So it can be
said that increasing the social media penetration is another way for development.
At the same time with that HDI values for 2012 has estimated for four countries. The next
publication of Human Development Report which will be on March 14, 2013 in Mexicowill
show the consistency of this research. It may be guessed that the estimation probably will be
approximate for Estonia, Latvia and Lithuania. On the other hand due to her special status,
estimation for Russia will not be show real value as mentioned before.
Internet usage is growing since the start of twenty first century. However social media
websites are very popular among the internet user just a few years. Because of that, statistics
for social media use are not quite enough even Facebook is heading 1 billion users. Especially
marketers have become aware of the importance of those statics. Probably more social media
statics will be used in more analysis in the future if they will be more possible to reach.

References
Balachere, B. (2011, February 2). Facebook Penetration by Country. Retrieved June 21, 2012
from http://www.ideagitalmarketing.com/facebook-penetration-by-countries-january2011.html
Facebook Statistics by Country. (2012).
http://www.socialbakers.com

Retrieved

November

27,

2012,

from

Facebook User Statistics Baltic States October 2010. (2010). Retrieved November 24, 2012,
from http://www.slideshare.net/arjantupan/fb-stats-201010v01-5631327
Hatt, B. (2010, October 28). Facebook Penetration. Retrieved November 24, 2012
http://www-958.ibm.com/software/data/cognos/manyeyes/datasets/facebookpenetration-july-2010/versions/1
How Azerbaijan Goverment Crushes Online Dissent. (2012). Retrieved November 22, 2012,
from
http://www.rferl.org/content/how_azerbaijan_crushes_online_dissent/2451
5935.html
ITU. (2012). Internet Users. Retrieved December 20, 2012, from http://www.itu.int/ITUD/ict/statistics/material/excel/20112/ictwebsite/Internet_users_01-11.xls
ITU. (2013). Percentage of Individuals Using the Internet. Retrieved January 10, 2013, from
http://www.itu.int/ITU-D/ICTEYE/Reports.aspx
Lorica, B. (2009, June 17). Active Facebook Users by Country &amp; Region. Retrieved June 21,
2012 from http://www.slideshare.net/oreillymedia/active-facebook-users-by-countryregion-june-2007

�Morrison, C. (2010, Jully 6). Europe’s Facebook Growth Moved East in June 2010. Retrieved
June 21, 2012 from http://www.insidefacebook.com/2010/07/06/europes-facebookgrowth-moved-east-in-june-2010/
Number of Facebook Users Grows in Azerbaijan. (2010). Retrieved November 22, 2012,
from
http://xeberler.az/eng/2010/11/20/number-of-facebook-users-grows-inazerbaijan/
Stat Counter Global Stats (2012). Top Seven Social Media Websites in Russia. Retrieved
April 28, 2012 from http://statcounter.com/
Sweney, M. (2010, June 23). The Guardian. Mark Zuckerberg: Facebook Almost Guaranteed
to Reach 1 Billion Users. . Retrieved June 21, 2012 from
http://www.guardian.co.uk/media/2010/jun/23/mark-zuckerberg-facebook-canneslions
Trend, H. V. (2011, September 20). Trend. Number of Facebook Users in Azerbaijan exceeds
500,000.
Retrieved
November
22,
2012,
from
http://en.trend.az/capital/it/1934386.html
UNDP. (2012). Human Development Index (HDI). Retrieved October 20, 2012, from
http://hdr.undp.org/en/statistics/hdi/
UNDP (2013). 2013 Human Development Report. Retrieved February 20, 2013, from
http://hdr.undp.org/en/
Yaşar, M. M. (2011). Yeni Ekonomi Düzeninde Sosyal Bir Fenomen: Facebook. 9th
International Conference on Knowledge, Economy and Management Proceedings,
449-460

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

Appendix I
Percentage of Individuals Using the Internet in Selected Transition Economies (From 2000 to 2010)
Armen
ia

Belar
us

Esto
nia

Georgi
a

Kazak
hstan

Kyrg
ystan

Latvia

Lithua
nia

Moldo
va

Russia

Tajikis
tan

Turkm
enistan

Ukrain
e

Uzbekis
tan

2000

Azer
baija
n
0,15

1,3

1,86

28,58

0,48

0,67

1,04

6,32

6,43

1,28

1,98

0,05

0,13

0,72

0,48

2001

0,31

1,63

4,3

31,53

0,99

1,01

3

7,22

7,18

1,49

2,94

0,05

0,18

1,24

0,6

2002

5

1,96

8,95

41,52

1,59

1,67

3

21,94

17,69

3,79

4,13

0,06

0,3

1,87

1,08

2003

No
Data

4,58

No
Data

45,32

2,56

2

3,91

26,98

25,91

7,41

8,3

0,06

0,43

3,15

1,91

2004

No
Data

4,9

No
Data

53,2

3,89

2,65

5,09

38,58

31,23

10,63

12,86

0,08

0,75

3,49

2,59

2005

8,03

5,25

No
Data

61,45

6,08

2,96

10,53

46

36,22

14,63

15,23

0,3

1

3,75

3,34

2006

11,99

5,63

16,2

63,51

7,53

3,27

12,31

53,63

43,9

19,62

18,02

3,77

1,32

4,51

6,39

2007

14,54

6,02

19,7

66,19

8,26

4,02

14,03

59,17

49,9

20,45

24,66

7,2

1,41

6,55

7,49

2008

17,08

6,21

23

70,58

10,01

11

15,7

63,41

55,22

23,39

26,83

8,78

1,75

11

9,08

2009

27,4

15,3

27,43

72,5

20,07

18,2

17

66,84

59,76

27,5

29

10,07

1,95

17,9

17,06

2010

46

No
Data

31,8

74,1

26,9

31,6

18,4

68,42

62,12

32,3

43

11,55

3

23,3

20

Source: ITU (2013)

10

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                <text>The Human Development Index which measures the average achievements  in a country in three basic dimensions is a summary measure of human  development as known. The Human Development Index is one of the tools  for comparing countries. On the other hand the use of social media is  getting more important nowadays, especially after the Arab Spring. Even  the statistics of social media use is becoming an alternative way for  comparing countries. In fact some of the previous studies have shown that  gross domestic product which is a dimension of human development  somehow affected by the social media. In this study the aim is to  investigate possible relations between human development and social  media in transition economies by using statistical methods.  Keywords: Internet, Social Media, Facebook, Transition Economies,  Development.</text>
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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Economic Views of the EU Integration Process of
Macedonia
Agim Mamuti
International University of Sarajevo, Sarajevo, Bosnia and Herzegovina
agim.mamuti@yahoo.com, amamuti@ius.edu.ba
The purpose of this research is to provide a general overview of the
accession process with a special reference to the economic integration and
the challenges of the Republic of Macedonia in the road of joining the
European Union.
The Stabilization and Association Agreement (SAA) between the Republic
of Macedonia and the EU was signed in April 2001 and entered into force
in April 2004. The Council adopted the Accession Partnership for the
country, including key priorities for reform, in February 2008. In October
2009, the Commission recommended to the Council to open negotiations
with the country, as well as to move to the second phase of SAA
Implementation. These recommendations were reiterated in 2010. The
Council has not yet concluded its deliberations on the Commission's
proposals. Visa liberalization for citizens travelling to the Schengen area
has been in force since 19 December 2009.
The decision of the European Council of December 17, 2005 granting the
candidate status for EU membership is an event of historical importance
for the Republic of Macedonia as deserved recognition for the efforts and
results achieved in the way of achieving the strategic goal - EU
membership.
During the last years, the macroeconomic stability of the country has been
maintained despite the continued global economic turbulence. Market
entry and exit procedures have been improved and the rule of law has
been strengthened. However, structural imbalances on the labor market
are still very pronounced and the business environment is still suffering
from slow judiciary, and a number of weak and not fully independent
regulatory and supervisory institutions. The exchange rate against the euro
has remained stable in nominal terms. Price competitiveness has remained
largely unchanged. Trade integration with the EU is well advanced, but
exports remain concentrated on a few price-sensitive products.
Keywords: Economic Criteria, Market Economy, EU, Macedonia, Western
Balkan

11

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                    <text>International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

Economic Views of the EU Integration Process of Macedonia
Agim Mamuti
International University of Sarajevo, Sarajevo, Bosnia and Herzegovina
agim.mamuti@yahoo.com, amamuti@ius.edu.ba
Abstract
The purpose of this research is to provide a general overview of the accession process
with a special reference to the economic integration and the challenges of the Republic
of Macedonia in the road of joining the European Union.
The Stabilization and Association Agreement (SAA) between the Republic of
Macedonia and the EU was signed in April 2001 and entered into force in April 2004.
The Council adopted the Accession Partnership for the country, including key
priorities for reform, in February 2008. In October 2009, the Commission
recommended to the Council to open negotiations with the country, as well as to move
to the second phase of SAA Implementation. These recommendations were reiterated
in 2010. The Council has not yet concluded its deliberations on the Commission's
proposals. Visa liberalization for citizens travelling to the Schengen area has been in
force since 19 December 2009.
The decision of the European Council of December 17, 2005 granting the candidate
status for EU membership is an event of historical importance for the Republic of
Macedonia as deserved recognition for the efforts and results achieved in the way of
achieving the strategic goal - EU membership.
During the last years, the macroeconomic stability of the country has been maintained
despite the continued global economic turbulence. Market entry and exit procedures
have been improved and the rule of law has been strengthened. However, structural
imbalances on the labor market are still very pronounced and the business
environment is still suffering from slow judiciary, and a number of weak and not fully
independent regulatory and supervisory institutions. The exchange rate against the
euro has remained stable in nominal terms. Price competitiveness has remained largely
unchanged. Trade integration with the EU is well advanced, but exports remain
concentrated on a few price-sensitive products.
Key words:Economic Criteria, Market Economy, EU, Macedonia, Western Balkan

1. Introduction
The Republic of Macedonia has a small, open economy, and advanced trade integration
with the EU. About 64% of all exports currently go to the EU-27 and about 56% of imports
originate there.
The country‟s second largest trading area is the CEFTA (Central European Free Trade
Agreement), which accounts for around 24% of exports and around 11% of imports. The
export structure has improved, with an increase in the share of higher unit value
commodities, such as car emission catalysts. However, textiles, clothing and manufactured
iron products still account for more than one third of total exports. FDI accounts for about
50% of GDP, with 80% of the investment stock coming from the EU. The exchange rate
against the euro has remained stable in nominal terms. Price competitiveness has remained
7

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

largely unchanged. This is reflected in the largely unchanged real effective exchange rate,
which in mid-2012 was some 1% lower than a year before.
Generally in 2012, trade integration with the EU is well advanced. The commodity
composition of exports has improved, although traditional products, such as textiles,
clothing and steel, still predominate. International price competitiveness remained largely
unchanged.1
2. Economic Views of EU Integration Process of Macedonia
Fulfillment of the economic criteria for membership must be a top priority for Macedonia,
not only in order to meet the standards of the EU, but also because they are crucial for
Macedonia‟s economic and social progress. Macedonia needs to fully develop a
functioning market economy that will allow an even ground for competition and weed out
all the oligarchic elements in the economy that stifle its overall growth. The Macedonian
economy needs to be able to cope with the intense competitive pressures and market forces
within the EU. Consequently, Macedonia needs to be aiming for where the EU economy
will be, not where the EU economy is today.
A broad consensus has been maintained on the fundamental features of the country‟s
economic policy set-up. The medium-term policy framework was described in various
programs, such as the sixth pre-accession economic program (PEP), covering the period
2012-2014, the labor market strategy for 2015 and the national employment action plan for
2011-2013. In addition, the authorities embarked on a high-level accession dialogue
(HLAD) with the EU, which provided another platform for accelerating accession-related
reforms in the economy. Cooperation with the International Financial Institutions (IFIs),
such as the World Bank and the International Monetary Fund (IMF) continued. Structured
dialogue with the business community continued.
2.1 Macroeconomic Indicators About 2011 and 2012
The economy grew by about 3% in 2011, but shrank by about 1% year-on-year in the first
half of 2012, compared with growth of nearly 5% in the first half the year before. Rather
resilient private consumption helped to prevent a sharper slowdown, while the reduction in
public consumption had a negative contribution to growth. Indicators on domestic
production point to a marked year-on-year deceleration during the reporting period, with
industrial production being on average nearly 9% lower since October 2011 than in the
same period the year before. Average per capita GDP improved in relation to the EU
average, increasing from 35% of the EU average in 2010 to 36% in 2011. (Ministry of
Finance of RM, Annual Economic Report 2011/2012; www.finance.gov.mk).
External imbalances declined, but their financing deteriorated. In the first half of 2012, the
current account deficit was at about -2.8% of the estimated full-year GDP, compared to 3.5% of GDP the year before. The most important factor for the improvement was a further
increase of current transfers to about 10% of the estimated full-year GDP. The trade
balance of goods and services deteriorated slightly, reaching -12% of estimated full-year
1

Source of the selected data‟s:
State Statistical Office of Macedonia, www.stat.gov.mk, and the Ministry of Finance of RM,
www.finance.gov.mk

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�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

GDP, compared to -11% of GDP the year before, mainly as a result of weaker export
revenues. The capital and financial account surplus shrank to a similar extent, declining to
about 2.6% of GDP by June 2012, compared to a surplus of 4% a year before. FDI inflows
and other investment declined to about 1% of the estimated full-year GDP and 0.6% of
GDP respectively, compared to 2% of GDP and 4% of GDP a year before. As a result, the
financing of the current account deficit was less based on investment inflows but on
external credits. (Ministry of Finance of RM, Annual Economic Report 2011/2012;
www.finance.gov.mk)
Unemployment was very high at 31.2% and remained largely unchanged year-on-year in
the second quarter of 2012, while during winter it had been about 1 percentage point higher
than in the year before. Employment was about 1% higher than a year before but its impact
on unemployment was limited, as most newly employed persons appear not to have been
registered in the labor market before. The main sectors with employment growth in the
second quarter of 2012 were education, the textile industry and municipal services. Youth
unemployment increased slightly, from 54.6% in the second quarter of 2011 to 54.9% in
the second quarter of 2012. The young account for about 10% of the labor force, but their
share in unemployment rose from 18.5% in the second quarter of 2011 to 18.8% in the
second quarter of 2012. Unemployment among the less-well educated, who makes up
nearly 30% of the labor force, has declined, from 39% in the second quarter of 2011 to
36% in the second quarter of 2012. Employment in the public sector increased by about
1% year-on-year, mainly in the education sector. However, as a share in total employment
the share of public sector employment has declined from 22% in mid-2011 to 21% in mid2012. (Ministry of Labor and Social Policy of RM, www.mtsp.gov.mk)
Monetary policy cautiously supported the gradual recovery, while the exchange rate policy
remained geared to maintaining price stability and the de facto peg to the euro. The Central
Bank has slightly lowered its key policy rate, from 4% to 3¾%. In order to support the
lending activities of the financial sector, the Central Bank amended the rules on minimum
reserve requirements and collateral. It also introduced a number of measures to stimulate
financial market activity, such as establishing new monetary instruments, a new overnight
deposit facility and a one-week deposit facility, a standing 7-day repo facility and by
lowering the interest spreads between overnight deposit rates and Central Bank bills.
(Central Bank of RM, Annual Report 2012, www.nbrm.mk)
Inflation was markedly lower than a year before, with an average inflation in the first eight
months of 2012 of 2.4%, compared to 4.4% the same period a year before. However,
during recent months, inflationary pressures have increased. The main sources for the
increase lie in higher energy prices, but also rising food prices and rent costs. Prices for
food and beverages account for about 40% of the consumer basket. Core inflation, which
excludes the impact of energy and food prices on the overall price level, remained fairly
stable and below 2%. (Ministry of Finance of RM, Annual Economic Report 2011/2012;
www.finance.gov.mk)
The published central government deficit for 2011 was in line with the 2.5% of GDP
target. Revenue, which accounts for some 30% of GDP, was some 7.5% lower than
initially expected. In order to meet the deficit target, spending was reduced by about 7%,
mainly on purchases of goods and services, which were kept some 19% below their initial
budget target. Capital investment was also kept some 16% lower than originally planned.
However, as a share of GDP capital spending rose, from 3.5% in 2010 to 3.8% in 2011,

9

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

while overall spending declined from 32.0% of GDP to 31.2%. In 2012, revenues have so
far remained below forecasts and dropped by 3% in real terms. To compensate for the
shortfall, the authorities adopted a supplementary budget and raised the deficit target for
2012 from -2.5% of GDP to -3.5%. So far, the main area of spending cuts was again
capital spending, accounting in July for about 1.8% of the estimated full-year GDP,
compared to 2.4% a year before. In the first seven months of 2012, published data point to
a deficit of about 2% of the estimated full-year GDP, which is a similar level as the year
before. The government debt ratio rose to about 30% of GDP in July 2012, compared to
around 25% the year before, mainly due to increased domestic lending. (Ministry of
Finance of RM, Annual Economic Report 2011/2012; www.finance.gov.mk)
2.2 The Capacity to Cope with Competitive Pressure and Market Forces
During 2012 in Macedonian economy, generally macroeconomic stability has been
maintained. Market entry and exit procedures have been improved. Some steps have been
taken to strengthen the rule of law. However, so far, those measures have not had
significant impact yet. The quality of public finance planning and management has
deteriorated and the quality of spending has remained low. Unemployment remains very
high, particularly among the young. The business environment continues to suffer from
institutional and administrative weaknesses, difficult contract enforcement and corruption.
The government has continued its efforts to facilitate market entry and exit. However,
partly due to the less supportive international economic environment, the number of newly
established companies has declined to slightly below 10% of the total number of
enterprises. Limited access to finance is still impeding the growth of many companies, in
particular of small and medium-sized enterprises (SMEs). The third phase of the
„regulatory guillotine‟ project, which focuses on reducing administrative burdens, is being
implemented and the fourth phase, concentrating on measures for SMEs, has started.
Further progress has been made towards closing down non-operating companies. In the
period October 2011 and August 2012, the number of bankruptcy procedures was some
32% higher than a year before. The average duration of company liquidation has been
reduced. (Ministry of Economy of RM, www.economy.gov.mk)
There were no major changes in the area of restructuring enterprises. Network industries
are dominated by a very small number of incumbent suppliers, which often undermines
effective competition. SMEs continue to be by far the biggest group of companies,
providing more than 80% of private-sector employment or nearly 60% of total
employment. Access to finance improved, partly thanks to additional international credit
facilities, primarily provided by the European Investment Bank (EIB). Furthermore, the
government continues to subsidy interest costs for SME loans, although on a declining
scale in the 2012 budget. (Ministry of Economy of RM, www.economy.gov.mk)
The Republic of Macedonia has a small, open economy, and advanced trade integration
with the EU. About 64% of all exports currently go to the EU-27 and about 56% of imports
originate there.
The country‟s second largest trading area is the CEFTA, which accounts for around 24%
of exports and around 11% of imports. The export structure has improved, with an increase
in the share of higher unit value commodities, such as car emission catalysts. However,
textiles, clothing and manufactured iron products still account for more than one third of
total exports. FDI accounts for about 50% of GDP, with 80% of the investment stock

10

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

coming from the EU. The exchange rate against the euro has remained stable in nominal
terms. Price competitiveness has remained largely unchanged. This is reflected in the
largely unchanged real effective exchange rate, which in mid-2012 was some 1% lower
than a year before.
Generally in 2012, trade integration with the EU is well advanced. The commodity
composition of exports has improved, although traditional products, such as textiles,
clothing and steel, still predominate. International price competitiveness remained largely
unchanged. (Ministry of Finance of RM, Annual Economic Report 2011/2012;
www.finance.gov.mk)
3. Conclusion
Experience shows that transition economies including all the “new” as well as the Western
Balkan candidate countries have by and large met the first of the two Copenhagen
economic criteria. All these countries, including Macedonia, are functioning market
economies. The differences among them are much larger with respect to the second sub
criteria, the ability to cope with the competitive pressures of the single EU market.
The economic results achieved by the Republic of Macedonia during the transition are far
lower than the achievements in the South-eastern European countries. The numerous noneconomic events in the country and the region in the 1990‟s and the beginning of the
century also contributes to this. With a low inflation rate of 2.5% in last years and a stable
exchange rate (with one devaluation of 16% in 1997), Macedonia was a leader among the
transition countries in terms of the macroeconomic stability, but numerous non-economic
events in the country and the region led to a low average growth in the entire transition
period.
In the recent years, the Republic of Macedonia generally meets most of the Maastricht
criteria. The single bigger problem that the country is facing is the non-existence of a long
term 10-year bond used as a reference instrument when defining the interest rate. In this
period, the Maastricht criteria are not obligatory for the Republic of Macedonia but they
still have great significance for approximation of our economy to the European Union.
Having in mind the present situation within the EU, regarding the negative atmosphere for
enlargement, the implementation of Copenhagen and Maastricht criteria will simply not be
good enough for candidate countries such as Macedonia. Knowing that in the past a
decision for accession was often made for geo-strategic reasons, obtaining political support
is even more important factor for the Macedonian accession to the EU. Taking into
consideration this fact, it is a need Macedonia to solve the name issue with Greece.

References
Вернер Вајденфелд, Волфганг Веселс, Европа од А до Ш, Издадено во Baden-Baden,
2009
Државен завод за статистика, Годишни извештаи 2008-2012
European Commission, Progress Report of the FYR Macedonia 2012, Brussels

11

�International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo

Ласкомбе, М.&amp; Ванденриеш, Х., Јавни финансии, Скопје, 2006 година
Ministry of Finance of RM, Annual Economic Report 2011-2012
Народна банка на Република Македонија, Годишни извештаи 2008-2012
Секретаријат за европски праша (Влада на Република Македонија), Национална
програма за усвојување на правото на ЕУ – ревизија 2012, Скопје
Рен, Оли: Следните граници на Европа, Скопје, 2007 година
Студија, Приближување кон Европската Унија: предизвици и можности, Скопје,
2009 година
Трпески, Проф.д-р Љубе: Пари и банкарство, второ дополнето и изменето издание,
Economy Press, Скопје, 2005 година
Treaty of European Union, Maastricht, 07.02.1992
TREATY establishing the European Economic Community, 29.07.1992
Werner Weidenfeld &amp; Wolfgang Wessels, Europa von A bis Z, Bonn, 2002
Internet sources:
1. http://europa.eu/
2. http://ec.europa.eu
3. http://www.delmkd.ec.europa.eu
4. http://ec.europa.eu/dgs_en.htm
5. http://eurotreaties.com
6. http://ecb.int
7. http://ec.europa.eu/eurostat
8. http://europa.eu/abc/obj/treaties/index_en.htm
9. http://eur-lex.europa.eu/en/index.htm
10. http://worldbank.org
11. http://imf.org

12

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                <text>The purpose of this research is to provide a general overview of the  accession process with a special reference to the economic integration and  the challenges of the Republic of Macedonia in the road of joining the  European Union.  The Stabilization and Association Agreement (SAA) between the Republic  of Macedonia and the EU was signed in April 2001 and entered into force  in April 2004. The Council adopted the Accession Partnership for the  country, including key priorities for reform, in February 2008. In October  2009, the Commission recommended to the Council to open negotiations  with the country, as well as to move to the second phase of SAA  Implementation. These recommendations were reiterated in 2010. The  Council has not yet concluded its deliberations on the Commission's  proposals. Visa liberalization for citizens travelling to the Schengen area  has been in force since 19 December 2009.  The decision of the European Council of December 17, 2005 granting the  candidate status for EU membership is an event of historical importance  for the Republic of Macedonia as deserved recognition for the efforts and  results achieved in the way of achieving the strategic goal - EU  membership.  During the last years, the macroeconomic stability of the country has been  maintained despite the continued global economic turbulence. Market  entry and exit procedures have been improved and the rule of law has  been strengthened. However, structural imbalances on the labor market  are still very pronounced and the business environment is still suffering  from slow judiciary, and a number of weak and not fully independent  regulatory and supervisory institutions. The exchange rate against the euro  has remained stable in nominal terms. Price competitiveness has remained  largely unchanged. Trade integration with the EU is well advanced, but  exports remain concentrated on a few price-sensitive products.  Keywords: Economic Criteria, Market Economy, EU, Macedonia, Western  Balkan</text>
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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Cyberspace and Virtual Reality Tools of Advertising in
the Real World: a New Paradigm in Marketing
Communication
Begüm Maral
Gediz University, İzmir, Turkey
begum.maral@gediz.edu.tr
Neval Tuna
Gediz University, İzmir, Turkey
neval.tuna@gediz.edu.tr

Literature in advertising and new technological information systems
suggests that internet network technologies generate new integrated
applications. Day after day, computer-based cyberspace programs with
realistic shadows and reflections take the attention of different sectors
such as, biology, medicine, and advertising etc. At the first times, virtual
reality and cyberspace advertisements are seemed to be a manifest.
Recently, advertisements which use virtual reality technologies are seemed
to be new marketing trend. Advertisements and marketing applications
which are arranged through virtual reality are generated with the help of
these integrated applications, called Cyberspace. ‘Cyberspace’ is an
artificially generated automated system which can be visited
simultaneously by many people via network computers. Cyberspace
advertisements are generated through bundle of rays or holograms. With
the virtual reality advertisements, cyberspace, which is one of the
dimensions of postmodern world, is now a new tool for reaching
customer’s mind, attracting more attention, creating more awareness and
support the consumption stage. Multi-sensory computer-based programs
which are used for cyberspace and interactive advertising in the
consumer’s minds are now seemed to change the current consumer
behavior and profiles. At the same time these systems, undoubtedly
support the creative advertisement creation process. Therefore, the
traditional marketing practices between producers and consumers start to
become more interactive. With these new creative applications, customers
are involved in the virtual reality marketing process interactively which in
turn expected to create a new paradigm in marketing practices. Thereby,
new virtual reality advertisement and marketing applications in
Cyberspace world are now increasing and expected to be in advance of

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conventional marketing applications. These new technologies also affect
the advertisers, advertising agencies and marketing practitioners. This
study aims to introduce the new concepts of cyberspace and virtual reality
advertising in the light of new technologies and marketing and secondly
aims to determine the differences between conventional marketing
techniques and cyberspace marketing throughout the Semiotics Approach.
The research method of the paper is to analyze the real world applications
of virtual reality advertisements throughout the world with using semiotic
approaches and this paper offers a framework for understanding how
virtual reality advertising is used in marketing communication by using
Semiotic Research Methods.
Keywords: Cyber, Cyberspace, Virtual Reality, Cyberspace Advertising,
Virtual Reality Advertising.

56

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                <text>Literature in advertising and new technological information systems  suggests that internet network technologies generate new integrated  applications. Day after day, computer-based cyberspace programs with  realistic shadows and reflections take the attention of different sectors  such as, biology, medicine, and advertising etc. At the first times, virtual  reality and cyberspace advertisements are seemed to be a manifest.  Recently, advertisements which use virtual reality technologies are seemed  to be new marketing trend. Advertisements and marketing applications  which are arranged through virtual reality are generated with the help of  these integrated applications, called Cyberspace. ‘Cyberspace’ is an  artificially generated automated system which can be visited  simultaneously by many people via network computers. Cyberspace  advertisements are generated through bundle of rays or holograms. With  the virtual reality advertisements, cyberspace, which is one of the  dimensions of postmodern world, is now a new tool for reaching  customer’s mind, attracting more attention, creating more awareness and  support the consumption stage. Multi-sensory computer-based programs  which are used for cyberspace and interactive advertising in the  consumer’s minds are now seemed to change the current consumer  behavior and profiles. At the same time these systems, undoubtedly  support the creative advertisement creation process. Therefore, the  traditional marketing practices between producers and consumers start to  become more interactive. With these new creative applications, customers  are involved in the virtual reality marketing process interactively which in  turn expected to create a new paradigm in marketing practices. Thereby,  new virtual reality advertisement and marketing applications in  Cyberspace world are now increasing and expected to be in advance of conventional marketing applications. These new technologies also affect  the advertisers, advertising agencies and marketing practitioners. This  study aims to introduce the new concepts of cyberspace and virtual reality  advertising in the light of new technologies and marketing and secondly  aims to determine the differences between conventional marketing  techniques and cyberspace marketing throughout the Semiotics Approach.  The research method of the paper is to analyze the real world applications  of virtual reality advertisements throughout the world with using semiotic  approaches and this paper offers a framework for understanding how  virtual reality advertising is used in marketing communication by using  Semiotic Research Methods.  Keywords: Cyber, Cyberspace, Virtual Reality, Cyberspace Advertising,  Virtual Reality Advertising.</text>
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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Thinking "I" And "The Company" Were the Same
Ensar Mekic
International Burch University, Sarajevo, Bosnia and Herzegovina
emekic@ibu.edu.ba
Emina Mekic
International Burch University, Sarajevo, Bosnia and Herzegovina
eminaheric@gmail.com
The main objective of this paper is not only to explain and discuss
managerial problem known as „I and company are the same“, but also to
propose adequate solution that will be beneficial for managers in their
practice. By using literature review methodological approach, several
factors that are strongly related to this problem have been identified.
Beside power and influence as important factors to consider, there are so
called „shadows that leaders fail to recognize“, that are responsible for
misleading manager to the point where he identify company by himself. At
the end, there are guidelines based on specific literature which are useful
for avoidance and solving this problem.
Keywords: Management, Leadership, Power, Influence, Mistake.

102

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                    <text>International Conference on EconomicandSocialStudies (ICESoS’13), 10-11 May, 2013, Sarajevo

Thinking "I" And "The Company" Were the Same
EnsarMekic
International Burch University, Sarajevo, Bosnia and Herzegovina
emekic@ibu.edu.ba
EminaMekic
International Burch University, Sarajevo, Bosnia and Herzegovina
eminaheric@gmail.com
Abstract
The main objective of this paper is not only to explain and discuss managerial problem
known as „I and company are the same“, but also to propose adequate solution that
will be beneficial for managers in their practice. By using literature review
methodological approach, several factors that are strongly related to this problem have
been identified. Beside power and influence as important factors to consider, there are
so called „shadows that leaders fail to recognize“, that are responsible for misleading
manager to the point where he identify company by himself. At the end, there are
guidelines based on specific literature which are useful for avoidance and solving this
problem.
Keywords: Management, Leadership, Power, Influence, Mistake.

Introduction
Intention of this paper was to emphasize both, the positive and negative side of leadership
in business by paying special attention to the later. To realize this, literature review has
been prepared and the work was divided into three parts. Since topic is closely related to
companies, and this essay is not only about management, but about leadership as well, in
the first part of reflection paper, differences and also inseparable linkages between leaders
and managers were emphasized. For one company, having a good manager is of great
importance, but having a leader is its competitive advantage. In the second part you will be
able to discuss the power as strength and power as threat for a company. This issue leads to
two faces of leadership, positive one, and dark one. In the last, third part, we explained
how dark side of using power can lead to the point when manager thinks that he/she and
company were the same. This point is example of mature stage of improper usage of power
in business, and it represents huge managerial failure. Also, this paper proposes solutions
and advices for how to avoid such a failure, and how to become great manager by being a
good leader.
Literature Review
Paper written by Patrick A. Duignan (1988) is paper that discusses management as an art
or a science? This article argues very strongly that management is, in fact, an art, and
raises interesting distinctions between management and leadership. Maybe the most
important part of his work which contributes to this paper is sub title „Management and
Organisational Structures Can and Should Facilitate Leadership“ in which he stated that
through the organisational structures, and the management processes and procedures,
leadership act finds concrete expression (Patrick A Duignan, 1988).

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Leadership is present in all aspects of management. Sonny Nwankwo and Bill Richardson
(1996) discussed Quality management through visionary leadership and concluded that
visionary leaders focus on quality, and exemplify the critical leadership competence in
quality management, as a basis for successful strategic development (Sonny Nwankwo and
Bill Richardson, 1996).
Inseparable linkage of leadership and management has been discussed always and from
various perspectives of different authors. However, some concepts remained unclear. From
1988, we go to new literature written after second millenium (after 2000) and see this fact
in reality.
Hester Nienaber (2010) wrote a paper with purpose to explore the concepts of management
and leadership. He founf through literature review that the concepts of management and
leadership are intertwined. Accordingly, the word “management” has French and Italian
roots, while the word “leadership” has Greek and Latin roots. He stated that in essence,
these words are synonymous. All of the tasks fall within the boundaries of management,
while leadership tasks overlap with management. Unlike management, leadership has no
distinct task that falls exclusively within its boundary (Hester Nienaber, 2010).
Prudence A. Clarke (2009) discussed the differences between management and leadership
within the project environment. His paper highlights the need not only to understand the
difference between project management and leadership, but also to use this differentiation
in the identification, assessment and development of project services providers and as an
integral part of organisational and people development for all companies involved in
sponsoring, supporting or delivering projects (Prudence A. Clarke, 2009).
According to Erwin Rausch (2003), there are eight questions that provide comprehensive
system that can help managers to become more competent as managers, and as leaders.
Those questions are simply about goals, communications, participation, competence,
satisfaction, cooperation, norms and reviews (Erwin Rausch, 2003).
Leadership vs. Management
Since the topic of this paper is closely related to companies, and companies are managed
by managers, we will firstly go through definitions, differences and inseparable linkages
between managers and leaders. If we refer to comprehensive definition by Gary Yukl who
said: “Leadership is a process of influencing others to understand and agree about what
needs to be done and how to do it, and the process of facilitating individual and collective
efforts to accomplish shared objectives.”, we will recognize some managerial functions
within of it. Process of influencing others to understand and agree, for managers can mean
motivating employees to perform well, making sure that each one of them properly
understand his/her duties, have skills and knowledge to achieve their job related tasks. The
last part of definition which says that leadership is a process of facilitating individual and
collective efforts, from managerial perspective would be providing support in terms of
equipment, trainings and everything else they need to be effective and efficient. Also, the
fact that in the book “Leadership in Organizations”, Yukl is using terms “leader” and
“manager” as synonyms, shows inseparable linkage between these two. According to
Ricky W. Griffin, management is set of activities consisted of Planning and Decision
Making, Organizing, Leading and Controlling. Those whose primary responsibility is to
carry out mentioned activities are called managers. After we defined these two terms we

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can conclude that every leader is a manager, but not every manager is a leader. Leadership
is of great importance for management because they are connected and complementary. Of
course, there are some differences between managers and leaders. According to Yukl,
while managers value stability, order, efficiency and plan in the short-term, leaders value
flexibility, innovation, adaptation and they plan in the long-term. However, all of
mentioned characteristics are important in specific situations and specific life cycle stages
of every organization. In the end, we can conclude that having a manager with leadership
characteristics is great advantage for every company.
Power and influence, strength or threat?
Yukl stated that power refers to capacity of one party (the “agent”) to influence another
party (the “target”). Since there are different sources of power, there are different types of
power as well. Managers can have power by their position (legitimate, reward, coercive,
information and ecological) and person (referent and expert power). Each one of
mentioned power types can be used in good and bad way and manager has to know exactly
where to use specific type of power, and how much to use. When it comes to manager’s
intentions, power can be used for wealth of organization, but also for personal wealth. This
opens a door to discuss two sides of leadership, or “Two faces of leadership” as John B.
Washbush and Christine Clements say in their article. In the abstract, they mentioned
psychologist David McClelland, who mentioned two types of power in his studies of
managerial motivation: egoistic (using others for personal gain) and social (facilitating
group cooperation and effort for the achievement of the general good). John B. Washbush
and Christine Clements also said that leadership as influencing skill can have positive and
negative results, and because of that it is not good always to define it as „doing the right
thing“. Authors defined the positive face of leadership as the one who necessarily involves
moral purpose. Dark side of it is of course the opposite and it refers to situations when
agent with personal power seeks to use position and charisma for personal gain. Important
thing to bear in mind is that leadership is instrumental in promoting social good, but it can
lead to social disaster as well. Most often, theory and education focuses only on positive
side of leadership, and dark side is being neglected. As John B. W. and Christine C.
mentioned, bad decision making, frustration, dysfunctional organizations, unintended
consequences, wasted resources, ruined careers, organizational decline or dissolution are
not always accidents, they are very often consequences of leadership's dark side. Parker
Palmer (1994, pp. 25-6) was emphasizing need to inside the leaders and prepare them
spiritually firstly, and than focus on development of their skills to manipulate external
world. Unfortunately, most of leadership development programs neglect spiritual
preparation, and create threats for companies and society.
Shadows that leaders fail to recognize
In the essay Leaders, Fools and Imposters written by Kets de Vries (1993), it is mentioned
that leaders actually often have no idea about the dangerous side of leadership they are
exposed to. Such a shadows by Kets de Vries mentioned in article of John B. W. and
Christine C. are:
a) Mirroring refers to leaders' tendency to see themselves through the eyes of
subordinates. They are actually focusing on how followers see them, and they are
trying to satisfy all their projections. In other words, they forgot that Leadership is

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two ways traffic. This can be extremely dangerous in a case of actions with serious
and negative consequences for company.
b) Narcisismrefers to leader's tendency to need power, prestidge and enjoy
manipulation of others. This can lead to very negative leader behavior suci is:
intolerant of criticism, unwilling to compromise, and frequently surrounding
themselves with sychopants.
c) Emotional illiteracy is inability to differentiate and verbalize emotion. Such a
people have lack of emotional ability to empathize, energize, foster creativity and
respond appropriately to conflict.
d) Fear of losing the position is strong ego identification with a leadership position.
In the head of such a person, losing the position is being equal with nothing. The
fear that their legacy will be destroyed motivates them to hold on power as long as
possible.
Once again, these shadows are reminding us that leaders needs to understand themselves,
their personalities, be open to all forms of information and feedback and have right extent
of being sensitive to what subordinates are telling them.
If they don't do this, they will be slaves of leadership shadows we mentioned above, and
they will come to point in which they will think that they are the company, they are the
organization, and nothing else is important.
Thinking „I“ and „The Company“ were the same
“I am the state.”(Louis XIV)
Leah Brown, CEO of A10 Clinical, which runs clinical trials for new drugs and conducts
health research said: “During the start-up phase, I had so much passion behind the
business that I would measure my self-worth based on how well the company was doing.
This is totally the wrong way to think. The entrepreneur is a human being. The business is
an entity. I had to learn to separate the two; otherwise I found myself down in the dumps
when things went wrong with the business. When things don’t go according to plan, this is
the most crucial time for the entrepreneur to be inspiring, enterprising, fearless, and most
importantly self-assuring to oneself and the team.”i
When we read this quotation and then turn back to John B. W. and Christine Clements'
article, we can easily notice the parallel. In the beginning of their article, authors in context
of McClelland's work (1970, 1976) said that people who employ personal power see
followers as utilitarian tools, incapable of independent thought, and captured by the
magnetism of an overwhelming personality. Such managers are not open to any kind of
feedback, they do not have exchange with subordinates, they do not explain their requests,
they even exceed their scope of authority, they don't offer rewards, they are not calm and
they can't avoid appearance of hostility, sometimes they use punishments that are not
legitimate and fair, they do not act supportive etc. Of course, as we already mentioned,
behaviors like this will lead to bad decision making, frustration, dysfunctional
organizations, wasted resources, ruined careers, organizational decline and similar negative
consequences. In conclusion, we can say that manager's thinking that he is the same as the
company, is one of the biggest and one of the most dectructive managerial mistakes he can
make.

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Proposals for Solving the Problem
The best solution always is avoidance of the problem, most often it means cutting the root.
Since the root of this problem is of internal nature which means that it is within the
manager (leader), theorists will have to focus on dark side of leadership to same extent
they are focusing on leadership as “doing the right things”. The mentioned concern of
Parker Palmer is very important in creating solution for this problem. Leaders’ trainings
should be prepared in a way that they firstly prepare them spiritually, and then prepare
them to influence external world. In other words, leaders should be firstly aware of what is
the purpose of their power, where they should use it, how they should use it, and to which
extent they should use it. Additionally, we can mention some guidelines and advices by
Yukl when it comes to proper usage of power. These guidelines should be always in mind
of every manager:
- Make polite clear requests, and explain the reason for request,
- Don’t exceed your scope of authority, and verify authority if necessary,
- Follow up proper channels,
- Insist on compliance if appropriate,
- Offer types of rewards that people desire, and that are fair and ethical,
- Use rewards symbolically (not in a manipulative way),
- Explain rules and requirements, and ensure that people understand them,
- Don’t show favoritism when responding to infractions,
- Investigate to get the facts before using punishments, and avoid jumping
to conclusions,
- Provide verbal warnings before punishments, and administer such a
warnings in private,
- Use only punishments that are legitimate, fair and according to
seriousness of infraction,
- Act supportive and helpful,
- Do unsolicited favors,
- Make self-sacrifices to show concern,
Conclusion
History taught us that power in wrong hands leads to disaster. Every leader is a manager
but every manager is not a leader. Manager with leadership characteristics is better for
company than manager without them. However, leadership has its traps, and only those
who are always aware of their own skills, competencies and leadership characteristics,
companies’ strategic objectives, stakeholders and their needs, and of importance to have
sustainable and moral approach to leadership, they will be great managers. This study
shows what happens in opposite situation. More accurately said, it shows us how person
can come to position when he/she is not aware of his/her activities and what kind of
consequences can arise if he/she is neglecting this small, but important list. Of course, not
less important contribution by this paper is solution for such a problems based on literature
review. Another aim of this work is to be incentive for paying more attention on potential
negative side of leadership by theorists and academics in education process so failures can
be avoided.

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References
Erwin Rausch, (2003) "Guidelines for management and leadership decision", Management
Decision, Vol. 41 Iss: 10, pp.979 – 988
Gary Yukl. Leadership in organizations, Pearson, New York.
Hester Nienaber, (2010) "Conceptualisation of management and leadership", Management
Decision, Vol. 48 Iss: 5, pp.661 – 675
John B. W., Christine C. (1999). The two faces of leadership, Career Development
International,Vol. 4
Kets de Vries, M.F.R. (1993), Leaders, Fools and Imposters: Essays on the Psychology of
Leadership, Jossey-Bass, San Francisco, CA.
Patrick A. Duignan, (1988) "Reflective Management: The Key to Quality Leadership",
International Journal of Educational Management, Vol. 2 Iss: 2, pp.3 – 12
Prudence A. Clarke, (2009) "Leadership, beyond project management", Industrial and
Commercial Training, Vol. 41 Iss: 4, pp.187 – 194
Ricky W. Griffin. Management, New York
Sonny Nwankwo, Bill Richardson, (1996) "Quality management through visionary
leadership", Managing Service Quality, Vol. 6 Iss: 4, pp.44 – 47

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                    <text>International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo

Could burnout be a reason behind airlines accident? An
Empirical Study in Turkish Airlines Companies
Cengiz Mengenci
Yalova University, Yalova, Turkey
cengiz.mengenci@yalova.edu.tr

Şenay Yürür
Yalova University, Yalova, Turkey
senyurur@gmail.com

Ömür Gündüz Topçu
Turkish Airlines Company, İstanbul, Turkey
Competitive advantage is highly important factor in all sectors. It would be said that
having and sustaining competitive advantage in airlines companies depend on
safety of flight and quality of services in flight and on the ground. Pilots and flight
attendants, in good mental, psychological and physical health give passengers
guaranty of safe flight and also high quality of services.
On the other hand, research results show that % 60 to % 80 of aircraft accidents
happen due to human factor. Researchers try to figure out where human factor
makes mistakes. Stress and fatigue were defined one of the reason behind human
mistakes and aircraft accidents.
According to literature, Burnout syndrome might cause companies workers to have
negative, callous and dehumanized responses to their customer, increase turnover
intention, high stress, job dissatisfaction and decrease the quality of services. This
syndrome might be the reason that cockpit and cabin crew live and suffer from
stress and fatigue, cause for accident and low quality service in airlines companies.
In this study aims to figure out burnout relationship with stress and supervisory
support and how much burnout differ according to professional position difference
in cockpit and the cabin of the aircraft. To collect data, Peeters, Buunk ve
Schaufeli’s (1995) supervisory support survey, House and Rizzo-(1972) stress survey
and Maslach burnout inventory survey will be used. Surveys will be delivered to
Turkish Airlines Companies. Data will be collected from pilot, copilot and flight
attendants. To analysis survey data, correlation and regression analysis will be
used. According to the hypothesis developed, the relationships between burnout,
stress and supervisory support will be analyzed and findings will be reported.
This study will contribute to the literature with empirical findings about
relationship between burnout, stress and supervisory support especially in Turkish
Airlines Companies.
Keywords: Burnout, Stress, Supervisory support, Professional Position.

77

�</text>
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            <name>Extent</name>
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                <text>1513</text>
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          <element elementId="50">
            <name>Title</name>
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                <text>Could burnout be a reason behind airlines accident? An  Empirical Study in Turkish Airlines Companies</text>
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          <element elementId="96">
            <name>Author</name>
            <description>Author</description>
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              <elementText elementTextId="13522">
                <text>MENGENECI, Cengiz
YURUR, Senay
GUNDUZ TOPCU, Omur</text>
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          <element elementId="94">
            <name>Abstract</name>
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              <elementText elementTextId="13523">
                <text>Competitive advantage is highly important factor in all sectors. It would be said that  having and sustaining competitive advantage in airlines companies depend on  safety of flight and quality of services in flight and on the ground. Pilots and flight  attendants, in good mental, psychological and physical health give passengers  guaranty of safe flight and also high quality of services.  On the other hand, research results show that % 60 to % 80 of aircraft accidents  happen due to human factor. Researchers try to figure out where human factor  makes mistakes. Stress and fatigue were defined one of the reason behind human  mistakes and aircraft accidents.  According to literature, Burnout syndrome might cause companies workers to have  negative, callous and dehumanized responses to their customer, increase turnover  intention, high stress, job dissatisfaction and decrease the quality of services. This  syndrome might be the reason that cockpit and cabin crew live and suffer from  stress and fatigue, cause for accident and low quality service in airlines companies.  In this study aims to figure out burnout relationship with stress and supervisory  support and how much burnout differ according to professional position difference  in cockpit and the cabin of the aircraft. To collect data, Peeters, Buunk ve  Schaufeli’s (1995) supervisory support survey, House and Rizzo-(1972) stress survey  and Maslach burnout inventory survey will be used. Surveys will be delivered to  Turkish Airlines Companies. Data will be collected from pilot, copilot and flight  attendants. To analysis survey data, correlation and regression analysis will be  used. According to the hypothesis developed, the relationships between burnout,  stress and supervisory support will be analyzed and findings will be reported.  This study will contribute to the literature with empirical findings about  relationship between burnout, stress and supervisory support especially in Turkish  Airlines Companies.  Keywords: Burnout, Stress, Supervisory support, Professional Position.</text>
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                <text>International Burch University</text>
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                <text>2013-05-10</text>
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PeerReviewed</text>
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                <text>ISSN 2303-4564     </text>
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