Turkey and Iran: An Analysis Based on Mutual Trade and Defense Spending
Turkey and Iran: An Analysis Based on Mutual Trade and Defense Spending

Summary/Abstract: Turkey and Iran are two neighbors who are competing for being a regional power in the Middle East. Defense spending has an important status for both countries, in terms of both the state of continuous turmoil in the countries of the region and as an indicator of national power. On the other hand, there is an increasing volume of trade between two countries as well, in parallel to the trend of improvement in diplomatic relations within the last decade. In this study, mutual trade relations between Turkey and Iran and effects of defense spending on the economies of both countries are discussed theoretically. Improvement of economic relations between both countries in 2000s resulted in a situation of mutual existence rather than regional competition. Further improvement and diversification of economic relations may have positive outcomes for both countries. The strengthening economic relations may change the perception of threat by two countries against each other and may allow utilization of some resources reserved for defense spending in more productive areas.

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