Ussal Sahbaz

Operator at the policy-business edge. Middle powers, corridors, tech regulation — for fragmented markets. Ussal Consulting & MnP Istanbul. Harvard MPA-ID.

[Ussal Sahbaz @ussalEN]

BYD’s Türkiye decision shows two shifts in industrial competition.

(1) Eligibility: incentives, land and logistics are not enough if the factory sits outside the regulatory perimeter of the market it wants to serve. In this case that market is the EU and BYD preferred EU-member Hungary

(2) Technology: EVs create less local supplier depth than old automotive production because value is concentrated in batteries, chips, software and power electronics.

Middle-income middle powers have to beyond the classical manufacturing-based development model.

I discuss this in my @turkiyetodaycom column 👇(1/2)

[Ussal Sahbaz @ussalEN]

@ragipsoylu In particular, her name is telling

[Ussal Sahbaz @ussalEN]

A good dictator/monarch still performs better than an average democracy. This piece does not refute this fact. The odds of finding a good dictator are small, however.

[Roger K. Horn @EMInvestors]

Francis Fukuyama recently shared a compelling piece titled “The Myth of Authoritarian Efficiency” by political scientists Jørgen Møller and Svend-Erik Skaaning (Aarhus University / V-Dem project).
The article dismantles the popular notion that authoritarian regimes—particularly China—are simply better at “getting things done.” Drawing on historical data and comparative evidence, the authors argue that democracies consistently outperform autocracies over the long term across critical domains:
• Military effectiveness: Democracies have won more than 80% of wars since 1815. Greater legitimacy enables citizens to make greater sacrifices, and democratic alliances prove more durable.
• Economic performance: While autocracies can drive catch-up growth to middle-income levels, they struggle to transition to innovation-driven, knowledge economies that require rule of law, intellectual property protection, and open debate. High-quality democracies show a modest but robust long-run growth advantage.
• Avoiding catastrophe: Autocracies periodically produce large-scale man-made disasters (Mao’s Great Leap Forward, Soviet collectivization). Institutional checks and public scrutiny in democracies make comparable failures rare.
• Crisis management & environment: Transparency, independent science, and accountability lead to better outcomes on pandemics, climate policy, and environmental indicators. China’s zero-COVID flip-flop and overstated economic statistics illustrate the risks of centralized, unaccountable decision-making.
The authors acknowledge democracies can be slow and messy, but emphasize that self-correction mechanisms ultimately make them more resilient and effective than systems that concentrate power without feedback loops.
Francis Fukuyama, author of the landmark book The End of History and the Last Man, continues to spark important conversations about the enduring strengths of liberal democracy in an era of renewed authoritarian confidence.
Full article (highly recommended):
https://t.co/rdLYptPLnY
What’s your take—do you see evidence of this “myth” playing out in emerging markets or great-power competition today?
#Democracy #Geopolitics #China #EmergingMarkets #InternationalRelations #PoliticalEconomy

[Ussal Sahbaz @ussalEN]

Saudi-Turkey railway could not become an alternative to sea routes. Sea transport is 10 times cheaper and will always handle a larger capacity.

However these modes are complementary to each other.

Land corridors actually create is an alternative capacity for times that the sea routes do not function and for high-value cargo that is worth being carried through the land.

We have seen closures of the sea routes multiple times in the last few years — not only due to the recent Hormuz blockade, but also due to accidents in Suez, piracy in the Arabian Sea, etc. So these routes provide a safety net. They complement the sea routes, not competing with them.

It would be really interesting if these corridors could catalyze Saudi-Turkish joint investments in manufacturing in Syria, a country that has a long tradition of entrepreneurship but has recently suffered from conflicts.

If this happens, he said, the corridors will go beyond infrastructure investments and contribute to the regional prosperity.

reporting by @sabena_siddiqi

[Sabena Siddiqi @sabena_siddiqi]

My latest for The New Arab

"The rail corridor from Oman to Istanbul will revive sections of the Hejaz Railway, but can it help replace vulnerable waterways like the Strait of Hormuz?"

With comments by @ussalEN @zgizemozpinar @hasanunal1920

https://t.co/goQiuhOB5W

[Ussal Sahbaz @ussalEN]

Why did BYD choose Hungary over Türkiye?

My column in Türkiye Today argues this is less about Türkiye’s domestic debate, and more about the changing industrial paradigm. (2/2)

https://t.co/kcuwhj0d92

[Ussal Sahbaz @ussalEN]

Why did BYD choose Hungary over Türkiye?

My column in Türkiye Today argues this is less about Türkiye’s domestic debate, and more about the changing industrial paradigm. (2/2)

https://t.co/kcuwhj0d92

[Türkiye Today @turkiyetodaycom]

Why BYD's decision to withdraw is bigger than Türkiye

✍️Ussal Sahbaz (@ussal)

https://t.co/f13TUg2MwQ

[Ussal Sahbaz @ussalEN]

BYD’s Türkiye decision shows two shifts in industrial competition.

(1) Eligibility: incentives, land and logistics are not enough if the factory sits outside the regulatory perimeter of the market it wants to serve. In this case that market is the EU and BYD preferred EU-member Hungary

(2) Technology: EVs create less local supplier depth than old automotive production because value is concentrated in batteries, chips, software and power electronics.

Middle-income middle powers have to beyond the classical manufacturing-based development model.

I discuss this in my @turkiyetodaycom column 👇(1/2)

[Ussal Sahbaz @ussalEN]

@Afinetheorem Is it possible to read the actual oped? It is a very timely discussion for all middle powers.

[Ussal Sahbaz @ussalEN]

@KarangeMan @ussal Agree

[Ussal Sahbaz @ussalEN]

As a government affairs professional, I think some of the Anthropic–US government commentary is over-philosophizing the incident.

Yes, there is a bigger question here: whether frontier AI models are becoming sanctions infrastructure, like SWIFT for finance.

But the more immediate story may be simpler: escalation failure.

Per Politico reporting, US Treasury Secretary Scott Bessent tried to reach Dario Amodei on Friday morning. Amodei was said to be at a wellness retreat. When he responded by 1 pm, he delegated the issue.

Either way, Washington apparently did not hear what it wanted to hear: urgency, ownership, and control.

That is when the issue seems to have moved from “fix the guardrails” to “shut access down.”

The narrower lesson may be more useful than the grand theory: frontier AI companies are no longer normal tech vendors. When the state sees a model as dual-use infrastructure, CEO responsiveness becomes part of the control regime.

If this is resolved this week, it was a tactical escalation.

If not, then we can start talking seriously about extraterritorial export controls and sovereign AI.

[Ussal Sahbaz @ussalEN]

@simonmontefiore Already ordered a few weeks ago... But the speed of arrival is also at the Middle East pace...😎🫢

[Ussal Sahbaz @ussalEN]

@YakupYakuppur very bad communications both with the government and the general public, for sure.

[Ussal Sahbaz @ussalEN]

BYD had promised to invest in Turkey. Now, after moving ahead with its Hungary plant, it has reportedly cancelled the Turkey investment.

Many in Turkey will look for someone to blame. That misses the real story.

The BYD question is not mainly bureaucratic. It is geopolitical.

Global production is being reorganized. Europe wants stronger “Made in Europe” value chains, but still does not know how to manage China. It distrusts the US, lacks unity among 27 members, and is paying the price of having outsourced security to America, energy to Russia and manufacturing to China.

Turkey’s old assumption was simple: through the Customs Union, we were inside Europe’s industrial perimeter.

The BYD episode shows the limit of that assumption.

Hungary was not only a factory location. It was an EU member state whose position in Brussels could be politically useful for China.

This is the lesson: in the new industrial order, production capacity is not enough. Market access, regulatory eligibility and geopolitical leverage decide where factories go.

See my recent @turkiyetodaycom piece on Turkey and Made in Europe, and an excellent analysis on BYD episode by @SinanTavsan in the next two tweets (1/3)

[Ussal Sahbaz @ussalEN]

@DiscoSapiens I don't know to what extent those sources are reliable. All I saw was from anonymous social media accounts.

That may also be the case, though — knowing Turkish public institutions a bit —I find it unlikely.

[Ussal Sahbaz @ussalEN]

One more dimension in the BYD–Turkey saga: this is not only a Turkey problem. It is a middle-power, middle-income problem.

Turkey offered BYD generous tax and customs incentives. BYD still chose Hungary.

Why?

Hungary offers EU market access. Turkey offers incentives.

As value chains consolidate around bloc rules — EU origin, US domestic content / tariffs, China’s supply-chain lock-in — incentives become a weaker substitute for access.

At some point, incentives become a race to the bottom: Turkey vs Morocco, tax rate vs tax rate. You can go down to 0%. Then what?

The World Bank’s 2024 WDR captures the trap: the countries that climbed from middle-income to high-income since the 1990s did so through exceptional external anchors, most of them through EU integration (and some discovered oil!).

For middle-income middle powers, the hard questions are now:
- Which bloc-defined markets can our firms credibly access?
- How do we join them?
- And what happens to our “policy autonomy” when access becomes the real subsidy?

[Ussal Sahbaz @ussalEN]

BYD had promised to invest in Turkey. Now, after moving ahead with its Hungary plant, it has reportedly cancelled the Turkey investment.

Many in Turkey will look for someone to blame. That misses the real story.

The BYD question is not mainly bureaucratic. It is geopolitical.

Global production is being reorganized. Europe wants stronger “Made in Europe” value chains, but still does not know how to manage China. It distrusts the US, lacks unity among 27 members, and is paying the price of having outsourced security to America, energy to Russia and manufacturing to China.

Turkey’s old assumption was simple: through the Customs Union, we were inside Europe’s industrial perimeter.

The BYD episode shows the limit of that assumption.

Hungary was not only a factory location. It was an EU member state whose position in Brussels could be politically useful for China.

This is the lesson: in the new industrial order, production capacity is not enough. Market access, regulatory eligibility and geopolitical leverage decide where factories go.

See my recent @turkiyetodaycom piece on Turkey and Made in Europe, and an excellent analysis on BYD episode by @SinanTavsan in the next two tweets (1/3)

[Hakan Köseoğlu @Hakanlara141963]

✍️

[Ussal Sahbaz @ussalEN]

@tito Maybe :)

[Ussal Sahbaz @ussalEN]

If you go to Brussels, you will see that many professional lobbysists are Italians or Greeks.

Yet Italian companies are 10th in lobbying spent in Brussels. Greece is not even on Politico's top spenders list.

These countries are probably so corrupt that their companies are not used to corporate lobbying.

[Ussal Sahbaz @ussalEN]

https://t.co/Dow5fvj3Io (3/3)

[Ussal Sahbaz @ussalEN]

https://t.co/tnbpv0JBRu (2/3)

[Ussal Sahbaz @ussalEN]

It is not possible to know what was discussed in the closed-door negotiations. You may have a point.

However, I think the underlying dynamic was stronger. Basically, BYD chose Hungary over Turkey, because:

(1) There is no risk Hungary can be excluded from Made in Europe.

(2) China can manipulate Hungary in the EU decision-making systems, so there is an important side-value. Turkey is not in those mechanisms.

These are all valid strategies. Investments, whether by Chinese or Americans, are always geopolitical, these days.