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THE MOTHER OF ALL PROBLEMS
Hurriyet Daily News, Turkey
Oct 28 2011
Are you following the organizational mess surrounding the earthquake
in Van? Those coordination failures highlight Turkey's underlying
problems. What, really, is the mother of all problems in Turkey? The
Kurdish issue comes to mind, doesn't it? Or the Armenian question,
perhaps? I don't think that these 19th century leftovers will
challenge Turkey in the first half of the 21st century. The challenge
is the economy. Let me explain: The challenge lies in the country's
institutional capacity in preparing the grounds for a new beginning.
Turkey will either rise to be a high-income country or get trapped in
its current middle-income state. But all reforms that can contribute
to the former outcome have been postponed these past 10 years. Not
ideal for a new beginning.
We managed to change the structure of our economy in the past
30-something years. Turkey has transformed itself from an agrarian
society into a mid-tech industrial economy. The customs union agreement
and relative economic and political stability have contributed to the
increase in urbanization rate to its current 75 percent level. But
Turkey's transformation failed to enrich and empower the population
of the country as a whole. We cannot solve our 19th century problems
without empowering the population.
Take a look at the figures of the 20 largest economies in the world.
Turkey was 25th in 1980. We rank 17th today, right above Indonesia, the
second Muslim-majority country on the list. The political leadership
is now aiming to become the 10th largest in 2023, which is easier
said than done. Turkey enjoys the cushion of a large domestic economy
in these times of crisis, but qualitative indicators are pointing
towards the need for structural reforms.
Currently, output per worker in Turkey is about a third of that
in developed countries. It is definitely five times larger when
compared to China and India, but we still need a productivity
boost. Up until now, productivity growth has largely been coming
from internal migrations that speed up the process of reallocation of
resources from low to high productivity activities, more specifically
from agriculture to services and industry. It is time to focus on
intra-sector productivity. And that is the hard part. Rapid growth
is not possible from here on without structural reform.
Looking at age, the young population is out there with an average
age of 28.5. That's younger than China's average of 35.5. Average
schooling is around six years in Turkey, one the lowest in the list of
the first 20 largest economies of the world. That means our population
is young but uneducated. If you compare English proficiency results on
that list, Turkey definitely ranks one of the worst. We can't speak
English, which means we're not connected to the world. We also rank
dead bottom in the women's labor force participation ratio. The ratio
in Turkey is 24.5 percent, far behind Indonesia's 52 percent.
Young, uneducated, unequal and unconnected: That dismal list spells
out Turkey's challenge in the 21st century. Is rapid productivity
increase in the face of severe structural limitations doable? Yes,
but it requires our immediate attention. The problem is that our
decision makers are preoccupied with 19th century problems. If they
would focus on the real challenges, perhaps they would understand
that the problems of old are, in reality, non-issues.
Hurriyet Daily News, Turkey
Oct 28 2011
Are you following the organizational mess surrounding the earthquake
in Van? Those coordination failures highlight Turkey's underlying
problems. What, really, is the mother of all problems in Turkey? The
Kurdish issue comes to mind, doesn't it? Or the Armenian question,
perhaps? I don't think that these 19th century leftovers will
challenge Turkey in the first half of the 21st century. The challenge
is the economy. Let me explain: The challenge lies in the country's
institutional capacity in preparing the grounds for a new beginning.
Turkey will either rise to be a high-income country or get trapped in
its current middle-income state. But all reforms that can contribute
to the former outcome have been postponed these past 10 years. Not
ideal for a new beginning.
We managed to change the structure of our economy in the past
30-something years. Turkey has transformed itself from an agrarian
society into a mid-tech industrial economy. The customs union agreement
and relative economic and political stability have contributed to the
increase in urbanization rate to its current 75 percent level. But
Turkey's transformation failed to enrich and empower the population
of the country as a whole. We cannot solve our 19th century problems
without empowering the population.
Take a look at the figures of the 20 largest economies in the world.
Turkey was 25th in 1980. We rank 17th today, right above Indonesia, the
second Muslim-majority country on the list. The political leadership
is now aiming to become the 10th largest in 2023, which is easier
said than done. Turkey enjoys the cushion of a large domestic economy
in these times of crisis, but qualitative indicators are pointing
towards the need for structural reforms.
Currently, output per worker in Turkey is about a third of that
in developed countries. It is definitely five times larger when
compared to China and India, but we still need a productivity
boost. Up until now, productivity growth has largely been coming
from internal migrations that speed up the process of reallocation of
resources from low to high productivity activities, more specifically
from agriculture to services and industry. It is time to focus on
intra-sector productivity. And that is the hard part. Rapid growth
is not possible from here on without structural reform.
Looking at age, the young population is out there with an average
age of 28.5. That's younger than China's average of 35.5. Average
schooling is around six years in Turkey, one the lowest in the list of
the first 20 largest economies of the world. That means our population
is young but uneducated. If you compare English proficiency results on
that list, Turkey definitely ranks one of the worst. We can't speak
English, which means we're not connected to the world. We also rank
dead bottom in the women's labor force participation ratio. The ratio
in Turkey is 24.5 percent, far behind Indonesia's 52 percent.
Young, uneducated, unequal and unconnected: That dismal list spells
out Turkey's challenge in the 21st century. Is rapid productivity
increase in the face of severe structural limitations doable? Yes,
but it requires our immediate attention. The problem is that our
decision makers are preoccupied with 19th century problems. If they
would focus on the real challenges, perhaps they would understand
that the problems of old are, in reality, non-issues.