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    Why Turkey is no Brazil

    Güven Sak, PhD14 May 2016 - Okunma Sayısı: 1671

    Political tensions are high, both in Brazil and Turkey. Dilma Rousseff, Brazil’s President, was impeached this week. Yet Turkey is no Brazil. Let me explain.

    When Luiz Inácio Lula da Silva was the President of Brazil, I used to make comparisons between him and Erdoğan. Why? First, they both came to power in 2003. Erdoğan became the Prime Minister and Lula the President. Second, they both come from poor backgrounds, having journeyed from the so-called “periphery” to the “center”. Third, both Brazil and Turkey have become more inclusive countries under their leadership.

    That was then, of course. Lula left in 2010, after completing two terms, and tipped Rousseff to take his place. Erdoğan, on the other hand, powered through, becoming Turkey’s first popularly elected President in 2014. I see political crisis in both Brazil and Turkey, but in different ways. Turkey is no Brazil today. Why?

    It’s the economy that’s leading the political crisis in Brazil. Not in Turkey yet. Turkish economy still looks “surprisingly resilient,” as a foreign observer said to me the other day. But is it? Let’s look at the numbers. Let’s take 2003 – 2010, the timeframe of Lula’s presidency. China grew at around 11 percent at that time. In the 2010 – 2015 Rousseff period, China’s rate of growth declined by around 30 percent. That had a differential impact on Brazil and Turkey. In Brazil, average growth declined by around 75 percent, down to around 1 percent growth per year. During the same time in Turkey, we observe that average growth declined by around 12 percent. Brazil’s growth grinds to a halt while Turkey only slows down to 4.4 percent growth per year.

    avg growth rates china brazil turkey.520px

    So Brazil appears to be more directly hit by China’s slowdown. Why? It’s the structure of Brazilian exports. One third of all Brazilian exports are primary products. With China’s slowdown, Brazil got a direct hit, as exports and export prices started declining. In Turkey’s case, the hit is more indirect. If you ask me, that is an important reason for the surprising resilience of Turkish economy.

    So what goes around comes around. Brazil and Turkey rode the Chinese wave to grow and become more inclusive. Now that period is over. It is harder for politicians to deliver on their promises this time around. That’s the tragedy of Rousseff in Brazil, if you ask me. The political unrest led to her 6-month impeachment in May 12.

    Prime Minister Davutoğlu of Turkey also stepped down this May. There is a political crisis in Turkey, too. However, the culprit in Turkey is just the haphazard political decisions of the past. The “surprisingly resilient” economy is not a part of the equation yet.

    If anything, it’s the abundance of political tactics and the absence of a long term strategy that makes Turkey a crisis prone country, if you ask me. Still, amidst all the domestic, regional and global turmoil, Turkey grew at a rate of 4.4 percent between 2011 and 2015. Just imagine where we would be, if we stop shooting ourselves on the foot.

    This commentary was published in Hürriyet Daily News on 14.05.2016


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