The 5th Regional Development and Governance Symposium Begins During the first day's program of the fifth event of TEPAV's Regional Development and Governance Symposium series, the regional development dimension of the industrial policy and regional and sector-based incentive systems were discussed
ANKARA - The 5th Regional Development and Governance Symposium organized by TEPAV in cooperation with the Middle East Technical University (METU) Unit for Urban and Regional Research started. The symposium, with the theme "Governance of Industrial Policy," gathered local and central practitioners, national and international academia and private sector representatives.
Sessions on Thursday, 27 January 2011, mainly focused on the current state of regional development agencies, the regional development dimension of the recently issued industrial strategy document, the assessment of the earlier incentive system and the regional and sectoral incentives that had been in effect for almost eighteen months.
Speaking at the opening of the meeting, TEPAV Director Prof. Güven Sak said that Turkey was at the heart of experience with respect to regional development and that the experience to be extended through the regional development agencies was revolutionary. He said, "We do not know exactly how to use these, either. Some argue that it is a method of distributing funds with populist motivations on the eve of the elections, but I do not think so. The excitement across regional development agencies raise hopes in me that the process will progress in the right direction. We will learn by doing." Stressing that development agencies currently are preparing regional plans, Sak stated that the agencies must be evaluated individually in their specific regional contexts as well as in the context of their relations with other agencies. He argued that chambers of industry and commerce must project and support regional development agencies.
In the discussion session, Sak stated that he did not agree with the argument that the industrial strategy lacked a regional development component and said it was promising that the horizontal areas involved a regional development perspective.
Moderating the opening session with the theme "Industrial Policy and Regional Development," Prof. Ayda Eraydın of Middle East Technical University said that although efforts to enable regional development, reduce regional disparities and create dynamism in the least developed regions had a considerable history, there remained problems that needed to be resolved despite the plans and programmes launched so far.
Caution is needed about the politicization of the process
World Bank Senior Economist Thomas Farole drew attention to some points that needed to be taken into account in the governance of the industrial policy. Stating that although it was important to identify the sectors on which to concentrate, there was no such thing as "the best sector." He recommended involving many sectors in the process and making classifications. Transparent and democratic criteria for assistance to sectors and regions, and independent mechanisms for monitoring and evaluation of the assistance were necessary. He also warned that regional policies and industrial policies might gain a political content from time to time. Pointing out that the European Union (EU) was going through a reformation process with the Barca Report, he said that the Union had set key elements in this context including multi-level governance, local coalitions and democracy, and promoting experimentalism and mobilizing local actors.
Local ideas must be turned into national policies
Professor Michael Taylor of Birmingham University shared the experiences of the United Kingdom and Australia and focused on the importance of creating policies on the basis of local ideas. Referring to the challenges in the political process in the shift from theory to practice, he said that in the process local debates and forums proved more important than any consultancy to be received. He advised the provision of service and capital assistance in doing business in local areas and the improvement of relationships with business forums. He added that the clustering policy in the UK efforts with respect to what had been completed recently had proved fruitful also for the regional policy.
In the afternoon session, Prof. Metin Durgut of METU made an analysis of complex structures and an assessment of developing countries. Stating that these countries ensured growth via diversification, that public policies remained an important tool for economic development and that the improvement of technological and innovative capacity was still the top-priority item on the policy agenda, Durgut said that the development of local skills and establishment of regional systems for regional development were of critical importance.
Asst. Prof. Dr. Nuri Yavan of Ankara University argued that in the 1998-2008 period, 60 percent of investments had been wasted by 20-25 percent in the "investment dump." Explaining that 80 percent of the incentives were offered in the Marmara region, he stressed that the target to extend incentives to the least developed regions had not been fulfilled. He also commented on the failures of the new incentive system put into effect in 2009. He criticized, for instance, how despite its focus on support for sector-level clustering, the incentives for some sectors had been directed not at the provinces where clustering was observed the most intensely but at the country-level system. Drawing attention to the risk that political concerns might intervene in the process, Yavan raised his concerns about the risk that the sectors recently involved in the system would become targets for such concerns. He went on to stress that it was necessary to establish a monitoring mechanism for incentives.
Development agencies must became a part of the policy setting process
Feridun Bilgin, Deputy Undersecretary of the Undersecretariat of the Treasury, stated that the drawbacks of the new system were being overcome in the process. He declared that negotiations were underway to define a fifth region. Referring to the criticisms of the use of the socioeconomic development index data for 2001 as criteria for regions to qualify for incentives, Bilgin said that it was the latest data at hand and that a study was being conducted at that time to overcome this problem. He added that within the Undersecretariat, a unit that would monitor the institutions extending incentives and the outputs of the incentive schemes had been formed. He said that the system's being region-based, a feature of the system commonly subjected to criticisms, was a requirement for the EU harmonization process. There were demands at the district level, but it was not possible to direct investors to the east of central Anatolia. He went on to say that in the coming period regional development agencies would take part in the policy-setting processes as well as in the implementation process.
Efforts of localization under the illusion of central supervision
Making a general assessment at the end of Thursday's sessions, Prof. Dr. İlhan Tekeli of METU said that promoting decentralization for regional development, on the one hand, and asking for central supervision of the structure, on the other, was an "illusion." He pointed at the efforts to row against the tide of unequal growth and questioned whether more moderate targets could be set that would not be condemned to fail. It was not possible to establish a perfect incentive system, but the new system was superior to the older one. Emphasizing that the clustering issue had become a myth, Tekeli said that because clusters failed under certain conditions, the debates on the issue must concentrate on what type of clusters must be established.
