Average growth rate in 2003-1010 period is the same with that in the previous 42 years

Let us assume that Turkey will achieve an average 6.5 percent growth this year. In that case, average growth rate over the five decades between 1960 and 2010 would be 4.4 percent. If we start the interval at 1950, average growth rate increases to 4.5 percent.

This is not bad when considered alone. However, this average growth rate was insufficient to close the income gap between Turkey and the developed countries. For instance level of per capita income in comparison with the USA is the almost same with that in 1969. In terms of closing the income gap between Turkey and developed countries the attained 4.5 percent growth rate proves weak. Of course we can always say "Why care the others; we should be focusing on our own performance."

Then, we have to go back and check the unemployment figures. Unfortunately, Turkey suffers from high unemployment rate. Comparative figures are present as of 2005.  The rate (net of seasonality), which stood around 19 percent until the crisis, now reached 12 percent. This is a quite high rate; but it is worse than it seems for at least two reasons.

First, if you ignore the agricultural employment, which in fact does not have a considerable contribution to agricultural production and thus fails to improve the income level of the employed, the problem appears to be severer than it seems. Second, individuals regarded as unemployed in the statistics are those who are within the labor force and looking for a job. However, the vast majority of women do not participate in the labor force which understates the unemployment rate.

Thus, 4.5 average growth rate is not sufficient to reduce unemployment in Turkey, either.  Of course growth rate is not the only determinant of unemployment rate. Level of productivity, for instance, is also critical. You can achieve a particular level of production with higher employment rate. But this reduces the rate of productivity, which would not be much desirable for a country seeking to break in the first league.

The AKP is the ruling party since 2003. So, is the average growth rate over the 2003-2010 period different than that over 1950-2002 or 1960-2002? Average growth rate over the 2003-2010 is 4.4 percent while the average over 1960-2002 and 1950-2002 periods were 4.4 percent and 4.7 percent, respectively.

Then, average growth rate over the 2003-1010 period stands at the same level with that in the previous 42 years and slightly below that in the previous 52 years. One might argue that the former coincided with the global crisis; but such exogenous crises were witnessed also in the previous periods. For instance, in the 1970-1980 period were to devastating oil crisis. And in the 1997 and 1998 were Asian and Russian crises.

So the moral of the story is, the status quo of the 2003-2010 period is the same with that before the 2003. Now, new things must be said and put into practice.

This commentary was published in Radikal daily on 18.10.2010