This is Turkey. This is why the Gao Kao can offer the university entrance test to 9.5 million students while the OSYM fails to offer sound services to only 1.5 million.

World economies can be grouped in two categories: undistinguished economies that have the means to produce only ordinary products and economies with high potential that can produce unique products. The more undistinguished an economy is, the lower its per capita income. Turkey's economy has become increasingly undistinguished as its export markets have diversified.  But this has not been the case with China. Not only  did China's Gao Kao, the National Higher Education Entrance Examination, not mess up the university entrance examinations as the OSYM, the Student Selection and Placement Center, did in Turkey, but also China improves the quality of its production basket with each day. What does China have that Turkey does not? If you are curious, please read on.

The foreign trade basket of a country reflects the production capacity of that country. For instance, you can discuss the education system of a country by reviewing its export basket. Now let's take a look at the figure below. It shows the changes in the level of sophistication of the export basket of two countries, Turkey and China. The figure shows to what degree the export baskets of Turkey and China have converged with those of developed countries. If the curve tends upwards, the export baskets of Turkey and China converge with those of developed countries. What does this imply? It implies, for instance, that the type of goods Turkey exports resembles the type of goods developed countries export. This is a good thing, as it implies that your per capita income will converge with that of developed countries.

Figure: Export Sophistication Index (EXPY), Turkey, India and China (1995-2009)

Source: United Nations COMTRADE and TEPAV calculations

This is exactly where the problem comes to light. With the global crisis of 2008, the export baskets of China and India continued to converge with those of developed countries whereas that of Turkey tended to diverge from those of developed countries. This is definitely bad. With the eruption of the crisis, Turkey did not find what it expected in European markets and so directed its efforts to eastern markets. While exports diversified, the capital goods basket diverged from those of developed countries and became increasingly undistinguished.

But why is Turkey alone? To begin with, the issue is related closely to solid integration into the global production chains. China is an inseparable part of the iPhone production process that has been growing rapidly along with the intensification of the global crisis. Exports and the production structure of China have improved the more they have integrated into the western markets. I think among the strategies being discussed in Turkey nowadays the most humorous one is about the "African opening." If the African opening refers to prospering via exporting to African countries, it can be nothing but a pleasant joke. The second point follows from the first one. The European market is a must for Turkey. With this perspective, industrialization is contagious: it jumps from one border to another. At the heart of Turkey's current industrial production capacity lies its strong ties to Europe.

The third point: India and Korea's performance are associated closely with the industrial policies they have implemented. What is the issue here? The issue is whether or not you have skillful administrators who think for more than fifteen minutes about how to make the country prosper. They have this, we do not. This is Turkey; we suffer from a skills gap.

This is why the Gao Kao can offer the university entrance test to 9.5 million students while the OSYM fails to offer sound services to only 1.5 million.

This commentary was published in Radikal daily on 12.04.2011