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    Shining like a star

    Fatih Özatay, PhD04 October 2011 - Okunma Sayısı: 1099

    The gap between per capita income in developed countries and in Turkey did not narrow down despite the 4.8 percent average growth.

    In his inauguration speech for the new legislative year, President Abdullah Gül stated an important point: If Turkey grows by 10 percent each year continuously until 2023; per capita income will reach 80 percent that of the European Union by then.

    Let me recall some figures: average growth rate of Turkey was 4.8 percent between 1951 and 2010 and 3.9 percent between 2001 and 2010. The economy grew by 4.8 percent in average in the 2003-2010 period. If we assume that the growth in 2011 will be 7 percent, the average for the last five years (2007-2011) will stand at 3.2 percent. Please note that the pessimistic scenario of the IMF estimates Turkey’s growth at 2.5 percent in 2012 with the assumption that things will not get worse in Europe and the US will not face another recession. In short, average growth rate for the 2003-2012 period will be 3.5 percent at max even if the world does not get in deeper trouble and the growth performance outpaces the IMF’s estimations under the pessimistic scenario, that is, if the forecast of Ali Babacan that Turkey cannot achieve the long term growth average proves correct. Under these circumstances, the 2003-2012 growth average will not be so different than the 2003-2011 average. I obviously have a reason to talk about these numbers: Turkey “which shines like a star” has to double the growth performance of the last decade or the last five decades to achieve by 2023 the per capita income level pointed by President Gül.

    If “shining like a star” refers only to stability, I have nothing to say. Turkey made great effort to enable economic stability following the 2001 and good results were received eventually. Rest of the world has been dealing with high budget deficits and high public debt, none of which are a problem for Turkey currently.  Similarly, while the world is trying to figure out which banks are to bankrupt and how much capital must be transferred as a bailout, Turkey enjoys a solid banking sector. Risk perception is on the hike throughout the world; but this is not the case with Turkey. Given that the “rest of the world” refers not to developing but to developed countries, circles interested in astrology might believe that Turkey is “shining like a star”.

    Nevertheless, if “shining like a star” has to do with the level of welfare in a country being higher than other countries, Turkey is evidently not doing so. The point President Gül made puts this fact forth clearly. I want to stress one thing that is frequently highlighted in this column: The gap between per capita income in developed countries and in Turkey did not narrow down despite the 4.8 percent average growth. But this is not our fate. Some countries managed to close the income gap. If Turkey really wants to shine like a star, it has to turn its face to the earth from the sky.

    This commentary was published in Radikal daily on 04.10.2011