You cannot just build a bridge in the name of service procurement. I am sure somebody is calculating the yield of the project carried out with the people’s money.

The third Bosporus bridge is being built with no consideration about its use. I think I saw the construction site from the sky when I was landing in Istanbul. Trees had been cut. The decision had been made, I am guessing according to some assessment, but we don’t know what. And I am extremely curious about that. For instance, what is the use of the third bridge for the innovation process? How will it make Istanbul a more livable and pedestrian-friendly city? How will it contribute to Turkey’s growth prospects? I am not arguing that all projects should have an economic return or make positive contributions to growth. I say that just because as an economist I can’t think of another example. I want to believe that the bridge is not being built out of spite, that “It will be done because I said so!” is not the motivation here. There has to be a purpose in any project, right? Like, building a facility to meet the gap in electricity production. On the occasion of global entrepreneurship week, I am asking if the third bridge will make any contribution to the innovativeness of Turkey. You cannot just build a bridge in the name of service procurement. I am sure somebody is calculating the yield of the project carried out with the people’s money. I haven’t seen any cost-benefit analysis; perhaps I missed out on that. But if it’s not done yet, someone should do such an analysis.

Not long ago, in late September, New York’s emergence as a new innovation center was discussed at the Bloomberg Technology Summit in the NYC. New York is the biggest city in the US, like Istanbul in Turkey. The agenda of the Summit was NYC’s rise as an innovation center based on the digitalization of the city’s media industry. The technical infrastructure and the internet connection have been improved, Brooklyn has become a new tech center, and many startups have been founded. As a result, from 2007 to 2012 employment in New York increased by 4 percent, compared to the 3 percent decline across the US. What is more, the new jobs were in high-value added and innovative sectors: employment declined by 6.9 percent in peripheral NYC and increased by 11 percent downtown.

Why is this analysis so interesting to me? I guess because I have not seen a similar one for Turkey. The city administration there shares the outcomes and returns of public investments with the public. This part seems strange to me, as it would to anyone who lives in Turkey. We do not get to hear any statements on the expected outcomes or benefits of an urban project. The third bridge or the Channel Istanbul are not exceptions.

So, as I don’t hear statements that give account of public investments, all I have in mind is the same old story: the current account deficit is the key challenge facing Turkey, and it is the domestic savings deficit that feeds the current deficit. In other words, our investments are larger than our savings, whereas 50 percent of the savings deficit stems from the public budget. The public sector does not save. What Turkey needs is discipline on public spending, not fiscal discipline. The public budget accounts for 17 percent of the GDP, whereas the share of the public sector in the savings gap is as high as 50 percent. The state has to render account on each penny it spends. Otherwisse, a 7.5 percent current account deficit with 3 percent GDP growth is a bitter combination. Tough tasks require cooperation.

That’s why I am wondering how the third bridge will contribute to Turkey’s innovativeness. I am guessing it will contribute somehow, it being a gigantic investment. We can at least start talking about its potential benefits.

This commentary was published in Radikal daily on 10.12.2013