Looking at Turkey's main economic performance indicators in comparison with those of other emerging markets, Referans' Hasan Ersel has uncovered a report card of "satisfactory" at best for Turkey. Despite an intake of foreign investment and a continued positive outlook with the economic work it is doing as part of its IMF package, Turkey has much room for improvement. But don't take our word for it. See Ersel's analysis below for the full picture.

When we measure Turkey's report card against those of other emerging economies, there is much room for improvement. Aside from an increase in exports, Turkey has not been able to surpass the 'class average' of emerging markets in any sector. In terms of foreign debt, it is average. On the inflation, current account deficit and growth rate counts, it has failed.

What has changed in the Turkish economy during the Justice and Development Party (AKP) administration period since 2002? This question can be answered in many different ways. My goal is to take a look at how the economic development in Turkey during that [AKP] period differentiated us from global inclinations.

If economic development in Turkey is similar to that of global markets and we did not make a big leap, then the political party [AKP] that promises ambitious economic goals should explain further on the program that it is planning to implement in order to obtain the future results it promises.

But the issue does not end there. If Turkey's European Union (EU) negotiation period will continue then it has to implement a very comprehensive and difficult reform program. The political party [AKP], which has not so far succeeded in offering such a program, has to explain how Turkey is going to survive in a world where globalization is further baring its teeth.

Growth

According to the "World Economic Outlook, April 2007" report of the International Monetary Fund (IMF), Turkey's growth rate between 2003 and 2006 has been 6.0 percent. That may be a relatively high growth rate according to our own measures, but during the same period the global economy also grew an average of 4.9 percent. Emerging economies had a growth rate of 7.5 percent.

Exports, Turkey's silver-ish lining

During the same period, a double-digit increase in Turkey's exports was our moment of pride. Turkish export boosted by 24.3 percent as global trade increased an average of 8.2 percent. The increase in Turkey's exports is more than double the average export rate in emerging countries. However, that said, the increase in the growth rate has been declining for the past two years, compared to the previous years.

Inflation

We have been very proud of having lowered the inflation rate. Compared to our prior inflation levels, it is obvious that we have managed to obtain some very impressive results related to lowering of our inflation, but compared to the emerging economies, things do not look so bright. Inflation all around the world has dropped. We have only took part of it. Looking at the data of the "emerging markets" group as of March 2007, there are only three countries with double-digit inflation rates, namely Venezuela with 18.5 percent, Egypt with 12.8 and Turkey with 10.9 percent.

Current account balance

We have no claims related to this topic. We don't even use the term "Current account balance." We use "Current account deficit." The gross domestic product (GDP) rate of our current account deficit has been rising during the 2002 and 2004 period. Meanwhile, the situation is absolutely the opposite in emerging markets. Their "current account surplus" has been increasing.

Foreign debt

Foreign debt of Turkey did not increase during the 2003 and 2005 period. Turkey dropped the rate of foreign debt compared to Gross National Product (GNP) by 6 percent. What happened in the emerging markets? They dropped the rate of foreign debt compared to GNP about 10 percent. Meaning we [Turkey] have not been able to meet the global trend in this area either.

Bu köşe yazısı 10.05.2007 tarihinde Referans Gazetesi'nde yayınlanmıştır.