Download - Emre Deliveli
Emre Deliveli
Turkish ReformsAnd
Their Social Implications
April 2013
Outline
1. Summary of Turkish Reforms
2. And their social implications
Brief history of reforms in Turkey• 1920s: Reforms aimed at westernization
– (Secularism, civil law etc.)
• 1940s: Transition to democracy– (Multi-party politics)
• 1950s: NATO membership– (Western security alliance framework)
• 1980s: First generation economic reforms– (Price reforms, free trade)
• 2000s: EU reforms + completion of first generation reforms– (Improvement in democratic standards)– (Fiscal discipline, macroeconomic stability)How Mediterranean is Turkish Economy? Slide 3
New political elite, new
energy
Second generation reforms (institutions & skills) ?
Key dynamic: rapid urbanization (= main source of economic growth)
Urban population as a percentage of the total population in Turkey and EU countries, (%), 1960-2010
Source: World Bank, World Development Indicators
How Mediterranean is Turkish Economy?1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
20
30
40
50
60
70
80
European Union
Turkey
Slide 4
Summary of Turkish Reforms
1. The Ozal Years
The 1980 reforms to downgrade the import-substitution based development strategy in order toupgrade an export-led growth helped to catch a high growth platform for a couple of years but such ahigh level of re-structuring had its own drawbacks and financial liberalization policies created abanking crisis in 1983.
However, the recovery was fast and Turkey experienced strong growth for another decade.
Financial liberalization also brought new diseases to potential growth, such as dollarization.
International financial institutions, such as the International Monetary Fund (IMF), were familiar visitors in those years but this did not prevent another heavy banking crisis in 1994.
The 1990s are generally been accepted as lost years not only because of the 1998 earthquake but also because of the global financial spillover, such as the Russian and the Far-East crises. The decade ended with a deep economic crisis in 2001
Summary of Turkish Reforms
1. Dervis and Justice and Development Party (AKP)
Expansionary fiscal contraction
Inflation Targeting
Banking Reform
Expansionary fiscal contraction IFiscal discipline since the 2001 crisis has led to a decline in budget deficit to 1%, while the primary balance generated over 5% surplus. Having risen to 5.5% in 2009 due to the crisis, the budget deficit has improved since then, falling to some 1.4% of GDP in 2011.
Expansionary fiscal contraction IIDebt to GDP ratio of above 70% post 2001 crisis has fallen to below 40%. This has led Treasury rates to permanently decline to single digits.
The Sharp fall interest ratesAs a result, nominal and real rates fell sharply.
Inflation: The Long ViewInflation has declined to high single-digit levels from over 70% in 2002, yet hasn’t been able to break the 7-11% band on the downside since 2004, except during the crisis.
Results: GrowthEnd of the sharp swings?
8.6
0 1 2 3 4 5 6
2.42
2.93
3.01
3.47
5.45
0 2 4 6 8 10 12 14 16
4.48
6.16
7.95
11.09
13.57
Turkey’s top-5 export items (1980, share %)
How Mediterranean is Turkish Economy?Source: UN COMTRADE
Turkey’s top-5 export items (2010, share %)
Slide 12
Economic transformation: a lot of diversification and a little bit of sophistication
Rapid trade integration after 2001 crisis
How Mediterranean is Turkish Economy? Slide 13
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
0
50
100
150
200
250
exports
imports
Turkey’s imports to and exports from the World 1990-2011, USD bn
Source: UN COMTRADE, TEPAV Calculations
Unemployment: The Long ViewThe key to understanding Turkish labor force is not people who cannot find work, but those who don’t want to work.
InequalitySimple Gini Coefficient hides some of what is going on.
Poverty
What is missing? Turkey’s connectivity problem
(+ prioritization problem: carrying passengers vs. carrying containers)Regional Picture
How Mediterranean is Turkish Economy?
İstanbul - 105Tekirdağ
+ 6
Denizli0
Antalya+ 2
Kayseri+ 10
Gaziantep+ 15
Ankara+ 18
Bolu+ 2Bursa
+ 28
Samsun+ 8
Adana+ 7
Balıkesir+ 2
İzmir- 37
Eskişehir+ 1
Hatay+ 8
K.Maraş+ 11
Kocaeli+ 40
Konya+ 12
Manisa+ 7
Mersin- 3
Ordu+ 1
Sakarya+ 4
Trabzon+ 3
Karaman- 1
Six-lane Expressways (red lines, as of 2010) and the change in the number of firms located in the provinces that had more than 5 firms in the largest 1000 industrial enterprise rating of the Istanbul Chamber of Industry by 2009, between 1997 and 2009.
Kaynak: İstanbul Sanayi Odası
Slide 17
What is Missing? Education policy is economic policy for Turkey
Slide 18
Average age of the population
Female labor force participation rate (%)
Average years of education
1 USA 36.9 58 12.4
2 China 35.5 67 7.5
3 Japan 44.8 48 11.5
4 Germany 44.9 53 12.2
5 France 39.9 51 10.4
6 UK 40.0 55 9.5
7 Brazil 29.3 60 7.2
8 Italy 43.5 38 9.7
9 India 26.2 33 4.4
10 Canada 41.0 63 11.5
11 Russia 38.7 58 8.8
12 Spain 40.5 49 10.4
13 Mexico 27.1 43 8.7
14 S. Korea 38.4 50 11.6
15 Australia 37.7 58 9.8
16 Netherlands 41.1 60 11.2
17 Turkey 28.5 24 6.5
18 Indonesia 28.2 52 5.7
19 Switzerland 41.7 61 10.3
20 Poland 38.5 46 10.0How Mediterranean is Turkish Economy?
Emre [email protected]
+90 533-6365340www.economonitor.com/emredeliveli
Hurriyet Daily News columns
Thanks for listening!Questions & Discussion
