Where will we reach by 2023?
There is a lot of talk about what level Turkey’s per capita income can reach by 2023, the centennial year of the Republic. While optimists suggest 25,000 dollars, pessimists prefer to insist on a more modest figure such as 15,000 dollars. Which one is the most realistic estimate? It’s not easy to say.
Why? It is also not easy to estimate what kind of problems and what kind of opportunities might emerge during the coming years as President Abdullah Gül recently mentioned during a conference at the Military Academy. But opportunities certainly suggest that the optimists’ estimates are possible.
However, even the optimists know that there might be a lot of problems – either domestic or international – which could hamper the realization of high growth rates. To prevent this, it is necessary to implement new incentives. It is hoped that the incentive package recently announced by the government might give a boost to growth, help reduce the current account deficit, minimize regional inequalities and make Turkey more attractive for domestic and foreign direct investments.
The recent crises slowed the Turkish economy down like it did to almost all economies. However, even before the crises, it was impossible for Turkey to sustain very high growth rates like some East Asian countries. There are not only economic but also political and social limits (which have not received attention in those countries) to maintain high growth rates for a long time. During the last half-century, Turkey’s yearly average gross domestic product growth rate has been approximately 5 percent. This is also a reasonably high growth rate, but cannot raise per capita income up to 25,000 dollars in 11 years.
However, with simple mathematics, a yearly average rate of 7 percent could raise per capita income to slightly over 20,000 dollars, which would amount to a great success among other emerging countries. Historically, it has always been difficult for emerging countries to reach this figure after they reached 10,000 dollars. Turkey can do that. But, of course, the necessary political and social conditions must be realized.
The political and social aspects of economic growth might seem abstract for some people. However, not only in Turkey, but also in some very rich world powers, domestic and international political turmoil has created enormous economic problems. The best examples were the Nixon era in the United States and the long, difficult years before Margaret Thatcher became the prime minister in the United Kingdom. For Turks, it is not hard to remember the problems during the last half-century.
Nowadays, another interesting discussion is going on the relation between per capita income and progress in democracy. In many emerging countries, especially in East Asia, this is not the case. In Turkey, however, there has been a slight feedback effect between wealth and democracy in spite of some occasional interruptions. In other words, as better democracy created faster growth, faster growth generally encouraged democratic reforms. Politicians, authorities, academics, journalists and, most importantly, people must take great care to ensure the continuation of this tradition.
There is a lesson to take from this historical fact. If the 2023 per capita income target is such a high figure, then it is necessary to first achieve some important reforms in the social and political structures to create a better democracy. This will contribute to growth, which will make it easier to implement new reforms to further develop democracy.
One last remark: Reforms in social and political structures for “advanced” democracy must not be implemented by imposing rules that are totally against the people’s tendencies. Turkey suffered much in the past because of that silly practice, which was called “social engineering.”