Why did Turkish economy prosper while the Middle East fell behind?
The special meeting on “Economic Growth and Job Creation in the Arab World” of the World Economic Forum (WEF) at Dead Sea, Jordan that I attended over the weekend showed me once more how Turkey was shining like a “star” in the region.
The focus was on the Arab Spring that affected such countries as Egypt, Tunisia and Libya and the probability of the phenomenon to spring to other countries in the Middle East and the Gulf starting from Syria. However, the giant economic troubles of the region are thus standing there.
I am counting some of them: Unemployment among the youth rising up to 40 percent, the minimal share of the private sector, bribery and corruption, lack of accountability and transparency, no presence of women in business life and, most importantly, powerlessness of institutions.
Coca Cola’s CEO Muhtar Kent, co-chair and speaker at the WEF meeting, gave truly striking figures for the rich Gulf countries. The volume of the private sector in Gulf countries is 15 percent of the gross domestic product (GDP) because everything is under the control of the ruling families, just like the Libya of Gadhafi.
There is no atmosphere for Small and Medium-sized Enterprises (SMEs) and entrepreneurship, in short the private sector, to flourish. As Kent says, jobs should be created for 85 million people in the region in coming years.
Let us leave aside this picture I summarized in a nutshell and move on to the evaluation of Professor Timur Kuran from Duke University, whom I met at the WEF meeting at the Dead Sea. Economist Kuran, the author of books “The Economic Predicaments of Islamism” and “The Long Divergence: How Islamic Law Held Back the Middle East,” said: “If Turkey has an economic power in the region, the roots of this were planted in the 19th century. The Middle East lagged behind because it did not change its Islamic Law system. I am always saying that. Turkey is one to three generations ahead of Arab countries because it has achieved the modernization of its legal system.”
The first secular commercial courts were formed in the 1850s in the Ottoman Empire. Professor Kuran said: “If the achievements of the Anatolian Tigers of the conservative segment are being spoken, this is because they have been using modern tools from accounting system to competition laws.”
Doesn’t it show how correct Kuran’s evaluations are when you compare the dynamism of the Turkish economy with countries of the region?
I will not go very far. I will give two examples again from the weekend’s forum. While talking with members of the Libya National Transitional Council, names of Turkish companies that have undertaken contracts worth billions of dollars came up.
The airport runway that was heavily damaged during clashes at the capital Tripoli will be repaired by TAV which, as a consortium, had also undertaken the building of its terminal. TAV construction work had stopped because of clashes, but it is highly probable that the construction will restart in the first quarter of 2012.
The second example is from Dubai. A young Turkish businessman, Arda Tokbaş, attended the WEF meeting. He has been heading a company named HDF in Dubai for 10 years. HDF, which has one of the most well-known brands in Turkey, Pınar, under its umbrella, belongs to the Yaşar Group and is growing at a rate of 20 percent each year by exporting dairy products to neighboring countries. Tokbaş said some cheese products such as labne (mild cream cheese) were market leaders.
Who can stand against the Turkish entrepreneur in the region?