The BRIC countries and Turkey
FATİH ÖZATAYSeveral comparisons can be made between the BRIC countries consisting of Brazil, Russia, India and China, on one hand, and Turkey and South Korea on the other.
One: When an instant snapshot is taken, it can be seen that South Korea, which had the same per capita income as us at the beginning of the 1900s, is in a very different position now, or has at least been included among developed countries for a while. The highest per capita income among BRIC countries belongs to Russia. Next come Brazil and China. India is far behind. Turkey, however, is between Russia and Brazil.
Two: When viewed from the angle of development in recent years, Korea is again at the forefront. Its per capita income rate to the Unites States’ per capita income increased 18.3 points between 2000 and 2012. This time, Russia and China follow it very closely, at 13.8 and 11.6 points, respectively. Then comes Turkey at 7.5 points. Brazil is at 3.4 points, and so is India.
Three: When viewed from the angle of performance in just recent years, the growth rate of Russia and China is at a level where the gap between the rich countries can be closed to a significant extent in the mid and to long term. Turkey’s is not bad either, but Brazil and India do not give much hope.
Four: There is, however, no guarantee that any past performance will also continue into the future. There are two factors that are necessary to maintain the fast growth tempo: The average number of years of education in and after high school for the adult population, as well as the ratio of high-technology products in total exports. Russia stands out with education, while China does so with high-technology products exports. Russia’s high-technology products exports are not bad either.
Turkey’s situation, on the other hand, is not at all pleasant. There are significant differences both among BRIC countries and with Korea.
Five: The fact that the level of domestic savings is low is one of the significant factors that block the rise of the per capita income level. Let’s leave China’s maddening savings rate – it is doubtful that such a high savings rate is even “desired.” Korea’s and India’s saving ratios are quite high. Russia also comes right next, close to them. In Brazil and Turkey though, saving ratios are very low. Turkey’s saving rate is less than half of Russia’s. More interestingly, Turkey’s saving rate has fallen in recent years to an amount even lower than Brazil’s, which has a very low one.
Six: I am not in a position to speak with authority for any country except Turkey. But for Brazil, I can say one thing, because it is obvious: Its future is not bright; the BRIC abbreviation looks like it will lose its “B” soon.
Seven: The picture related to Turkey is very clear: Unless these circumstances change, it is impossible for Turkey to maintain its performance of recent years. Besides, as I showed in item two above, that performance is not at all sufficient. Also, it should not be forgotten that the level of per capita income we had reached by 2012 was only 30 percent of the U.S.’ level.
Fatih Özatay is a columnist for daily Radikal in which this piece was published Jan 22. It was translated into English by the Daily News staff.