BY FAIK OZTRAK
MILLIYET- Last year Turkey reached its highest rate of economic growth in 40 years and welcomed its lowest inflation rate in 30. In addition, our gross national product (GNP) per capita rose by 23%, climbing to $4,172. These positive developments are appreciated by everybody.
However, we shouldn’t let them take our breath away. We should take a historically informed understanding of the economy. Let’s recall that in 1993 and 2000, Turkey had similar outcomes, but suffered serious crises in the subsequent years, which is why I’d like to underline that economic weaknesses can hide behind such positive outcomes. Let’s try to determine what these weak spots and potential problems could be:
Employment: The economy has been growing fast for three years, but the employment rate has failed to keep pace. If we can’t solve this problem of unemployment, it’s quite likely to hobble sustainable growth.
Quality of financial harmonization: The real level of public purchasing of goods and services is far below that of 2000, which could end up hampering the economic growth. Furthermore, current delays in social security, personnel and tax reforms might hold back efforts to reduce the deficit.
External deficit: The dependence of our economy on imports is rising, and our economic growth is becoming more dependent on foreign debts. Turkey’s economy is contingent on foreign developments. If we look at world history, we can see that many countries have experienced such high growth rates but then failed to sustain it.
If our government fails to complement this growth with effective, disciplined monetary and fiscal policies and also with new reforms aimed at reinforcing the economy’s internal solidity, our record growth might end up being a flash in the pan.
Sustaining growth is much more difficult than attaining it. If we attend to our weak spots and take the necessary steps to eliminate them, our country may be one of the few countries to succeed in this process.