2008_10_SRP_CornellKaraveli_Turkey

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16 Svante E. Cornell and Halil Magnus Karaveli Turkey’s Demography and Economics Turkey is home to a young population and a dynamic economy, which has grown rapidly in the past decade. Turkey’s population growth is scheduled to decline over the coming decades, stabilizing at around 90 million people. Likewise, as the economy develops, growth is likely to diminish somewhat, while likely to remain high given Turkey’s advantageous economic linkages to Europe and its modern industry. That said, Turkey is likely to experience challenges. These include the shifting ethnic mix of the population, with political connotations, as well as the exposure of its economy to the world, especially given Turkey’s lack of fossil fuels, making it dependent on imports for the substantial growth in energy consumption that accompanies its economic and demographic growth. Turkey’s demographic outlook is relatively positive. It does not share either the problem of an aging population that characterizes most of Europe, nor the runaway population growth of many developing countries. Instead, Turkey faces the relatively advantageous prospect of a population continuing to grow, but reaching a manageable 90 million by 2030. Figure 1: Turkey’s Population Pyramid (Council of Europe)
Prospects for a ‘Torn’ Turkey 17 As figure one shows, Turkey’s population is relatively young, with a considerable population of early working age. The comparison to the average population structure of the Council of Europe member states is palpable. Turkey will hence not for many decades experience the negative economic effects of an aging population. Meanwhile, Turkey’s population growth is projected to decline from ca. 1,25% per year at present – which implied an increase of roughly a million people per year in the past decade – to less than half that number by 2020. Based on the Economist Intelligence Unit’s projections, the Turkish population – at roughly 75 million today – is scheduled to grow to about 84 million in 2020 and 88 million in 2030. Such a population trajectory is highly favorable for economic growth, and is one explanation frequently cited for the Asian economic miracles of the second half of the twentieth century. Yet this opportunity must be seized for a country to experience such benefits. Turkey’s expected population size would make it the most populous country in the European Union should it gain membership, with a population of more than 15% of the EU-27. That in itself makes Turkey clearly a regional power to contend with simply in terms of its demographic and economic power. Turkey’s economy has become known for its boom-bust cycles. Indeed, recurring economic crises have characterized Turkey since the 1950s. In recent decades, rampant inflation routinely hovered around 100%, while major shocks hit the economy in 1994, and then again more viciously in 2000- 2001. That last crisis was particularly disastrous, as it led to the currency falling by 40 percent against the dollar almost overnight, wiping away savings and wages. In 2001, the economy contracted by over 7 percent. Since then, however, Turkey has implemented an IMF-sponsored stabilization program, which built a more stable basis for a developing economy. Turkey’s economy has been developing rapidly, and has enjoyed the highest growth rates of the OECD, at ca. 7 percent yearly. An extensive privatization program brought in massive foreign direct investment, facilitated by the reduction of inflation rates from ranges of 60-100 percent to the single digits, and the streamlining of legislation to European standards. A 640-percent growth in companies with foreign capital was experienced from 2002 to 2007. While this economic recovery program was initiated by the former World
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Turkey in 2023: the Republic at 100
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Conclusions Turkey’s internal and
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Authors’ Bio Svante E. Cornell is
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2008_10_SRP_CornellKaraveli_Turkey

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