2008_10_SRP_CornellKaraveli_Turkey

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18 Svante E. Cornell and Halil Magnus Karaveli Bank economist Kemal Dervis, who was Minister of Economy in the centrist government in 2002, it was followed very closely by the AKP government once it came to power toward the end of that year. The prospect of EU accession has been the political facilitator of responsible economic policies, coupled with the political stability of a single-party government under the AKP. Whether Turkey will continue along the current, positive path of economic progress is hence dependent partly on global trends – such as the current status of the world economy – and domestic trends, especially the prospects of political stability. That said, Turkey’s economy has substantial problems in terms of the current account deficit, which in the past five years amounted to a total of $118 billion. Likewise, debt has been rising: domestic debt grew by 70 percent from 2002 to 2007, while foreign debt spiked by 83 percent in the same period. While debt figures need to be seen in the context of rapidly growing GDP, they are nevertheless high. Total debt in 2007 stood at half a trillion dollars. Likewise, Turkey has seen a growth in its foreign trade deficit, both in absolute and relative terms. In 2007, the rate of exports to imports was 62 percent, 8 points down from 2002. On the basis of the current trends of the past decade, most economic forecasts have suggested that Turkey stands a good chance of continuing to be a relatively rapidly growing economy in the coming decade and beyond. Such positive scenarios assume that Turkey’s integration with Europe will continue, and that a modicum of political stability will prevail over the decades. In this scenario, the major opportunities for continued integration of Turkey’s economy with Europe are foreseen, most specifically in the banking sector and a continued growth of Foreign Direct Investment, which has yet, certainly in per capita terms, failed to reach the levels of the Central and Eastern European countries. Based on such a scenario, Turkey’s economy could grow by an average of over 4 percent until 2020, translating into a GDP per capita growth of close to 3 percent annually in a good scenario. That would bring Turkey to a GDP per capita of us$11,000 in purchasing power parity terms by the end of the next decade, comparable to Poland in 2003. Meanwhile, alternative scenarios are also plausible. Scenarios that see a return to the political instability and
Prospects for a ‘Torn’ Turkey 19 on-and-off reform of the 1990s, or a Turkey turning away from Europe and into a protracted instability as the Islamic and secular forces battle for control, would reduce these growth rates by one and two percent, on average. Moreover, the negative aspects of single-party rule must also be included into the assessment. Especially in an environment with weak rule of law, the persistence of an elite in power generates growing avenues for corruption. Indeed, the AKP’s second term has seen a growth in the tendencies to control independent media and to favor political allies in privatization contracts. 7 This follows on a systematic tendency of the AKP government to appoint cadres to the bureaucracy on the basis of loyalty rather than on the basis of competence and merit. This problem, unless overcome, will prevent Turkey from realizing the most ambitious development goals foreseen by the optimistic development scenarios. The Unpredictable Turkey’s transformation into a culturally Western, European-style nationstate and democracy remains at best an unfinished revolution. Religious traditionalism, feudal remnants, residual authoritarian inclinations and ethnic fault lines continue to assert themselves. Although the issues of contention are as old, even older, than the republic, the republican enterprise – the nation state and secularism – is challenged as never before. The forces of secularism and of religious conservatism, of Turkish nationalism and Kurdish separatism, continue to pull the country in opposite directions and strain national cohesion, making political stability elusive and the securing of democracy a still more difficult challenge. Turkey presents a special case, which fits neither into a European nor a Middle Eastern framework of historical development; hence, the exercise of predicting its future trajectory is scarcely sustained by analogies. Looking back a decade and recalling that 1998, the year of the republic’s 75 th anniversary, had also been marked by the confrontation between secularism and political Islam, gives a useful sense of the unpredictability of political 7 M. K. Kaya and Svante E. Cornell, ”Politics, Media and Power in Turkey”, Turkey Analyst, 4 June 2008. (http://www.silkroadstudies.org/new/inside/turkey/2008/080604A.html)
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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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