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Turkey can do better, economists say

30 June 2011 [10:42] - TODAY.AZ
Turkey’s gross domestic product has grown 48-fold since the founding of the Republic in 1923, according to new datasets published by a state organization. The rise, however, does not reflect a similar improvement in the nation’s welfare, according to economists.

“Such an increase does not necessarily imply that the welfare of the population increased by the same rates,” Osman Zaim, dean of the Economic and Administrative Sciences Faculty at Kadir Has University, told the Hürriyet Daily News on Monday. The increase in population, thus performance of GDP per capita, the income distribution and the quality of education and health services among other factors need to be considered while making an assessment.

Zaim’s comments came after the State Planning Organization published extensive national income data for the 1923-2010 period on its website last week. The work, titled “Economic and Social Indicators: 1950-2010,” collected various datasets on national income, balance of payment, financial markets, public financing, prices and other socio-economic indicators.

The Turkish Statistics Institute, or TurkStat is expected to annonuce the first quarter GDP for Turkey on Thursday. Many analysts expect a double-digit growth compared with the same period in 2010.

“GDP increased 38-fold when we exclude 1923 and 1924, the World War I recovery years, with annual GDP growth by 26 percent,” Seyfettin Gürsel, chairman of Bahçeşehir University’s Economic and Social Research Center, or BETAM, told the Daily News in an e-mailed statement Monday.

Considering the population has increased from 13 million to 73 million since the foundation of the Republic, the GDP per capita has increased sevenfold, he added.

“The figure indicates a vast growth performance,” Gürsel said, but added that per capita GDP of developed countries has also increased and the income gap between Turkey and developed countries did not close.

“Not everyone’s income increased. The income distribution worsened [respective to growth],” Zaim said, adding that the quality of health and education services had not shown similar performances during the same period. “People’s welfare has not increased that much.”

The structure of Turkey’s economy has changed substantially since 1923. The agriculture sector was dominant between 1923 and 1970, then there was a radical increase in the share of the manufacturing sector in the economy between 1970 and 2000. The service sectors have flourished in the past decade.

“As income increases for some sectors, it decreases for others, but employment is not distributed accordingly,” Zaim said, recalling that about 25 percent of the labor force is still employed in agriculture in Turkey.

Competing countries

Turkey grew faster than South Korea in the 1950s and 1960s, but the latter’s current income per capita is about three times larger than Turkey’s, according to Erinç Yeldan, an economics professor at Bilkent University. Taiwan’s economy has also performed similarly, exceeding Turkey’s economy by about 2.5 times.

“Asian countries relied on strategic trade policy rather than full trade liberalization [for all products]. They have combined import protection with export promotion, which explains their better performance,” Yeldan told the Daily News in a recent phone interview. Turkey’s economy, on the other hand, substituted domestic products for imports until the early 1980s and liberalized afterward, he added. “Full trade liberalization might not always be strategically profitable for a country.”


/Hurriyet Daily News/
URL: http://www.today.az/news/regions/89454.html

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