Monday, February 18, 2013
By Sagar Rijal
On Tuesday, February 5th, at the Young Scholars on Turkey Conference, it was a grizzled veteran who stole the show. In his keynote address, the former finance minister of Turkey, Dr. Kemal Dervis, spoke on the current state of Turkish economy and presented a forceful case of Turkey as a global player.
Having spent a long and illustrious career as an economist in various leadership positions at the Word Bank and the UNDP, Mr. Dervis currently serves as the director of Global Economy and Development Program at the Brookings Institution. Drawing on his vast international experience, Mr. Dervis spoke with authority on Turkey’s global role. Geographically, historically and culturally Turkey has been a bridge between the East and the West, between Asia and Europe. As the progeny of the Ottoman Empire and the children of the modernizing policies of Kemal Atatürk, the Turkish people are largely cosmopolitan in their worldview. In the present context, the Turkish state is proud of its ability to manage political Islam with a democratic republic and harbors ambitions to be a role model as well as a regional leader. All these aspirations and opportunities are based on the foundation of a booming economy.
On economic matters, Mr. Dervis’ views are sacrosanct. After all, he was the main architect of the far-reaching economic liberalization policies that lifted Turkey out the deepest financial collapse in its history. In February 2001, owing to decades of political instability and an economic ideology that favored high levels of state intervention in its markets and banks given to an over-reliance on foreign capital, Turkey experienced a massive economic crisis. The stock market crashed, threatening bank failures, massive bailouts and even the possibility of state default. Arriving at the scene from a long career at the World Bank, Mr. Dervis was able to convince the IMF for enough loans to see the crisis through. In the meantime, he passed tough, long-term and market-friendly reform policies, which has led to a decade’s worth of historically unprecedented growth.
Mr. Dervis took obvious satisfaction in recounting all the ways that Turkish economy has boomed since the crisis. The GDP has grown by more than 5% per year leading to a massive uplift in the living standards of ordinary Turks. The aggregate GDP has almost quadrupled and many Turkish companies have grown to regional and even global prominence. While he remained sanguine about the continuing vigor of Turkish economic trends, Mr. Dervis cautioned about the low savings rate and very low educational attainment rate in Turkey. With its newfound budget surpluses, he hoped that expanding educational opportunity, especially female participation in secondary and higher education, would become a priority.
Yet, the larger aspiration of Turkey as an economic power and a global player was front and center. In these times of budget crisis and austerity measures in Europe and myriad political crises in the Middle East, Turkey’s role as the stable and prospering democracy might indeed be to serve both as a model and the bridge.
~Sagar Rijal, ABD, is spending the final semester of his graduate assistantship doing research for his dissertation in Washington, D.C. Every week he will attend meetings, seminars, or presentations at think tanks and develop a column for the Bulletin community.
Posted by ODU-GPIS at 12:11 PM