Spotlight: Turkey stumbles on zig-zag path to centennial goals

Turkey's ambitious goals of be ing among the world's top ten economies and playing a bigger role in the Middle East and beyond are facing headwinds as the country has got caught in a middle-income trap and worsened ties with neighbors.

Under the vision of the ruling Justice and Development Party (AKP), Turkey is supposed to be among the top ten economies of the world and increase exports to 500 billion U.S. dollars by the year 2023, when the republic celebrates its 100th birthday.

However, the country has been stuck in a middle-income trap roughly since 2008 when its per capita income rose to 10,000 dollars for the first time.

The per capita income has now regressed to around 9,500 dollars, a figure just slightly over that for the year 2007.

The AKP also hoped to increase the country's gross domestic product (GDP) to 2 trillion dollars by 2023, though the figure dropped down from 800 billion dollars in 2014 to around 720 billion dollars in 2015.

By most accounts, the AKP government's economic goals, which have been particularly emphasized roughly since 2010, looks today like a far-fetched dream.

It is like crying for the moon for Turkey to aspire to be part of the world's top ten economies by 2023, said Seyfettin Gursel, director of the Center for Economic and Social Research (BETAM) with Bahcesehir University in Istanbul.

Turkey ranked 16th among the top economies a couple of years ago, but had slipped since to 18th, according to data for the year 2014 released by the World Bank.

A study by the Center for Economics and Business Research, a London-based economics think tank providing detailed forecasts for the world's economies, put Turkey at 19th in its ranking for the year 2015.

Gursel, an economist, while drawing attention to the incoherence in AKP's economic vision, said "Even if the yearly per capita income in Turkey were to reach 25,000 dollars, and the GDP 2 trillion dollars, Turkey could only rank 14th on the list."

According to a projection for the year 2030 by the U.S. Department of Agriculture, Turkey will rank 17th on the list of top economies.

Faik Oztrak, a deputy from the main opposition Republican People's Party and a former top economy bureaucrat, agreed that the goals set for 2023 are no longer attainable.

"For the GDP to reach 2.1 trillion dollars in 2023, a yearly minimum economic growth rate of 19 percent is needed," Oztrak said in a recent written statement.

According to World Bank projections released in January, Turkey attained a growth rate of 4.2 percent in 2015, in contrast with 2.9 percent over the previous year, while the rate expected for the next two years is both 3.5 percent.

If Turkey wants to get out of the middle-income trap, it urgently needs to increase productivity in economy, heavily invest in technology, research and development to foster innovation, encourage savings, investments and the participation of women in labor force.

Above all, for any steps to have a lasting effect, the education system should be reorganized with a view to increasing quality, fostering learning rather than memorization.

Even if such reforms were to be carried out, the best Turkey could hope to achieve by 2023 is a per capita income of 17,000-18,000 dollars, BETAM's Gursel argued.

In 2012, the AKP government launched, in a bid to revive the economy, a comprehensive economic stimulus package, but it did not seem to have helped much.

The government also launched at the end of last year an action plan aimed mainly at helping small businesses, low-income families and the young.

Turkey chronically suffers from a relatively high current account deficit and a low level of domestic savings. It is particularly dependent on foreign capital, both in the form of hot money and, still better, direct investments.

Deputy Prime Minister Lutfi Elvan recently announced that the government would soon submit to Parliament a package to improve the business environment and facilitate investments.

The package will, among others, hugely eliminate the red tape required to start a business in Turkey.

Turkey currently ranks 94th in the world as to red tape, while the package, once put into effect, will move the country up to 14th, according to Elvan.

Foreign policy is another area where Turkey has set grand ambitions in recent years.

Particularly following the outbreak of the so-called Arab Spring at the end of 2010, the government felt itself powerful enough to design the region.

Turkey would no longer be an instrument in others' plans for the region, but would instead come up with its own plan, top Turkish officials had said on various occasions over the years.

For one, Ahmet Davutoglu, then foreign minister and now the premier, vowed that Turkey would be the "game setter" of the Middle East.

This attitude sometimes amounted to the intervention in the internal affairs of neighbors like Iraq, Syria and Egypt.

The government has paid a heavy price for its grand goals, as Turkey has not only in most cases failed to get the desired results, but its diplomatic relations have also gotten soured with the countries in question.

The government's foreign policy is a total failure, argued Faruk Logoglu, a retired diplomat who held top posts in the Turkish Foreign Ministry until mid-2000s. "Turkey is now marginalized regionally," he said. Endit