Sun, Jun 02, 2013 - Page 9 News List

Why Turkey is thriving and what other countries can learn

Long-term growth stems from sound monetary and fiscal policies, the political will to curb banks and bold investments in infrastructure, skills and technology

By Jeffrey Sachs

A recent visit to Turkey reminded me of its enormous economic successes during the past decade. The economy has grown rapidly, inequality is declining and innovation is on the rise.

Turkey’s achievements are all the more remarkable when one considers its neighborhood. Its neighbors to the west, Cyprus and Greece, are at the epicenter of the eurozone crisis. To the southeast is war-torn Syria, which has already disgorged almost 400,000 refugees into Turkey. To the east lie Iraq and Iran, and to the northeast lie Armenia and Georgia. If there is a more complicated neighborhood in the world, it would be difficult to find.

Yet Turkey has made remarkable strides in the midst of regional upheavals. After a sharp downturn between 1999 and 2001, the economy grew 5 percent per year on average from 2002 to last year. It has remained at peace, despite regional wars. Its banks avoided the boom-bust cycle of the past decade, having learned from the banking collapse in 2000-2001. Inequality has been falling. And the government has won three consecutive general elections, each time with a greater share of the popular vote.

There is nothing flashy about Turkey’s rise, which has been based on fundamentals, rather than bubbles or resource discoveries. Indeed, Turkey lacks its neighbors’ oil and gas resources, but it compensates for this with the competitiveness of its industry and services. Tourism alone attracted more than 36 million visitors last year, making Turkey one of the world’s top destinations.

Even a short stay in Ankara allows one to see these underlying strengths. The airport, highways and other infrastructure are first-class, and a high-speed intercity rail network links Ankara with other parts of the country. Much of the advanced engineering is homegrown. Turkish construction firms are internationally competitive and increasingly win bids throughout the Middle East and Africa.

Turkey’s universities are rising as well. Ankara has become a hub of higher education, attracting students from Africa and Asia. Many top programs are in English, ensuring that Turkey will attract an increasing number of international students. And the country’s universities are increasingly spinning off high-tech companies in avionics, information technology and advanced electronics, among other areas.

To its credit, Turkey has begun to invest heavily in sustainable technologies. The country is rich in wind, geothermal and other renewable energy, and will most likely become a global exporter of advanced green innovations.

Waste-treatment facilities are not typically tourist attractions, but Ankara’s novel integrated urban waste-management system has rightly attracted global attention. Until a few years ago, the waste was dumped into a fetid, stinking, noxious landfill. Now, with cutting-edge technology, the landfill has been turned into a green zone.

The private waste-management company ITC receives thousands of tonnes of solid municipal waste each day. The waste is separated into recyclable materials (plastics, metals) and organic waste. The organic waste is processed in a fermentation plant, producing compost and methane, which is used to produce electricity in a 25 megawatt power plant. The electricity is returned to the city’s power grid, while the heat exhaust is piped to the facility’s greenhouses, which produce tomatoes, strawberries and orchids.

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