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October 2013 “Strategies for Enhancing Turkey’s Competitiveness”: Some Comments from a Macro Perspective Murat Ucer Turkey Data Monitor/Koc University.

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Presentation on theme: "October 2013 “Strategies for Enhancing Turkey’s Competitiveness”: Some Comments from a Macro Perspective Murat Ucer Turkey Data Monitor/Koc University."— Presentation transcript:

1 October 2013 “Strategies for Enhancing Turkey’s Competitiveness”: Some Comments from a Macro Perspective Murat Ucer Turkey Data Monitor/Koc University

2 Slide # 2 Main Observations…  A CAD/GDP of 6%-7% together with sub-par growth suggests quite convincingly that we must have a competitiveness problem…  Lira appreciated too much till the global crisis in the sense that, our dollar incomes per capita markedly exceeded our real production per capita…  Can Turkey reverse this and regain competitiveness through a weaker lira? Difficult (because of inflation) and undesirable (because of “$25K by 2013” target)…  According to WEF, Turkey’s competitiveness ranking rose sharply in recent years. This is encouraging, but not enough because we are especially weak in ‘pillars’ that help to break through the MIT…  Bottom Line: Don’t do what Nasreddin Hoca did (and look for the ring where you lost it…)

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8 Slide # 8 Summary…  Competitiveness = Productivity (especially, TFP)…  “Past performance is no guarantee for future returns”: Almost impossible to replicate the “2.5-fold (nominal) increase” in GDP p.c. of the past 10+ years…  TFP growth was solid, but what drove TFP? Could it be some basic efficiency gains? Might all low-hanging fruits be gone already?  Tighten and improve prioritization of the macro framework (re-)focusing:  Monetary policy, to price stability and disinflation…  Macro-prudential policy, to containing credit growth and financial stability…  Fiscal policy, to savings (not just debt dynamics)…  Structural reforms -- after a very clear and convincing prioritization -- to the supply side…


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