Why Turkey is Thriving
Turkey's economy grew by 5% per year on average from 2002 to 2012. But there is nothing flashy about the country's rise, which has been based on fundamentals, like rebuilding the banking sector, getting the budget under control, and investing heavily where it counts: infrastructure, education, health, and technology.
NEW YORK – A recent visit to Turkey reminded me of its enormous economic successes during the last decade. The economy has grown rapidly, inequality is declining, and innovation is on the rise.1
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 it.
Yet Turkey has made remarkable strides in the midst of regional upheavals. After a sharp downturn in 1999-2001, the economy grew by 5% per year on average from 2002 to 2012. 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.