Roland Benedikter, Dott. Dr. Dr. Dr., is European Foundation Fellow 2009-2013, in residence at the Orfalea Center for Global and International Studies of the University of California at Santa Barbara, with duties as the European Foundations Research Professor of Political Sociology. His main field of interest is the multidimensional analysis of what he calls the current “Global Systemic Shift”, which he tries to understand by bringing together the six typological discourses (and systemic order patterns) of Politics, Economy, Culture, Religion, Technology and Demography. Roland is currently working on two major book projects: One about the “Global Systemic Shift”, and one about the “Contemporary Cultural Psychology of the West”, the latter comparing culturo-political trends in the European and American hemispheres. With both projects he is also involved in European Policy Advice.
Changing Turkey: In your opinion, what are Turkey’s main economic challenges? Do you think the Central Bank of Turkey’s dual policy framework has been effective in managing some of them?
Dr. Benedikter: The main challenge is the European crisis, given that Turkey’s economy is strongly dependent on the Eurozone, for example in the textile industry which exports more than 75% to Europe. Turkey has to search for additional and even alternative markets abroad, since the European crisis due to its structural origins largely independent of mere economic cycles doesn’t show signs of quick recovery. Turkey has to search in particular for financial markets securing the inflow of foreign money, since Turkey despite the successful management of the international financial crisis 2007-10 remains over-proportionally dependent on external capital because of its comparatively low domestic savings level. The dual policy framework has been effective in weathering the recent financial crisis, and the Turkish banking sector has become one of the relatively solid in the European geopolitical zone. The challenge will be to continue attracting foreign investment also after the cooling down of the EU accession negotiations, to further dicrease inflation and to differentiate the financial sector where more than a third of all Turkish assets remains concentrated in just 4 banks. The regional differences in wealth and economic performance remain too accentuated, more effort has to be put into developing the structurally weak areas. Most important of all, the account deficit has to be reduced urgently.
Changing Turkey: What are some of the positive economic developments you have seen in Turkey in recent years?
Dr. Benedikter: The fiscal balance has been improved, and the credit-restraining prudential measures have been effective in stablizing the financial sector. Furthermore, due to a comparatively flexible and fast crisis management, there was a positive rebound from the 2008-09 crisis that turned into an output well above pre-crisis levels, as the IMF has rightly pointed out in November 2011. Key industries have developed positively, and a larger proportion of the population gained access to lower middle class life. What hasn’t been achieved is to reduce the number of the poor, which is relatively stably at above 17% – too high in the medium and long term perspective, even if it has to be taken into account that highly industrialized European countries like for example Italy, as a consequence of the recent crises now in the 6th year in Europe, have exactly the same numbers in 2012.
Changing Turkey: Are you optimistic about Turkey’s economic future? Do you think anything needs to change within the country to better position it for sustained economic growth?
Dr. Benedikter: With the Arab awakening Turkey has risen to a key regional player, for now mainly politically. Given its strengthened political role, it can be expected that its economy is going to increase in regional importance too. Overall seen, I am optimistic regarding the future; one reason among many is that Turkey is one of the world’s largest agricultural producers, and given that the global food industry is the sector that is most rapidly growing in prices and speculation, this should be at the country’s advantage. Another reason is that the natural resources and tourism industries will also grow in global importance in the coming years. Last but not least, with relatively low taxes, a VAT still at 18% and thus below most Eurozone-countries and a GDP growth of more than 8% in 2011, Turkey will remain comparatively attractive to foreign investors particularly as an alternative to the Eurozone.