First of all, Turkey has been the fastest country in coming out of the crisis. The sharp trend of decline in national income that became salient in the last quarter of 2008 was replaced by a rapid relative recovery starting in the second half of last year and everyone was surprised to see a growth rate of 6 percent in the last quarter of 2009. Having shrunk by a total of 4.7 percent in the crisis year of 2009, the damage sustained by Turkey was less than that suffered by giants such as Russia, Japan, Italy and the UK.
Second, Turkey was one of the rare countries that did not lose financial control during the crisis. Although Turkey had announced a bailout plan amounting to $50 billion due to the heat felt from the crisis, it never lost control with respect to budgetary deficits and public debts. Thus, it avoided the growth vs. financial stability paradox that has now overtaken Japan, the EU and the US.
Third, not only the financial sector but also the industrial sector has managed to translate the crisis into an opportunity despite the crisis conditions. For instance, the banking and industrial sectors boosted their profits by 50 percent and 23 percent, respectively, in 2009. The only group that could not ward off the crisis was the working class. Thus it has become clear that the investors in the banking and industrial sectors who cast their employees onto the streets, claiming they were “being hit hard by the crisis,” were lying. Apparently, they were hostile to Turkey and were ideologically pursuing plans to weaken the government. Except for the Confederation of Turkish Real Trade Unions (Hak-İş), the trade unions opted to bark up the wrong tree and targeted the government instead of backing the workers against these companies.
Fourth, the Treasury and the Central Bank of Turkey exhibited a “model” success in terms of economic management. The CBT has become an intelligent bank that can export know-how on crisis management to the world. Consequently, the exchange rates have not skyrocketed for the first time during a crisis in Turkey, and the policy interest rates were lowered by 10.25 points, or over 60 percent. In parallel, the upward trend that had ossified around the threshold of 10 percent in bond interest rates could be reversed, with an eventual decline to 8 percent last year. These rates have been stabilized at this level for several months and, therefore, Turkey is now able to conduct its borrowing at the lowest rates in its history. This has the greatest benefits for big industrialists and bankers who incessantly criticize the government, but continue to reap the benefits of the situation and lay off workers.
Fifth, currently the country’s positive decoupling process is also underway in terms of growth and employment. Turkey grew by 11.7 percent in real terms in the first quarter of 2010, compared to the same period last year, and it is among the countries with highest growth rates in the post-crisis era. I expect an 8 percent growth rate for Turkey in the second quarter. As a result, Turkey will have grown by about 10 percent in the first half of 2010.
Sixth, high growth has created high employment. Under normal conditions, it would take one or one-and-a-half years between recovery from the crisis and the translation of this recovery into employment. Thus, we would normally expect Turkey to recover in 2010 and this to be translated into employment starting in mid-2011. Indeed, in many countries, unemployment is not declining right now, but increasing.
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As for Turkey, non-agricultural (services and industry) employment, which is a very critical indicator for the country, skyrocketed by 7.3 percent on an annual basis in May compared to the same period last year. Accordingly, it can be said that growth has been significantly translated into employment. Essentially, Turkey lowered unemployment at the fastest and highest rate in the post-crisis period. As a sidenote, I can say that the general unemployment rate was 10.8 percent at the beginning of the crisis (September 2008). It rose to 16.1 percent in February 2008. Thus, it increased by 50 percent in Turkey. On the other hand, the unemployment rate decreased to 11 percent in May 2010, a return to the pre-crisis rate.
Currently Turkey is one of the countries where unemployment has increased at the lowest rates (2.8 percent) compared to September 2008. In other words, Turkey is among the countries that decreased its unemployment at the highest rate.
These figures imply that Turkey has, comparatively, managed the crisis very well. The factors that gave rise to this pleasing picture in a very serious crisis that even hit Europe hard and paved the way for Turkey’s emergence as a country of hope include the government’s self-confidence, which set the mood of the economy, its rare resistance to submitting to the international organizations such as the IMF and domestic business lobbies and various crisis measures, such the $50 billion plan to support the markets.
