The main theme of the 43rd World Economic Forum (WEF) in Davos this year was “resilient dynamism.”
Not only the world economic system in general, but also regional and national cases were evaluated. Turkey was used as an example of a success story in terms of the resilient dynamism that will be needed to face the challenges and uncertainties of the global economic system.
The term resilience, used differently in a range of fields from psychology to engineering and from sociology to economics, has no single, commonly accepted definition. The concept typically connotes the ability to bounce back from a strain or disturbance, returning to the pre-stress norm or a transformed post-stress condition. In the field of economics it refers to the capacity of systems as well as economies to resist, rebound and recover from any crisis to the prior status and therefore, to normalize.
For instance, at a systemic level, unlike communism, which is based on the well-known properties of central planning and a denial of private property, free entrepreneurship and the quest for profit, capitalism is considered to be a highly flexible system continuously going through a process of “creative destruction.” In other words, while deep rigidities involved in the nature of central planning resulted in a total systemic collapse in the face of real life experiences, capitalism, despite lingering difficult circumstances, is capable of recovering and regaining its inherent dynamism. Following the world's economic crisis, this is the relevant question, namely: Is global capitalism today going through a prolonged period of convalescence, or is it suffering from an incurable sickness?
Considering the current deep economic malaise in the leading developed economic zones such as the US, the EU and Japan, this question is quite timely. In that regard, the theme of resilient dynamism at the WEF gathering is very appropriate. As a matter of fact, for the same reason, in my last three columns I put special emphasis on the necessity for a new economic framework with different ethics and institutional characteristics.
The future is full of uncertainties and potential threats. They could be listed briefly as follows: 1) global warming; 2) environmental degradation; 3) a shortage of food and commodities; 4) an aging population; 5) the erosion of the family and community values that keep us together; 6) the alienation of individuals; 7) a global wave of national protectionism; 8) the collapse of the global financial system; and 9) unemployment (especially of many young people).
The cost of a greater crisis would be incomparable to those of the past because the effects on our ever more interconnected planet are deeper and felt sooner. In addition, due to worsening political instabilities, fragile governments and the lack of decisive leadership, our collective ability to respond to these challenges is going to be even more crucial.
The “resilience capacity” of economies is evaluated by mutually supportive and dependent factors, including economics, demography, social values, the quality of institutions and so forth. What were the major factors that helped Turkey to successfully navigate the crisis, unlike many other countries that are struggling?
I will provide the answer to this question and discuss Turkey's position regarding resilient dynamism term in my next column.