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The Turkish Economy: Opportunities and Challenges

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Koç Univeristy-TUSIAD Economic Research Forum hosted a discussion on “The Turkish Economy: Opportunities and Challenges” on April 22, 2013. Please see below for details. 

Event Summary:

Koç University-TUSIAD Economic Research Forum (ERF) hosted a conference on “The Turkish Economy: Opportunities and Challenges” on April 22, 2013 at Johns Hopkins University SAIS in Washington, DC.

The conference featured Assistant Secretary of State for Economic and Business Affairs Jose Fernandez as the keynote speaker. Assistant Secretary Fernandez was introduced by TUSIAD Washington Representative Barış Ornarlı. The panelists included World Bank Country Director for Turkey Martin Raiser, IMF Research Department Advisor Prakash Loungani, and Johns Hopkins University Economics Professor Laurence Ball. ERF Director and Koç University Professor of Economics Sumru Altuğ moderated the event.

Assistant Secretary Fernandez focused on the U.S.-Turkey economic relationship and underlined governmental efforts within the framework of the FSECC and the Economic Partnership Commission to expand bilateral economic relations. Highlighting the growing economic ties between the two countries, Fernandez expressed his “bullish” sentiments about the future. He drew attention to some obstacles to increased cooperation like lack of historical familiarity, timidity of U.S. companies in

infrastructure, the fact that Turkey, despite its growth, is largely an SME economy, and protection of intellectual property rights, but stressed the high level of cooperation between the two governments to improve trade and investment levels. Assistant Secretary Fernandez pointed out that the growing middle class in Turkey has become an important market for U.S. products, especially in technology. The Assistant Secretary also highlighted bilateral cooperation in third countries as an important component of expanding the U.S. – Turkey economic relationship. In order to become a top 10 economy, Fernandez argued that Turkey needs to become more transparent, more predictable and more innovative.

World Bank Country Director for Turkey Martin Raiser presented his views on the prospect of Turkey’s rise from a middle income to a high income country. Raiser argued that, unlike in many other developing countries, the average consumption growth for the bottom 40% of the population is increasing faster than the top, which means that the economic growth in Turkey was apparent at all levels of society. The reason that Turkey has done so well has been because of social inclusion, spread of growth inland and eastward supported by public investment.

IMF Research Department Advisor Prakash Loungani discussed the labor market, especially during the global financial crisis. His conclusions were that the share of long term unemployment has remained high in Turkey, despite economic growth. Drawing attention to the fact that the vacancy rate has remained stable over the past several decades while the unemployment rate increased, Loungani signaled issues with smooth job creation, concluding that economic growth did not correlate to job creation in Turkey.

Professor Laurence Ball stated that the Turkish monetary policy has been very innovative and bold in deviating from the “dogma of central banking.” He said, by dismissing the norm of focusing on lowering inflation in exchange for a pro-growth agenda, the Turkish Central Bank has advanced the Turkish economy in a very innovative way.

Presentations:

Martin Raiser, “Turkey on the way to high income” (ppt)
Prakash Loungani, “The Turkish labor market: A few facts and figures” (ppt)
Laurence Ball, “Thoughts on Turkish monetary policy” (pdf)

Biographies:

Jose M. Fernandez serves as the Assistant Secretary of State for Economic and Business Affairs. He leads the Bureau that is responsible for overseeing work on international trade and investment policy; international finance, development, and debt policy; economic sanctions and combating terrorist financing; international telecommunications and transportation policies; and support for U.S. businesses and the private sector overseas. (BA in History, Dartmouth College; JD Columbia University)

Martin Raiser is the Country Director for Turkey of the World Bank. He worked for the Kiel Institute of World Economics and the European Bank for Reconstruction and Development, where he was Director of Country Strategy and Editor of the Transition Report. Since joining the World Bank in 2003, Mr. Raiser held positions as the Country Manager in Uzbekistan and Economic Advisor in Ukraine. In his most recent assignment, Mr. Raiser served as Country Director for Ukraine, Belarus and Moldova from 2008 until January 2012. He has published numerous articles in refereed economic journals and authored several books. (Degrees in Economics and Economic History, London School of Economics and Political Sciences; PhD in Economics, University of Kiel, Germany)

Laurence M. Ball is a Professor of Economics at Johns Hopkins University School of International Studies. He is also a Research Associate of the National Bureau of Economic Research (NBER) and a Visiting Scholar at the International Monetary Fund. He has held a visiting position at Harvard, and was an Assistant Professor at Princeton and New York University. He is the recipient of the Alfred P. Sloan Fellowship, the Olin Fellowship at the NBER. His research focuses on unemployment, inflation, and fiscal and monetary policy. (BA, Amherst College; PhD, MIT)

Prakash Loungani is the Advisor in the Research Department of the International Monetary Fund. He is also an adjunct professor of economics at Vanderbilt University’s Owen School of Management, and the Johns Hopkins University School of Advanced International Studies (SAIS). His research interests include: assessment of macroeconomic forecasting performance; understanding trade linkages among nations and regions; and modeling the impact of oil prices on the macroeconomy. (BA in Economics, Bombay; MA, PhD in Economics, Rochester)

Sumru G. Altuğ is a Professor of Economics at Koç University in Istanbul, Turkey and a Research Fellow at the Centre for Economic Policy Research in London, UK. She is also the Director of the KU-TUSIAD Economic Research Forum in Istanbul, Turkey. She has held regular or visiting Assistant Professor positions at Minnesota, Wisconsin, Duke and VPI and SU as well as chaired professor positions at Durham and York in the UK. She served as an Associate Editor of the Economic Journal between 2000-2003 and as a member of the Politics, Economics, Geography (PEG) College of the Economic and Social Research Council (ESRC). She has published papers in the areas of business cycles, inter-temporal models of consumption and labor supply, investment, productivity and growth, and banking and financial market phenomena. (BA, MA in Economics, Pittsburgh; PhD in Economics, Carnegie-Mellon)

Barış Ornarlı is the Washington Representative of the Turkish Industry and Business Association (TUSIAD). Prior to being appointed to his current position, Mr. Ornarli worked as a correspondent for the Turkish Service of the Voice of America (VOA). He also worked as a researcher for the Turkey Project at the Center for Strategic and International Studies (CSIS). (BS, MA in International Affairs, Florida State University)