Economy, News

Building Turkey's new economy

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Over the past two decades, Turkey’s growth has positioned it as a key trading partner for both the U.S. and Europe, but more needs to be done to sustain this growth. This was top of the agenda last week when the Brookings Institution hosted a panel on Turkey’s emergence as a dynamic, growing economy and export powerhouse. It was a welcome and important discussion. The panel talked about the policies that have led to this success and what Turkey needs to do to keep growing. The talk was led by moderator Kemal Kirişci, a senior fellow at Brookings and the director of the institute’s Turkey project.

Over the past two decades, Turkey’s growth has positioned it as a key trading partner for both the U.S. and Europe, but more needs to be done to sustain this growth. This was top of the agenda last week when the Brookings Institution hosted a panel on Turkey’s emergence as a dynamic, growing economy and export powerhouse. It was a welcome and important discussion. The panel talked about the policies that have led to this success and what Turkey needs to do to keep growing. The talk was led by moderator Kemal Kirişci, a senior fellow at Brookings and the director of the institute’s Turkey project.

Indeed, as the discussion noted, in the past several years, Turkey has come out ahead as the rest of the world has struggled economically, including a near-double-digit GDP growth in the wake of the global financial crisis. After this spurt, the economy continued to grow, hitting 4 percent last year. Since the global economic crisis, Turkey has created more than 5 million jobs, while most countries saw a net job loss. This total is more than the number of jobs created in the 15 previous years. This growth is the direct result of the expansion of industries that have benefited from these new infrastructure projects. While Turkey is already seeing the benefits of these investments, more is still to come.

After nearly three years of construction, in just a few weeks, the new Nissibi Euphrates Bridge will open. Now the country’s third-longest suspension bridge, it will improve transportation for a region that had become isolated due to the creation of the Ataturk Dam in 1992. This is just the latest example of Turkey’s significant investments in infrastructure that are boosting the country’s economy and improving transportation and access to markets for its citizens. In 2013 alone, Turkey invested $26 billion in infrastructure projects.

One of the largest projects is the Istanbul New Airport, which is planned to be the largest airport in the world, with an annual capacity of 150 million passengers. The new airport will help to capitalize on the growing trend of Turkey becoming a hub for travel between Europe and Asia. Istanbul’s airport hosted more than 51 million passengers in 2013, a 14 percent increase over the previous year. The increased capacity will help to make Turkey an international air-transport hub. Long the crossroads for both land and sea transportation between the East and West, Turkey will soon be reaping the benefits of increased regional air travel as well.Turkey is also cementing its position as a regional transit hub through investments in railways. The country has promised to invest $45 billion in high-speed rail over the next decade, including a rail line that will reduce travel time from Ankara to Istanbul to only three hours. The country has also agreed to build several new railway lines with China, including a project that will create an uninterrupted rail line from China to Europe.

Beyond transportation, Turkey has also made other critical infrastructure investments that will continue to pay dividends. Since 2004, it has nearly doubled its electricity generation capacity to keep up with the demands of its growing economy. It has also constructed nearly 2,000 new healthcare facilities over the past decade to help improve access to healthcare for its population.

These policies are setting Turkey on the right path, and creating the opportunity for the country to become a model for economic growth. Continuing this trend, however, will require continued investment. Providing increased access to markets for previously disconnected regions and increasing connections to Turkey’s neighbors, whether by rail or air, will help make Turkey an appealing investment and trading partner, both in Europe and in the U.S., and help the country to continue to grow its economy and improve the welfare of its citizens.

Resource: Daily Sabah, March 20, 2015

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