Erdogan’s Turkey

Recep Tayyip Erdogan was inaugurated as Turkey’s first directly elected president on August 28.

He had previously served as the country’s prime minister since 2003 and overseen a lengthy economic boom.

We wonder: Where does Turkey now rank in terms of global economic competitiveness?

A. 17th
B. 44th
C. 53rd
D. 69th

A. 17th is not correct.

Turkey — a country situated at the meeting points of Europe, Asia and the Middle East — has the world’s 17th largest economy, based on World Bank data. With 75 million people, Turkey has the world’s 18th largest population.

With a GDP of $820 billion in 2013, Turkey ranks just behind Indonesia — the world’s largest Muslim-majority country (250 million people) and economy ($866 billion) — and just ahead of the Netherlands, the sixth-largest economy of Western Europe.

On a per capita basis, Turkey’s economy ranks much lower. Turkey’s per capita GDP — at $10,950 — is only the world’s 54th highest, ranking it below Panama and just above Malaysia.

Since 2003, when Recep Tayyip Erdogan was first named prime minister, Turkey’s economy has more than doubled in size. Erdogan won praise for presiding over a moderate Islamic democracy that sought closer political and economic ties with Europe and the West. Investment from Western nations was an important source of Turkey’s economic boom.

In recent years, Erdogan has faced increasing criticism for undermining the constitutional limits on his authority and for corruption scandals involving members of his cabinet. These worries about Erdogan’s leadership – along with ongoing conflicts in neighboring Syria and Iraq – have led to a significant slowing of Turkey’s economic growth.

B. 44th is correct.

Turkey ranks 44th in overall competitiveness in the World Economic Forum’s 2013-14 Global Competitiveness Index, an annual ranking of the economic potential of the world’s economies.

The World Economic Forum (WEF) considers several factors — including macroeconomic conditions; the quality of public institutions, infrastructure, education and health care systems; and levels of technology and innovation.

While Turkey’s current rank is down a notch from its place in the 2013 index, it is up about 20 places from a decade ago when Turkey ranked 63rd.

To improve its competitive position in the global economy, a primary area of concern is the country’s educational system. Less than 20% of Turkey’s working-age population had obtained at least a high school diploma.

The WEF also cites labor market flexibility and the efficiency and transparency of public institutions as other areas of concern.

C. 53rd is not correct.

Turkey has historically struggled with significant levels of corruption in its public and private sectors. In Transparency International’s 2013 Corruption Perception Index, Turkey ranked 53rd out of 177 nations surveyed.

Based on this measure of public corruption, Turkey compares favorably to its regional neighbors in Eastern Europe. Greece, for example, ranked far lower (80th) — and Romania, Bulgaria and Ukraine all ranked below Turkey.

Turkey’s level of perceived public-sector compares even more favorably to the other Muslim-majority nations in the Near East and Middle East. In TI’s 2013 index, neighboring Iran ranked 144th, Syria 168th and Iraq 171st.

In the aftermath of the Arab Spring, Turkey was held up as a model for how to combine moderate Islam with democratic principles and the pursuit of economic prosperity. However, in the three years since, Turkey itself has been plagued by public corruption scandals linked to high-ranking members of Erdogran’s ruling AK party.

Corruption puts a drag on economic growth in many ways. For example, the need to bribe officials for permits and licenses makes it more difficult to start and expand businesses. Crony capitalism — in which public officials favor business associates with contracts and favorable regulations — also makes it more difficult for start-ups to compete with existing businesses.

D. 69th is not correct.

Turkey is one of the world’s eight major emerging market economies, along with Argentina, Brazil, China, India, Indonesia, Mexico and South Africa. These countries have a combined GDP that is roughly equal in size to the U.S. economy, the world’s largest.

In the United Nations’ 2014 Human Development Index — a composite ranking of countries based on their performance in terms of income, education, life expectancy and other social indicators — Turkey ranked 69th of 187 nations.

That places Turkey in the middle of the second of four tiers of nations ranked from “very high,” “high,” “medium,” and “low” levels of human development.

As recently as 2002, an estimated 30% of Turkey’s population lived below the country’s poverty line of $4.30 a day. After a decade of strong economic growth and an increase in government spending on social insurance programs, that figure had been reduced to 3.7% of the population.