Blog
Model United Nations Development Programme 2011, Istanbul, Turkey
7th March 2011
In early March, I was privileged to have been invited to the Koç School in Istanbul, Turkey. The students I met were absolutely amazing – academic geniuses with real personalities and humbleness. This blog is dedicated to them…
In 2001, Goldman Sachs employee Jim O’Neill coined the term BRIC to suggest that Brazil, Russia, India and China would dominate the global economic stage by the year 2050. O’Neill has recently come up with a new acronym for the next wave of economic dominance: the MIST economies (Mexico, Indonesia, South Korea and Turkey).
Looking at Turkey, some of the opportunities and challenges facing the country include the following:
• Turkey has a booming economy with inflation at its lowest in 41 years (inflation is 4.8%, down from 30% back in 2002)
• GDP per capita has more than doubled in the past decade
• Turkish contractors now rank only second to China and are building everything from airports to cement factories across the country and the Middle East (BBC).
• Simon Roughneen, of The Guardian, reported that in 12 years’ time (2023), Turkey will more than double its arrivals numbers to 63 million, making it one of the world’s
tourist destinations. Tourism revenue has tripled in the past 10 years.
• Turkey is expected to grow by 8.2% per annum over the next 3 years (Invest Turkey)
• Turkey is expected to be the fastest growing economy of the OECD members during 2011-2017, with an annual average growth rate of 6.7% (OECD)
• It’s all part of Turkey’s plan to rise up the global economic ladder. Turkey’s unique competitive advantage is its location - Istanbul is a natural bridge between Europe and Asia.
But there are plenty of challenges facing Turkey, including:
• Admission to the EU
• Infrastructure investment – there’s plenty of construction work going on in Istanbul!
• Wide economic disparities between more affluent areas, such as around Istanbul, and the country’s east and north-east. Per capita incomes differ by a factor of 10.
• Youth unemployment is as high as 25% according to the OECD
• Asian rivals, such as Hyundai, for exports of motor vehicle and textiles
• A low female participation rate of just 22% - well below the global average of 53% (Istanbul Economics)
So will O’Neill be correct again about the MIST economies? Fund managers in Hong Kong and Canada think so – they’ve already launched several mutual funds focusing on the Turkish economy in 2011…