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The deadliest of the seven deadly sins: The role of “pride” in Turkish economic policymaking

While vanity is definitely my favorite sin, I would argue that pride is the deadliest of the seven deadly sins. After all, it caused Lucifer to fall from Heaven.

An ardent Turkey researcher shared with me, over lunch during my London trip in the summer of 2011, that government officials were falling under the spell of this sin. Since then, I have come to realize how accurate his observation was. During Nov. 22’s Financial Times Turkey Summit, the economy’s top brass were almost racing with each other to demonstrate their arrogance.

Here’s the intro. to my latest Hurriyet Daily News (HDN) column, on how “pride” is affecting economic policymaking in Turkey. You can read the rest of it at the HDN website.

Other than the Turkey expert I mention at the very beginning, the column was also inspired by the comments of an economist friend, who was making similar remarks about the Central Bank- with most of which I agree. But since no one from the Central Bank was at the FT conference, and I was out of space anyway, I did not get to mention them:)

As for the $ 25,000 2023 GDP/capita target, I am not saying it is not achievable. I just don’t see any changes in economic policymaking that would make that goal realistic. It is very easy to throw a goal in the air, but more difficult to come up with a realistic plan towards achieving that objective, and even more difficult to implement that plan. And if you are wondering how I figured out that Turkey would have to grow 6 percent per year to hit $25,000 by 2023: It is quite simple, but a reader emailed me that Seyfettin Gursel of Turkish daily Today’s Zaman recently went through that calculation: His methodology is exactly the same as mine, down to the Balassa-Samuelson effect, so have a look at that- his conclusion is “at least a yearly average of 5 percent real GDP growth”. And BTW, he also concludes, just like me, that the 2023 GDP target is unrealistic without further structural reforms…

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Richard Wood Richard Wood

Richard has published papers on wages policy, the taxation of financial arrangements and macroeconomic issues in Pacific island countries. Views expressed in these articles are his own and may not be shared by his employing agency. He is the author of How to Solve the European Economic Crisis: Challenging orthodoxy and creating new policy paradigms