Monday, June 14, 2010

Weekly Hurriyet Column: Looking for Turkey's Future

Below is the unedited version of my column for this week. You can read the final version at the Daily News website, but since I have been editing my columns myself on the Daily News website since March, you won't see much of a difference between the two. The title is not really supposed to be a cheesy movie reference, but I was nevertheless inspired by two movies, one an interesting Al Pacino piece, the other a recent pick.

Coming to more serious matters, there are a couple of points I need to clear up: I did my interviews with Martin Wolf and Kishore Mahbubani along with colleagues from the Daily News, so the credit is not entirely mine. As for Turkey and the EU, I wasn't really trying to entice my Daily News readers into the blog; I just ran out of space before I could explain Martin Wolf's point. Anyway, Dr. Wolf is arguing that Germany and France see themselves as the owners of the EU and so will never have a large country like Turkey join and have a lot of influence.

Martin Wolf also made several very interesting points during the interview, but out of respect to my colleagues, who will publish an interview soon, I am holding onto those for now. If they decide not to publish the interview, I will just post an addendum in the next couple of days. Note that they also published a news piece on the conference, which I deliberately did not read until I sent in my column on, so sorry for the repetitions.

Anyway, on to the column:

One of the perks of being (or pretending to be one in my case) a journalist is that you get to follow interesting conferences.

So when I heard that Financial Times Chief Economics Commentator Martin Wolf was in town to give a speech at the Garanti Future Summit, I was quick to sign up. At the IMF-World Bank Meetings in Istanbul, he had shared deep insights, not only during my interview with him and in the roundtables he was moderating, but also in the seminars where he was in the audience. Dr. Wolf was as brilliant and captivating as ever, but it was the second speaker who really stirred up the floor.

Go East…

A charismatic speaker himself, Prof. Kishore Mahbubani, Dean of the National University of Singapore’s Lee Kuan Yew School of Public Policy, explained the reasons behind “The Irresistible Shift of Global Power to the East,” as his latest book is aptly titled. According to Prof. Mahbubani, Asia is finally on the rise again because Asian countries are implementing the seven pillars of Western wisdom: free markets, science & technology, pragmatism, meritocracy, culture of peace, rule of law and education.

As Profs. Asaf Savas Akat and Fuat Keyman, two of the designated discussants in the conference, noted, it was interesting that democracy was not one of Prof. Mahbubani’s seven pillars, especially given that recent empirical research has found a robust relationship between democracy and growth & development. When I asked him about this point during our interview, Prof. Mahbubani seemed to question the direction of causality, noting that all developing countries would eventually become democratic. As countries prospered, the booming middle classes would ensure a transition to democracy in his view.

Prof. Mahbubani also elaborated on the significance of his seven pillars for Turkey, underlining free markets, pragmatism and education as the most important ones. Having managed a year-long World Bank project on higher education and authored a report on university-industry relations, I find it impossible not to agree with his third pillar, but I am not sure his prescription of sending more students abroad is the right one, as Turks are already flocking to graduate programs in the U.S. As for his other two pillars, based on recent work on Turkey’s binding constraints, in which I participated as well, rule of law and science & technology could have been better picks.

…For the West doesn’t want you

Martin Wolf shared Prof. Mahbubani’s optimism of Asia and pessimism of Europe, both of which came under heavy fire from most of the discussants. But, as a Be┼čiktas fan, I tend to see the world in black and white rather than black or white. While the East is definitely rising, as Morgan Stanley’s Stephen Roach, who will soon join the faculty at my alma mater, underlines in the excellent essays in his recent book, Asia has quite a bit of challenges ahead. To his credit, Prof. Mahbubani is well aware of those challenges, which he discusses in his latest book as well.

Dr. Wolf also reinforced his long-running theme of correcting global imbalances during his presentation. Despite some recent research questioning his savings glut hypothesis as their cause, I, adopting Prof. Mahbunani’s pragmatism pillar, am more interested in policy implications of correcting the imbalances. In other words, how do we get the Germans and Chinese to consume more? This question is of vital importance for Turkey as well, as increasing the savings rate is often given as a panacea-for-all. I have yet to find a convincing answer, not only for Turkey, but also for the world economy.

Last but not the least, Martin Wolf thinks the EU will never get Turkey in, but you’d have to get into my blog to learn why...

Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at

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