There are critical questions, but I will only give the good news today. Happy new year!

During the last commentary of 2012, I tried to assess the year from different perspectives. We can possibly draw to contrasting pictures, I argued as the economic developments of the year were conflicting. This piece will be released on the first day of 2013, so I will try to draw a purely optimistic picture. I want to go beyond transient positive developments such as a fall in inflation or a rise in capacity utilization ratio. I will try to raise longer-term and structural aspects of the Turkish economy.

So, let’s recall a familiar story. I have compared GDP per capita of Turkey and of developed countries several times before. I generally underscored that the income gap between developed countries and Turkey has neither widened nor closed. Over the last years, however, we saw a positive trend in this regard. The table below gives Turkey’s GDP per capita in proportion to the G7 average.

I will skip technical details. Just let me note that figures were specifically generated to allow international comparisons. I used the IMF database for this. The database did not have the data on Turkey for 2011 and 2012. But I needed those figures so that I could write an optimistic piece. So, I referred to World Bank’s database which has the 2011 GDP per capita data for Turkey. The figure for 2012 is my personal estimation.

One point directly catches the eye: the 2010-12 average is higher than the other periods examined. Ten-year averages might obscure real dynamics. If I used annual figures, we would see an upwards trend in GDP per capita starting with the 2005-2006 period. On the other hand, Turkey evidently has a long way to take given the ultimate goal to converge the above rates to 100. Still, it is doubtless that a major progress has been made in the recent period.

So, here are some questions that initially pop up: Is the progress satisfactory? In other words, has Turkey grown fast enough? Were there other countries that converged with the G7 much rapidly? Apart from the pace of convergence, was the recent upwards trend transient or permanent? Have Turkey initiated reforms to reinforce this trend? If the convergence were not rapid enough, what steps can be taken to speed up the process?

These all are critical questions. But I will skip them at this very first day of the year. As I said before, my intention was to highlight good news only.

Happy new year!

This commentary was published in Radikal daily on 01.01.2013