Sometimes who you are and how others perceive you are two completely different things. The GE Innovation Scoreboard on the perceptions of policy environments towards innovation in different countries tested for a harmony of global and domestic perceptions regarding policy environs of different countries. The domestic perception about the policy environment is how you see yourself, while the global chart measures how others see you. It is the comparison between global and domestic perceptions of the policy environment in Turkey and Israel that struck me. In both cases, the domestic participants in the surveys have an inflated view of their countries, specifically of their policy environments’ innovation-enhancing policy. 

Now, not all countries make this mistake. The Koreans for example, think that their innovation environment is worse than it is globally perceived. Countries like the UAE, Israel and Turkey suffer from an inflated view of themselves, which makes me think that this is a Middle Eastern phenomenon. But so what? We like to brag about ourselves and can easily get carried away. I once heard from a distinguished Turkish diplomat that everything starts out well in the Middle East, but then people get carried away and mess things up in the end. One might ask whether the diplomat was referring to Turkey’s transformation process or the wave of Arab revolutions. It doesn’t matter, really. 

But let me return to the policy environment issue and focus on the Turkish case today. There were three reports released about the policy environment in Turkey lately. The IMF just announced its short notice on the results of the regular Article 4 Consultations. That notice contains a great many caveats about the sustainability of macroeconomic stability in Turkey. The policy environment looks iffy, says the IMF. Second, the European Commission has also just released its annual progress report on Turkey’s accession process. The country is still not there. Our candidacy started together with Croatia, and look where our countries are now. We are not even half way through with the process. 

The third report is the government’s own three-year Medium Term Program. There you see a rosier picture of Turkey’s policy environment. A surge in the growth rate of around 100% has come down to 5% in three years. Growth will be fuelled by domestic consumption. While consumption rises through the government and private spending, domestic private savings will also go up. A rise in domestic private savings is also good for the current account deficit. But that’s easy to say and hard to do. 

So the first two reports give a sense of global perceptions of Turkey, while the third is an example of domestic perceptions. 

You see any disparities? I do. It is all about perception management, if you ask me.

This commentary was published in Hürriyet Daily News on 19.10.2013