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Turkey's 2023 Vision: Too Much Ambition

Alev Kayagil, G20 Research Group
December 2, 2015

In 2011, Turkish president Tayyip Recep Erdogan announced the Justice and Development Party's (AKP's) "2023 Vision" consisting of specific economic goals leading up to the country's centennial in 2023. Since Turkey's formation as a republic by Mustafa Kemal Ataturk, the country has developed to be among the top countries in international political economy. Erdogan's 2023 Vision outlined targets and major improvements in the areas of economic activity, energy, health care and transport as well as democratic reforms. Major economic goals set by the AKP government include reaching a gross domestic product (GDP) of $2.6 trillion as well as an average $25,0000 per capita income. The vision includes making Istanbul one of the top international financial centres and lowering the unemployment rate to 5%. Erdogan pointed to Turkey's rising automotive, iron and steel, textile and transportation sectors, and pointed out the large investments that have elevated Turkey in the international markets. Erdogan and Nihat Ergün, Industry and Trade Minister at the time of the announcement, cited Turkey's self-confidence as key to realizing these goals.

Setting domestic and national targets complements Turkey's foreign policy and external targets. In his speech in November 2011, Ahmet Davutoglu, then foreign minister, highlighted Turkey's external strategies in elevating itself to the top 10 by 2023. He said a "neighbourhood policy" of promoting integration, stability and security beyond Turkey's borders is needed for maintaining positive relations. He added that reaching the 2023 goal would mean Turkey would help in restructuring the regional order to help create a safe and prosperous environment that would facilitate achieving the domestic targets. Davutoglu's speech illustrates the obvious link between political and economic systems where regional stability and security can correspond to domestic prosperity and vice versa. Turkey's 2023 Vision of inserting itself among the top 10 economies means maintaining positive diplomatic relations within the region in order to further the country's economic and activity in terms of imports, exports and foreign investment.

Turkey's major goals of being an advanced democracy and having an even stronger economy may slowly be becoming a dream. If the political pillar is democracy and reforms with a proactive peace-oriented foreign policy, then why does Turkey find itself a political economic crisis today? The economic targets promised in 2011, not to mention the goals in the areas of democracy, education and unemployment, are proving to be unrealistic and overly ambitious, and falling short of initial predictions. Economic indicators over the last four years indicate that realizing goals for 2023 are no longer possible; indeed, Turkey will experience an economic downturn if political stability is not maintained.

Jean-Pierre Lehmann, professor of international political economy at Oxford University's Centre for Economics and Foreign Policy Studies, cites competition with other emerging economies for a spot in the top ten. "Turkey is not alone in dreaming of gaining greater economic power," Lehmann says, noting that countries such as India, Indonesia and Vietnam are also vying for top spots. Turkey aims to combining economic growth with political democracy, but this may take time. Policymakers and leaders must closely study the experiences of other high-growth countries, as Lehmann says. The AKP introduced the 2023 Vision in 2011 during the general elections that resulted in Erdogan's third term as prime minister. Critics says that the ambitious goals, which include a 10% yearly average growth rate to reach $2.6 trillion in GDP, are idealistic promises made by a leader seeking electoral success.

Lehmann also says that an obsession with growth targets, at the possible expense of society, could prove dangerous and harmful. The targets in Erdogan's plan are overly ambitious in the context of Turkey's per capita income of $10,000-$11,000 per year for the past seven years. The AKP's path to growth and social development has been inconsistent, with policymakers looking at these economic targets as an end rather than as a response to the more important question of what type of society Turks want, according to Lehmann. This is clearly apparent in the already stagnating economy, the high political instability and the tensions caused by unclear and ill-defined strategies in combatting citizen dissatisfaction.

The societal and political upheaval that has recently characterized the Turkish environment has will continue to hinder any progress in economic activity. This is apparent in the 2.5% drop in foreign direct investment (FDI) from 2014 to 2015, related to the decrease in the growth target from 4% to 3.3% in 2014 due to decreased investment. Political uncertainties after the June 2015 elections followed by the surge in hostilities with the Kurdish PKK have contributed even more to the volatile business and economic situation, alarming established and potential investors.

So what does the 2023 Vision mean to the Turkish government today, and how have these goals affected Turkey's relations with its investors? According to Tolga Taniş, the Hurriyet Daily News' Washington correspondent, internal tensions within the AKP leadership have created an atmosphere of risk among Turkey's economic and business partners. He says Prime Minister Davutoglu's meeting with Goldman Sachs in New York in March 2015 did little to reassure investors. On top of the regional risks relating to Syria and the growing PKK threat, Taniş says investors seemed unsure of who has the ultimate authority regarding the country's economy, thanks to a dispute between central bank governor Erdem Başçi and President Erdogan. Taniş questions whether it made sense for such a significant creditor and investors meeting to be conducted by the prime minister. This confusion is compounded by the falling FDI investments and internal party dynamics, creating an uncertain future for Turkey in achieving its 2023 vision.

It is difficult to say whether it is too late for Turkey to engage in structural economic and political reforms in meeting its ambitious targets. How will it be able to regain the confidence of its investors while regional and internal conflicts destabilize the economic landscape? At the G20 Antalya Summit, Turkey was able to provide concrete frameworks for public-private cooperation for investing in financial and developmental efforts while fully committing to the central theme of inclusivity. Turkey was successful in mainstreaming the Sustainable Development Goals in all its activities throughout its G20 presidency, with the summit serving as the culmination of its efforts in strengthening global economic and financial resilience. It remains to be seen whether the international efforts of the Turkish presidency can translate at the Turkish national level into regained trust and a stable environment.

Although Turkey's G20 presidency has come to an end, Turkey must continuing working toward its previously established 2023 targets. Turkey must look to link its 2023 goals to the strategic frameworks and initiatives made at the Antalya Summit in order to ensure best results going forward. Turkey, as one of the major emerging economic powers on the international stage, will need to learn from and at the same time, be a model for emerging economies.

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