Turkey used to be known for its political turmoil. Investors used to see the country as an unstable nation with a radioactive financial market that sensible fund managers must stay away. The Judiciary has even tried to ban a ruling party. A decade ago, Turkey’s outlook was very bleak.
Speculative trading on bonds and currency by major Turkish banks permeated the financial crises that rocked Turkey.
Not anymore. Turkey’s economic fundamentals are very good and the economy looks very promising. The population has a solid middle class with a good manufacturing base. Industrial clusters are emerging and researches in emerging technologies like biotechnology and nanotechnology are growing.
Besides, it has an untapped service industry, especially in finance, and the population is very young.
Their fundamentals are so good that this nation has attained a fairly relative stable inflation and interest rate. This is something which was not possible in the political crises ridden old Turkey. While Greece and Bulgaria are in crises, Turkey came out of the global recession with minor scratches.
Right now, Turkish banks will be buying some distressed Greek banks.
This country did not bailout a single bank. Also note that Turkey had lived on IMF loan for years. The whole theory in some African quarters that a loan cripples country is not valid here. The problem in Africa is that when loans are taken, politicians corruptly waste them.
You can take loan and come out stronger if you use the loan properly. Brazil was able to emerge a stronger nation despite its currency crises. Loans helped them.
I have come to understand Turkey more while working in my new book, Nanotechnology and Microelectronics: Global Diffusion, Economics and Policy, where one of the contributors discussed the technology transfer and diffusion paradigms of nanotechnology.
What happened? Few years ago, the duo of Prime Minister Recep Erdogan and his Deputy Ali Babacan engineered some reforms. They privatized some state firms, reduced government spending, strengthened and enforced financial and capital market regulations, and recapitalized the banks.
It is important to note that these were done transparently, unlike similar programs in Africa where reforms are designed to manipulate systems. The banking reform in Nigeria was done; but the regulation was so weak that after less than six years, the government had to bailout some banks.
The privatization program in Nigeria was executed so fraudulently that some firms were sold to politicians at extremely discounted prices. There have been allegations of rigging the nation’s stock exchange after the country’s richest man (according to Forbes) was involved in questionable trading on competitor’s equities.
So, Turkey did more that reforms; they followed up and executed them very well. Export is up; FDI continues to flow into Turkey. GE, Ford and host of many multinational giants have called Turkey home for producing their products and this has helped the nation’s manufacturing climate.
Africa must note that nothing comes by chance in this century. You must have plans. Turkey has positioned itself through education, reforms in capital markets, and other ways to attract global resources.
The world has heard them and the country is doing well. It is estimated that Turkey will be the next League of Nations after the BRIC countries of Brazil, Russia, India and China that will propel the world gross product.
It is time Africa revamps its leadership and provide roadmaps that can help citizens make Africa great. We must bring people that can engineer new ideas to position the continent instead of recycling people which have not added any value for years. There are many smart and committed Africans around the world. It is time we get their ideas to move the continent out of our present stasis.