The Complicated Legacy of Turkey’s “Miracle Decade”

By: Giorgi Tsintsadze ’17
The Complicated Legacy of Turkey’s “Miracle Decade”

Ankara University sociology professor Utku Balaban shares his insights on some of the social dynamics of Turkey’s rapid growth.

In the economic history of Turkey, the first decade of the twenty-first century is referred to as the “miracle decade.” Export-oriented trade and regulatory policies, coupled with global economic and geopolitical trends of the period, sparked rapid growth that resulted in a three-fold expansion of the Turkish economy in just ten years. While some dynamics of this growth are familiar and similar to those associated with emerging markets, others are unique and exclusive to Turkey.

Utku Balaban, an associate professor of sociology at Ankara University, spoke about “Industrial Development in Turkey during the 2000s” at Sage Hall on the Cornell University campus in Ithaca Sept. 19, 2016. A speaker for the Leaders in Emerging Markets lecture series, he was introduced by Lourdes Casanova, senior lecturer of management and academic director of the Emerging Markets Institute.

To understand the performance of the Turkish economy, Balaban explained, one has to understand the dynamics between big and small businesses. This is especially true for the manufacturing sector, which, has been responsible for a huge portion of growing exports — especially the garments industry. In this area, where small and mid-sized sweatshops dominate the scene, the interplay between businesses of different scale, which sometimes favor differing regulatory approaches, takes center stage. In these circumstances, policy makers and legislators are charged with the task of tailoring their instruments to the structural composition of the Turkish economy and the specific needs of its key sectors.

While some aspects of Turkey’s economic growth — including the decline of agriculture’s share in Turkish GDP and the move towards energy-intensive industries — are well understood and mirror those observed in Russia, India, South Korea and, most closely, in Brazil, other characteristics make Turkey an outlier among rapidly developing countries. Balaban explained that because social dynamics failed to catch up with economic growth, the country is now characterized by social conditions — especially in terms of education, employment figures and the makeup of the labor force — that are unlike those observed in the EU states. This regional disparity could be an issue for a country that has declared its intent to join the European Union. Given current dynamics, it has been estimated that it will take Turkey more than one hundred years to catch up with its Western neighbors in statistics like access to and prevalence of primary and secondary schools and participation of women in the economy.

While recognizing the lack of reliable data that makes it difficult to conduct the kind of research that is needed to develop robust theoretical and practical solutions, Balaban went on to illuminate some institutional problems that can be inferred from available information. In one example, Balaban described the counterintuitive, inverse relationship between employment and education: In Turkey, the more educated you are, the more likely you are to be unemployed. Overcoming this, he says, is a necessary step towards holistic socio-economic development. Navigating the country’s complex geopolitical context and calibrating unstable domestic politics — two volatile economic variables that have the potential to create major economic disruptions — as well as coordinating diverse sectors of the economy, are among the many challenges that modern Turkey faces in the aftermath of rapid growth.

After Balaban’s presentation, the audience in Ithaca and those joining the event from New York City were eager to ask questions and engage in a discussion. Topics covered in the Q&A included the complex historical legacy the current government has to cope with, deep-seated regional economic differences within the country, recent political woes, and Turkey’s EU accession plans.

About Leaders in Emerging Markets

The Leaders in Emerging Markets lecture series is co-hosted by the Emerging Markets Institute at the Samuel Curtis Johnson Graduate School of Management and by Cornell Tech. Lourdes Casanova, senior lecturer of management and academic director of the Emerging Markets Institute, notes in her introduction to this course that: “Emerging markets represent now almost 40 percent of the world economy and eight out of the 20 biggest economies are from emerging markets, with China as the second biggest economy in the world. As emerging countries are becoming more prominent in the world, MBA students need to have the knowledge and the tools to navigate its economic and business challenges. The course will also be looking at business strategies for emerging markets. Students will learn from a number of executives from companies working in and from emerging markets.” The lectures are delivered at Sage Hall on the Cornell University campus in Ithaca, and students in New York City participate via video conference.

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Giorgi Tsintsadze ’17 is an intern in Marketing and Communications at Johnson.


Utku Balaban

Utku Balban

Utku Balaban Utku Balaban is an associate professor of sociology and a faculty member of the Department of Labor Economics and Industrial Relations in the Faculty of Political Science at Ankara University. He obtained his BA degrees in political science and international relations and sociology from Boğaziçi University in 2002 and his PhD in sociology from the State University of New York at Binghamton in 2011. Balaban’s areas of expertise include industrial relations and urban transformation. As a fellow of European Commission’s Marie Curie Career Integration Grant”, Balaban has recently completed his field research on the industrializing cities in Turkey. He delivered a lecture about “Industrial Development in Turkey during the 2000s” at Sage Hall on the Cornell University campus in Ithaca on Sept. 19, 2016, as a speaker for Johnson’s Leaders in Emerging Markets series.


About Leaders in Emerging Markets

Lourdes Cassanova

The Leaders in Emerging Markets lecture series is co-hosted by the Emerging Markets Institute at the Samuel Curtis Johnson Graduate School of Management and by Cornell Tech. Lourdes Casanova, senior lecturer of management and academic director of the Emerging Markets Institute, notes in her introduction to this course that: “Emerging markets represent now almost 40 percent of the world economy and eight out of the 20 biggest economies are from emerging markets, with China as the second biggest economy in the world. As emerging countries are becoming more prominent in the world, MBA students need to have the knowledge and the tools to navigate its economic and business challenges. The course will also be looking at business strategies for emerging markets. Students will learn from a number of executives from companies working in and from emerging markets.” The lectures are delivered at Sage Hall on the Cornell University campus in Ithaca, and students in New York City participate via video conference.

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