Economic Growth Essay on Turkey

Economic Growth Essay: Introduction

Turkey is a country that is recognized as both developing and developed, and at this point in time, in my opinion, it is the best example to give in a paper. The reason for this is that Turkey is a country we see or hear almost every day on the news. It has problems with Russia, the U.S., the UN, NATO, and many others. Thus, it faces many challenges, both economically and politically. In this paper, I will examine many problems Turkey is currently facing and how different policies can help the situation.

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Just like Russia, Turkey is full of corruption, and its domestic industries are either corrupted or non-existent. In fact, corruption is such a big problem that prevents Turkey’s accession to the European Union (EU). Yet, most importantly, corruption slowed the country's business activity and economic growth. To name but a few, it affects the free trade as domestic businesses can bribe officials to raise tariffs, it affects the competitive domestic market for the same reason, people can use bribery or high-rank officials to gain favoritism from the government, thus, encouraging monopolies (“Turkey’s Corruption Report,” 2019). Apart from the economy, this corruption affects education as corrupt officials decrease the educational spending and save it for themselves for personal use (“Turkey’s Corruption Report,” 2019). This situation, naturally, decreases the amount of investment the country gets from investors. It is a dangerous and unsure place to put your money into. Unfortunately, the judicial system is not working correctly either. Judiciary is known to not be independent and does not have the ability to settle disputes or challenge regulations. It is relatively common that bribes and irregular payments are made in return for favorable judicial decisions. After corruption, the economic crisis comes second on Turkey's problem list.

For more than three years now, Turkey has been in a painful economic crisis. The most recent one is the currency and debt crisis that happened in 2018. There were two reasons for this issue. The first one was the excessive amounts of private foreign-currency-denominated debt, and the second is President Recep Tayyip Erdogan's unorthodox policy about interest rate policies. According to some analysts, the Trump administration's tariffs on Turkish steel and aluminum also had an effect on this crisis (Goodman, 2019). This crisis put the inflation rate up to the double digits where it still stays. Many of the domestic companies and factories went bankrupt. Thus, putting the already-bad economy of the country in a loophole.

Looking from this standpoint, the best policy that can improve the country's situation is the crackdown on government corruption. The reason for this is that all the problems listed above are related to corruption in one way or another. Most importantly, even the government is tied to corruption. The dominant party, ever since coming to power mysteriously, has never lost power. Even in impossible elections, the party kept its power, not by only cheating the vote counts, but also putting officials and thugs in voting buildings to block voters from choosing another ruling party (Goodman, 2019). Therefore, eliminating corruption in every part of the country can put the country back in the developed countries' group. Both in the long-term and short-term, eliminating corruption improves education, economy, domestic free market and can even attract foreign investments as most of the investors left the country because of the government (Goodman, 2019). The least effective would be giving away condoms as Turkey is geographically huge and constantly needs an educated young workforce. Currently, the government supports families that have more than three children; thus, high birth-rate improves the current situation in every way. The younger generation is more aware of their surroundings than the older generation.

Economic Growth Essay: Conclusion

Coming to part two, the first option is the unrestricted international aid to help build a power plant. This can be seen as catching up growth as it is not a new discovery and can be a fast-paced change in the economy. This is consistent with the Solow model, as many countries already did. Yet, it is definitely not connected with the modern growth theory as building a power plant is, most of the time, not connected with any profit hopes of individuals but rather the public economic good for the country. The second option of providing aid for a power plant that is dependent on democratic reforms is different. The reason for this is that it is neither consistent with the Solow model, nor with the modern growth theory. It does not involve any catching up growth or cutting-edge growth, nor does it involve any individual profit gains for the public. The third option of reductions in trade restrictions involves both the Solow model and the modern growth theory because while improving the general country's economic situation, it can create much cutting-edge growth and benefits the individual investors by creating many opportunities to invest in and increase profits.

References

Turkey Corruption Report. (2019.). Accessed on Gainintegrity.com

Goodman, P. S. (2019, July 8). Turkey's Long, Painful Economic Crisis Grinds On. Accessed on