WHY DO WE HAVE LESS DEVELOPED ECONOMY?

Certainly, you must have read many articles so far trying to explain the reason why Turkey has a less developed economy. This time, I am going to try to look at the matter from two key perspectives of the development theory.

One of the most important approaches in development theory is associated with the private sector:

“No progress is possible without investing in human capital…”

That is to say, investing in machinery would not help increase productivity unless you develop your employees’ skills and offer them sustainable learning activities to create performance improvement. However, companies in Turkey sadly can’t manage to keep up-to-date with the latest trends in their sector.

Trying to improve human resources management by taking into account only the demands of “blue collars” is utterly outdated. Global firms now prefer to hire candidates that equipped with good knowledge of design, branding, continuous innovation, sales, marketing, collection, and logistics.

Despite the fact that the A.I. is being used in many aspects of manufacturing today, it can be seen that my statement above still remains valid. Pre-manufacturing and post-manufacturing services always add more value to products and services. Therefore, improving the skills and abilities of employees working in manufacturing and production is a must.

The world is already moving towards multi-clouded and fully automated Industry 5.0 environment even before Turkey was able to understand Industry 4.0. The value of “factory production” activities within overall prices of goods and services in the new world order has already fallen below 15%. As I mentioned above, the factors that determine the price of goods and services are these pre-manufacturing and post-manufacturing services and activities. Those who fail to offer their customers these critical services in a proper manner are sadly destined to remain at the bottom of value chain. This being the case, it seems unlikely for Turkish private sector to lead the economic development.

Now, let’s take a quick look at the second key perspective of the development theory:

“The State should address unmet infrastructure needs to reduce production costs in manufacturing businesses”.

So, the development theory suggests that a very critical role must be performed by the Government, in other words by the public sector. According to the theory, the fundamental duty of a State is to build the necessary infrastructure to ensure a decrease in producers’ costs. That is to say, it seems utterly unlikely to achieve real development by building bridges with poor vehicle travelling/passing rate because they are expensive, or expensive toll tunnels, airports so large that they make people waste their time and energy, unnecessarily large hospitals, or public buildings and governmental offices. Such attempts were made before, especially by the totalitarian leaders of the WWII era who were living on the edge of extreme modernism.

Atatürk had foreseen that Hitler’s and Mussolini’s delusions of grandeur would lead to massive destruction of Germany and Italy. Atatürk’s warnings for the collapse of Nazi Germany are also held by the National Archives of the United States today. According to Mustafa Kemal Atatürk, the founder of Turkish Republic, the three pillars of economic development are education, justice and freedom.

Today, these three pillars are referred to as major musts that must be built upon new structural reforms. The longer we delay these reforms, the less chance we have of achieving development.

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