I had the good fortune to attend a breakfast meeting with the Turkish Finance Minister, Mehmet Simsek, today. He is remarkable, and a good example of elites in today’s Turkey. He is young (44), well educated (M. Phil in Econmics from Exeter), fluent in English (7 years at Merrill Lynch in London and a year in New York with UBS), and thoughtful about the future.
He gave a presentation on Turkey’s “Soft Landing” — making clear how the economy has overheated from deficit financing, and how they plan to reign in credit. So far, it’s working well — and Turkey has growth (8% last year, likely 6% this year) and unemployment (lowest in 10 years) that any state in Europe would envy. What’s more, its banks are well capitalized (none failed during the 2008 global crisis), state debt is modest and falling, infrastructure is being built and improved at a stunning pace, and they are quite serious about making innovation their main source of future growth. They have impressive education initiatives, and are aiming to move up to #3 in Europe in design patents.
Simsek was also honest about Turkey’s problems. He acknowledged that corruption is still a serious issue that needs to be addressed more strongly. He also suggested that in the various conspiracy prosecutions, the courts are moving too slowly to convict the guilty and free the innocent. I asked about the importance of a free intellectual climate if Turkey hopes to advance through innovative ideas — and Simsek agreed that creativity requires greater intellectual freedom.
I left more convinced than ever that Turkey will be a power to be reckoned with. They have 18 million students in school today — more than the total population of 20 of the EU countries — and they are committed to upgrading their education and schooling as many young girls as boys (a target they achieved this year). They are investing in hydro, wind and solar power (the interior of Anatolia has Sahara-like conditions) to reduce their dependency on fossil fuel imports.
Most important, their leaders are keely aware that their future lies with joining the world, competing with Europe, and being a creative, innovation-driven society. They are just beginning, but it’s hard to argue with the incredible progress they have made in just the last ten years.