Can Turkey compete?
Turkey’s business environment is not keeping up with its competitors. Here’s why
The International Institute for Management Development (IMD) and the World Economic Forum (WEF), two organizations that measure the economic competitiveness of countries globally, recently announced their ‘World Competitiveness Yearbook’ and ‘Global Competitiveness Report’. Turkey moved up one spot in the rankings in the IMD’s competitiveness Yearbook, to 46th among 63 countries compared to last year.
The U.S., Hong Kong and Singapore took the first three spots. Over the past five years Turkey’s position has fluctuated, ranking 40th in 2014 and 2015, 38th in 2016, 47th in 2017.
In the Geneva-based WEF report, Turkey rose to 51st from 53rd among 137 countries. Switzerland, the United States and Singapore were the top three countries ranked according to their competitive power.
Inflation among the main challenges
The WEF listed the high rate of inflation as one major weakness in Turkey’s economy, as well as the uncertainty of its legal framework, fiscal tightening due to global trends, labor instability, geopolitical risks and terrorist incidents. Areas where it said improvement had been made included GDP per capita, GDP Growth and Gross Fixed Capital Formation.
Global competitiveness was measured by the WEF based on the performance of 12 indicators, such as the macroeconomic environment, health, primary education, and technological innovation. Despite making modest gains over the past year, the report noted that Turkey was ranked 43rd in 2012 and has fallen behind the competition since then. However, it also stated some promising advances had been made in technological upgrades and mobile broadband usage since 2015. The report suggested Turkey should develop its institutional framework, continue to eliminate practices in the labor market that dampen productivity and strengthen the balance and impact of financial markets.