Making ends meet
We often see evidence of how income is not evenly distributed in Turkey. Some spend thousands per night at a top Bosporus nightspot, while others struggle to feed their children.
Turkey, during the past decade, has experienced a cycle of boom and bust. However, the government has managed, through the implementation of monetary and institutional reforms, to bring about economic growth since 2000. Different from the days before privatization (e.g., pre- 1995), the private sector has been growing successfully and continues to attract significantly more foreign direct investment (FDI).

To be more specific, research conducted by the World Economic Forum, titled "Biodiversity and Business Risk: A Global Risks Network Briefing," states that the reforms enabled the country to reach average growth of almost 7 percent during the period 2002-2007; and FDI went from $1.1 billion in 1995 to $21.7 billion in 2007. You may wonder how this is affecting the lives of the average Turk. If you travel around İstanbul you will observe conspicuous consumption living side by side with poverty.

Some excellent research conducted by Ali Çarkoğlu, professor of political science at Sabancı University's faculty of arts and social sciences, was released in May 2010 by the Turkish Economic and Social Studies Foundation (TESEV). The survey sheds light on the attitudes of Turks to social justice in Turkey.

Let me share some of the key findings:

· 92 percent of respondents believe there is inequality in income distribution in Turkey.

· 90 percent of respondents said the government is responsible for reducing the unequal distribution amongst individuals.

· 91 percent said the government should provide a significant amount of aid to the unemployed.

· 75 percent said the government should provide more aid to those in need.

The first result is not surprising. However those of us from US or European backgrounds may be surprised by the following three which state that Turks expect positive action from the government and will choose their leadership according to this criterion. There are clear political implications of the research, which gives clues to the popularity of the Justice and Development Party (AK Party) in recent years. The refocusing of the Republican People's Party (CHP) on working class issues also seems a smart political move based on the survey's results.

Some other highlights to do with taxation indicate:

· 67 percent of respondents said those with a higher income should pay higher taxes (NB the breakdown of this answer between the haves and the have-nots would have been very interesting, but wasn't given in the free summary of the research).

· Only 5 percent of respondents said the rich should pay less tax.

· 47 percent believe the higher income groups are paying very little tax under the current tax structure.

Çarkoğlu concludes that people with a lower income pay a disproportionate amount of tax, due to the high levels of KDV (value-added tax) on consumption. In case you not aware Turks pay high prices for gasoline; it is more than double what it costs in the United States, partly because of the added taxes on it.

Unlike many European nations, Turkey has a very young population with one-third of the population under age 25. Turkey is experiencing a youth bulge and faces a challenge to provide education and jobs to ensure growth and stability. Professor Çarkoğlu compares the current social position of youths with that their parents:

· 49 percent said no difference

· 31 percent said lower than parents

· 20 percent better social status than parents

Çarkoğlu asks the question: "What brings success?" and the results revealed that 80 percent stated that receiving a good education is key. This is followed in order by working hard, meeting the right people, having a well-educated parent and being ambitious.

A couple of questions revealed the following:

· 80 percent think that bribing people does not bring success.

· 70 percent think gender makes no difference to success (I wonder about the split of this response. It would be interesting to know the response between male and female.).

Unlike in many Western countries, Turkish university students often do not work while enrolled at university so they lack work experience. Çarkoğlu's research shows that a staggering 39 percent over age 18 said they had never worked (i.e., not just unemployed now, but have never worked). A total of 89 percent said their mothers were at home when they were aged 15 to 16. (i.e., while the child was this age their mother did not work). Only 10 percent said their mother worked outside the home when they were teenagers.

These days it is hard for many to make ends meet. Though the rising middle class is increasing its spending power, it seems that discretionary spending is still low, and food and fuel costs make up a relatively high percentage of household expenses.

"The delivery of price stability over the medium term is the best contribution that monetary policy can make to sustainable economic growth, job creation and prosperity. -- Jean-Claude Trichet, president, European Central Bank

Last Modified: 2012-11-19 10:00:01
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