| Mehmet Murat BEKDİK | |
| Editor-in-Chief |
|
WHO WILL BE THE MASTERS OF THE WORLD ECONOMY IN THE NEXT TWENTY YEARS? |
When raw material of Brasil and Russia; workpower and low costs of China and advantage of technological infrastructure of India come together, there appears an unshakeable economic power. There is another common property of these four countries. It is the possibilities they offer to the investors… In the recent years BRIC (Brasil, Russia, India, China) countries are gradually removing the obstacles in front of the foreign investment. The situation is almost the same as these countries. Tax and insurance liabilities are fairly low. In China the foreigners coming to China for investment are of great value. Local administrations are competing to attract investment to their own regions. Brasil supports the companies especially the ones to make technological investment. 70 % of these companies are encouraged by the government. When we have a direct look into the foreign investment data this situation obviously appears. In 2005 China attracted 72.5 million dollar of foreign investment and Brasil has attracted 15 billion dollar of foreign investment directly.
When we have a look at Brasil with Gross National Product of 620 billion dollar, a population of 188 million, export of 115 billion dollar, import of 78 billion dollar, inflation of 6.9 employment of 9.8 % and current balance figures of +14 billion dollar from a sectoral aspect, we find that the economy of the country is considerably developed in agricultural production. The agricultural sector composes the 20 % of the workpower and one third of the Gross National Product. Today Brasil is the leading producer of sugar beet, coffee, tropical fruits, frozen nectar. Another advantage of the country is its affluence in raw materials. Its iron reserves is equal to the one third of the total reserves in the world. And also it is affluent in underground mines such as bauxite, coal, zinc. Brasil has made considerable progress in the industrial sector especially upon the introduction of the liberalization after 1990’s.
As of the end of 2005, India, with a gross national product of 719 billion dollar, a population of 1 billion and 95 million, export of 90 billion dollar, import of 120 billion dollar, inflation of 4.2 %, unemployment of 8.9 % and current balance figure of 8.9 billion dollar, has involved into an economic growth trend after it opened the investments of infrastructure in the public sector for tender. In this region with an area of 3.2 billion km2 especially the infrastructure investments are also considered as an immense potential. For this reason all the foreign investors such as English, German, American ones run for especially the infrastructure investments in these immense potential region. Furthermore, India bears the role of the “factory of the world” in technological investments.
Russian economy; with a gross national product of 740 billion dollar, a population of 142 million, export of 245 billion dollar, import of 125 billion dollar, inflation of 12.7 %, unemployment of 7.6 % and current balance figure of 84.25 billion dollar; has grew 6.4 % on average continiously for seven years since the depression in 1998. Besides the increasing oil prices and low-value ruble, infrastructure investments increasing since 2000 and increasing income level of the people have also contributed to this growth. In the last five years, investment expenses has increased 10 % and income of the employees has increase 12 %. During this period income level of the especially middle-class has increased while the liabilities of the country decreases steadily. The proportion of the liabilities of the country to Gross National Product has decreased from 90% to 31%. The income from oil export has caused the reserves of foreign exchange to increase from 12 billion dollar in 1998 to 180 billion dollar in 2005.
Chinese government; with a gross national product of 8 trillion 883 billion dollar, a population of 1 billion and 314 million, export of 752.2 billion dollar, import of 631.8 billion dollar, inflation of 1.8 %, unemployment of 9 % and current balance figure of +160.8 billion dollar; widely opens its doors to the companies planning to invest in their countries.Consideraion of the tax and insurance liabilities reaching 109 % in Turkey is 9 % in China. With its population of more than 1.3 billion, China has the 20 % of the world population. It has a growth rate of 9.9 %. The lands which are shown to the investor are allocated for a certain time for free and these lands are still untouched for investment. After the independence in 1949, China isolated itself from the industrialized world for about 30 years. Involvement in the global economy which started at the end of 1990’s and gained great acceleration in the last five years has brought a quite different property to the economy of the country. China will be the greatest economy of the world in 2040 outpacing USA. It is possible that the economy growing at an annual rate of 9 % reaches this target earlier in the event of attracting the foreign investment at the same pace. The Chinese governemt is aware of the fact that rapid growth depends on cheap workpower and the investments made in its country. For this reason the investor is very valuable for the country.
Not only the BRIC countries consisting of Brasil, Russia, China and India are on the stage. Actually the name of the group can be far longer than this. Together with the BRIC countries, the projection made by Goldman SACHS predicts that gross national product of the country group consisting of Bangladesh, Indonesia, Philipinnes, South Korea, Iran, Mexica, Egypt, Nigeria, Pakistan, Turkey and Vietnam named as “second 11” which is around 7.1 trillion dollar in 2005 will reach 55 trillion dollar in 2035.
Therefore, gross national product of these countries will be 7.5 trillion dollar more than the total gross national product of G-7 countries. That is to say, there is 15 growing Market on the stage together with the “second 11”.
When compared with the other growing Market countries, Turkey has not proved the scope of its industrial power yet. Considerable part of the workpower of Mexica which has the advantage of proximity to the huge market of USA cooperates with USA. It is an important advantage for their economy. Compared to the other countries such as Egypt, Nigeria and Indonesi in the list of “second 11”, the economy of Turkey looks more sound. Because these countries are struggling with different structural, economical and political problems. However, it is not realistic to think that Turkey will outpace the economical standards that South Korea and Mexica achieved and will achieve in the next 30 years. The magnitude of the growth rate of Turkey depends on the joint ventures with foreign companies and cooperation in the export of developed technologies.
The biggest problem of Turkey is that it does not have a niche. Due to the fact that it is impossible to talk about the advantage of cheap workpower against Bangladesh, India, Pakistan, Vietnam and China, Turkey should create some other advantages to the advantage of proximity to EU market. Turkey will be out of the list if it does not find a niche area for semi-high technology products for itself. Turkey needs to make technological developments as Taiwan and Korea does for 20 years.
It is a reality that the Turkey which has learnt to live under low inflation, conducts economic reforms, produces and exports technology and proceeding on the way to be a democratic and transparent country has a great potential, however whether this potential come true or not depends on how Turkey will use its trumps.
I hope that the year 2007 bring all our readers health, success and happiness.
