Turkey had a decision to make like any developing country, take the Japan or Korean route or the China route. The China route is competing on price for simple products, while the Korea or Japan routes are more about tech and value-added.
Unfortunately, it took the China route, devaluating currency, keeping the cost of borrowing low and fueling growth. This seemed like a good idea in the short run, this blog has mentioned the 'Golden age' of the Turkish economy before, but that fast growth which made Turkey very popular among foreign investors might have finally caught up with it.
Because it seems like the same strategy is starting to hurt China, with poor growth and potential deflation. We will see the Turkish growth numbers at the end of this month, but the miracle of Turkish growth might be over too, and even if it is not, this strategy is not sustainable, at least it seems that way.
Seeing China's troubles, it might be too late, but the right move still seems to be trying to increase value-added, instead of trying to go the low-cost route.
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