Turkey's newest 'crazy project'

I am grateful to the Central Bank for banning me from their regular meetings with economists. If it weren?t for that, I would have missed, like most market economists, the unveiling of Turkey?s new megaproject, which coincided with the bank?s latest meeting on May 21.

It wasn?t a rent-seeking construction project disguised as a financial center. Or an unrealistic canal bound to destroy Istanbul?s ecosystem. Or an unfeasible new airport handed out to President Recep Tayyip Erdo?an?s cronies. Kemal K?l?çdaro?lu, leader of the main opposition Republican People?s Party (CHP), revealed a CHP megaproject called ?Turkey Hub? (Merkez Türkiye).

The project is simply that -- a new city in the center of Anatolia that would become a manufacturing and logistics hub for the whole world. Before evaluating it, you should remember that Turkey?s growth model based on external financing is not sustainable. The country cannot grow more than 3-4 percent a year anymore and as a result, has become stuck in the middle-income trap. Turkey has also not been able to make the transition to high-tech, high-value products.

But these problems are only trees. They may be giant sequoias, but they are still trees. At the ?forest level,? Turkey is being left out of 21st century economic trends. At the last two IMF-World Bank Meetings, the most packed seminars were the ones on how emerging markets could participate in global value chains (GVCs), which are not on the government?s agenda. Not only have we not been able to integrate into the global economy, we are not even trying to. This is a pity as Turkey?s location is unique. K?l?çdaro?lu underlined that we have access to 58 countries, 1.5 billion people and a market of $21.6 trillion within a 4.5-hour flight radius.