In a recent interview with Turkey’s Cumhuriyet newspaper, Massachusetts Institute of Technology (MIT) economics professor Daron Acemoğlu accessed Turkey’s current economic outlook as minimum wage talks continue. Regarding the increasing emigration of young Turks abroad, Acemoğlu said “When just a few people emigrate abroad, it is not a problem. But when emigration is this high, it opens the door to major collapse and I believe Turkey is approaching this point.”
Acemoğlu’s Wednesday (December 20) interview with Cumhuriyet covered a variety of topics concerning Turkish and international economics.
As talks regarding a hike in Turkey’s minimum wage continue, Acemoğlu described Turkey’s industry, institutions, and education system as ‘broken’ and said that a minimum wage hike would not provide respite from these systemic problems: “Companies do not produce enough because they do not work efficiently. They do not use technology right. They do not put the necessary ‘investments ‘into technology. The minimum wage [hike] will not offer a solution to this.”
Regarding his expectations for changes in the Turkish economy under the new Minister of Treasury and Finance Mehmet Şimşek, appointed in June, Acemoğlu said: “I do not have much hope at this point. With inflation this high it is difficult to bring it down in any case. But it is also not as simple as simply bringing down inflation; Turkey has deeper problems.”
“Turkey cannot properly harness technology”
“Turkey is unable to properly harness technology,” Acemoğlu said, pointing to a lack of investment and lack of a skilled workforce. “High school graduates are struggling to use technology. It again comes down to making the right choice. If the right technology were there, they would use it too, the gardener, the electrician, too.”
Turkey risks ‘collapse’ due to restrictions on freedoms, brain drain
Describing how many of Turkey’s best and brightest youth are emigrating abroad due to restrictions on freedom at home, Acemoğlu said “When just a few people emigrate abroad, it is not a problem. But when emigration is this high, it opens the door to major collapse and I believe Turkey is approaching this point.”
Regarding a possible entry into politics with Turkey’s Republican People’s Party (CHP), Acemoğlu said “Right now I would like to stay out of politics for the time being.”
The interest rate at Turkey’s Central Bank received a small hike on Thursday (December 21), and now stands at its highest level since President Recep Tayyip Erdoğan took power over two decades ago. Long opposed to high interest rates, Erdoğan has in recent months consented to a series of hikes as a new economic team works to tackle Turkey’s soaring inflation.
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Following Turkey’s first post-election interest rate hike in June, Acemoğlu sat down for an interview with Medyascope Editor-in-Chief in which he commented on the changing fiscal policies and struggle to battle inflation.
Written/translated for Medyascope by Leo Kendrick
