OECD: Turkey on track to becoming functioning market economy

In its latest report, the OECD has broadly endorsed Turkey’s
economic reforms since the country’s 2000-2001 economic crisis.

A “window of opportunity” has opened for Turkey to shift its
economy to a “stronger and sustainable job-rich growth path”, says
an economic survey released by the Organisation for Economic
Co-operation and Development (OECD) on 21 October. Despite the
challenges ahead, the 180-page OECD report establishes that Turkey
is on course to become a functioning market economy, which is
one of the conditions attached to the country’s EU membership
bid.

According to the OECD, Turkey’s economy has the potential
to grow at a trend rate of above seven per cent per year. Today,
Turkey is the fastest-growing economy in the OECD, the report
notes. 

The OECD believes that Turkey’s short-term task is to keep
inflation at bay (54 per cent in 2001, 25 per cent in 2003, 12 per
cent in first half of 2004, and possibly single digits in 2005),
while in the medium term the country should strive to reduce
the net debt to GDP ratio (from around 70 per cent today to below
55 per cent by 2008).

The report recognises the country’s progress in the fields
of macroeconomic policy and confidence-building but states
that more has to be done to improve core public services, boost
privatisation and revamp the country’s tax system.

EU member states are scheduled to decide on 17
December whether and when to start accession negotiations with
Ankara. The OECD believes that “the recent recommendation by the EU
Commission to start EU accession negotiations […] promises
to strengthen the international anchors and could underpin Turkey’s
shift to a new economic regime”.

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