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PAL Policy Analytics Lab

Why have we established PAL?

10 August 2017

The whole world is going through a period of uncertainty. The crises in 2008 seems to have unraveled forces of protracted economic instability in countries which have been the drivers of inspiring economic growth and promoters of global policy paradigm. Along with other long term trends this triggered a popular discontent and infused radical political-populist shifts, which threaten to undo most of the gains of the globalization. Although there are some signs of economic recovery especially in Europe, experts are warning against complacency, pointing to bloated debt stocks of governments and private sector, fueled by easy and cheap credit. Political backlash seems to have been averted in Europe by recent elections in France and Holland, however populist discourse is still abound even in centrist political parties, blurring future prospects of cooperation towards a unified liberal democratic Europe.

Longer term structural trends are also a source of ambiguity. Technological progress in areas of ICT, robotics, automation are threatening millions of jobs around the globe, putting a lot of burden on governments’ laps to retrain their workforce, help restructure national industries and firms to preserve their competitive edge and extend social assistance to people who don’t have a chance to be employed. Climate change has already started to devastate lives all over the world, demonstrating the incompetence of existing international institutions to forge and enforce global collective actions that can supersede “national interests” in a sustainable way.

This part of the world where Turkey is located, is in turmoil since Iraq war and lately Syrian conflict which erupted in 2011: bloodshed continues, forcing people to leave their homes, seeking refuge in neighboring countries, albeit to a lesser degree, since the ones who have the means, have already fled.   

The states’ apparatuses, institutions are in shambles. Incapable of putting down terror and violence, they are devoid of mundane means of delivering basic public services to people who can’t leave their homes. Cities, towns are in ruins.

Turkey has not been immune to all this turmoil and uncertainties.  

Despite political stability since 2002, early years of reform motivation, for the most part thanks to EU candidacy, has been dwindling since 2007/2008. As EU has distanced itself, the focus of attention seems to have shifted to political issues to the detriment of institutional or economic reforms which will have a bearing on the long term growth prospects of the Country.  Since 2007, Turkey has been through three constitutional amendments by referenda; the recent one in April 2017, which was accepted by a little margin and declared illegitimate by the opposition, is transforming the government regime into a presidential one, a-la Mexico or Russia, effective from 2019. Failed coup in July 2016 apparently spearheaded by a religious faction, led to the state of emergency and triggered a widespread cleansing operation in public and private institutions which is still ongoing.  Some of the liberal freedoms have been put on hold, several reporters are jailed, alongside with some members of the parliament. This has increased the wedge between EU and Turkey even further. In July 2017 European Parliament has voted for freezing of accession talks. As of this writing there are no signs of reconciliation with the EU.

All this political havoc has not only pushed structural economic problems further down in the agenda but also consumed most of the social capital, vital to discuss and design long term sustainable strategies to solve them. Following are some of the structural problems that we need to focus:

  1. Turkey is losing its window of opportunity as its population is getting older very fast with dire implications for future public policies.
  2. The economy seems to have settled in lower growth equilibrium, invoking worries that Turkey has actually been trapped in middle income level.
  3. As cheap and abundant liquidity period seems to be approaching to an end there are no signs of a structural shift in exports (or savings) to level the balance of payments deficits without any abrupt price adjustments rendering us poorer.
  4. International test comparisons indicate that, on average, we cannot sufficiently educate our youth-future workforce- for them to compete with their peers in the international arena.
  5. The industry has been losing its attraction for investors, as quick and big gains facilitated by tax advantages and relatively easy credit, makes construction sector the engine of the economic growth.

At this juncture, we believe that if we cannot develop viable solutions to these problems Turkey will hardly sustain its level of per capita income in the near future. We sincerely believe that Turkey will learn how to live peacefully, manage and prosper with its long standing cleavages.  But this is easier said than done. Slow changing political culture and hard to build democratic institutions are key ingredients for success. Even if we manage somehow to settle our political disputes in a constructive way, thus achieve an enabling environment for economic reforms, economic success impinges also on the existence of a well thought, widely deliberated, evidence based, skillfully coordinated and monitored policies and an able state with qualified bureaucracy to oversee the reforms. Moreover, civil society, NGOs should be part of the process. We need to be able to work together and trust each other.

That is why we have established PAL. As you can see from our bios we have a long history of working together in an NGO, a think tank which was established in 2005. Some of us focused on governance matters, others more on economic issues, but all of us have witnessed and learned from successes as well as failures of Turkish transformation for the last 30 years. We have worked with public sector as project partners; some of us also have long years of working experience in public sector as managers, so we believe PAL has a fair understanding of capacities and mechanics of public policy environment. We would like to contribute to policy discussions and share our knowledge and experience in designing future policies to tackle above listed policy problems.  Although our legal status is a company, we are first and foremost a think tank, a research institution rather than a private company, which we had to establish for administrative convenience. We intend to function like a policy lab, trying to find innovative and tailor made - evidence based solutions to public policy problems; and publish not only our findings and reports but also our discussion notes on several policy topics.