The Turkish economy has a typical development dilemma – which can only be resolved by productivity growth. Currently unemployment is at 9.8 per cent and needs to be down below 6 per cent for a socially sustainable growth path for future years. On the other hand, the added value per product must rise to enable Turkey to be more competitive.
This requires Turkey to focus on high-productivity sectors (currently the automobile industry shows good productivity) rather than low-productivity ones (such as textiles).
In fact it is unlikely that Turkey could survive in many of the low-productivity and labour-intensive sectors in the longer term - Turkey’s recent development has made life expensive and the cost of labour significantly exceeds that of China, India and so forth.
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