At brink of social reforms, Turkey resembles Ireland's experience


At the end of the 1980s, Ireland was among the weakest economies in Europe. Facing slow growth, heavy taxation and high rates of unemployment, the only hope for many Irish youths was to leave their country and look for jobs abroad. Ireland at that time was depicted as the poorest of the rich in the European Union.

Starting from the mid-1990s, it has had rapid economic growth for almost 15 years in a row, reminiscent of the boom of East Asian countries in the 1960s. Economic growth rates were around 10 percent between 1995 and 2000, while unemployment figures were falling sharply to 4 percent by 2003. Morgan Stanley, the global investment banking giant, coined the term Celtic Tiger, referring to Ireland's spectacular economic growth. Then in 2008, the economic crisis resulting from the U.S. property bubble blew out the fire, resulting in a recession, and the aftershocks of the economic downturn took a couple of years to ease. As of 2018, the Irish economy seems to have recovered from its wounds.

In the last century, except for Ireland's miracle, there is almost no example of success stories among Western countries, which resembles the growth of the Four Asian Tigers. The perpetual growth was made possible by various contributing factors such as access to the EU common market, economic development that is mainly state driven, successful economic policies to attract foreign direct investment and low corporate taxes. But among them all, it has more to do with the demographic structure of Ireland.

Ireland's population growth rate began decelerating by 1975, and it fell further with the legalization of contraception in 1979. This downward trend continued for two decades, leading to a very low dependency ratio – the ratio of the population that is not in the labor force, generally ages between 0 to 14 and those 65 and over, to the total population – and higher working-age population, a phenomenon called the demographic dividend. It is like a gift of demography to any country, as it implies the potential of the highest productivity and the lowest population of the elderly and children who rely on others economically. Ireland has benefited from this advantage to a great extent. What is more, during this period of economic advancement, Ireland succeeded in increasing women's participation in the labor force as well as the reversal of outward migration, which further boosted the country's productivity.

Second, the demographic dividend made it easier to reform and restructure the education system in the country, as there are relatively lower rates of the population 14 years old and under. Ireland seized this opportunity by investing heavily in higher education made possible by rapid economic growth. Moreover, ever since free education was provided to the second and third levels, Ireland produced a golden generation that is very well-educated. Sustainable growth can only be achieved by good management of human capital. In this sense, the Irish economy has been making good use of its human capital, particularly for the last two decades.

Ireland was not the only country that took advantage of the demographic dividend. The East Asian Tigers such as South Korea and Taiwan benefited for more than 30 years and attained remarkable growth rates up until the 1990s. Unlike them, many European countries, the U.S. and Japan have been suffering from their own demographic structures for decades. Due to low birth rates and higher life expectancy, they have an aging population. The case is unfavorable for many less-developed countries, too, having very high birth rates and lower life expectancy, causing a high dependency ratio.

Turkey's to-do list

As for Turkey, it has been enjoying the demographic dividend economically for a long time. The population has been growing at a decelerating pace, causing a decrease in the dependency ratio. Favorable demographic conditions coupled with the right policies have been making higher economic growth rates possible since 2002. Yet, this success story has still not brought about advancement in education. President Recep Tayyip Erdoğan has repeated in many speeches that Turkey has still not been able to reach the desired levels in culture, arts or education. At the opening ceremony of the 2017-18 academic year, he said: "Although we have changed our examination systems multiple times, we have been able to satisfy neither our teachers nor our students and their parents." He wants to prioritize these two areas by putting them at the top of Turkey's to-do list in the near future.

Turkey has covered a lot of ground concerning the improvement of quantitative measures and physical conditions since the ruling Justice and Development Party (AK Party) came to power in 2002. Net schooling ratios at each level have been on the rise for the past 10 years. The numbers of tertiary institutions reached 183 in 2017, almost triple compared to 2000. According to Organisation for Economic Co-operation and Development (OECD) reports, Turkey increased its expenditure per student at all levels by 65 percent from 2005 to 2012. The National Education Ministry has always received the biggest share and, currently, for example, its budget is TL 134 billion ($35.3 billion), which amounts to 18 percent of the total budget for 2018. However, these efforts could not be transformed into an increase in the quality of education, as it often reveals itself in global education tests such as the Programme for International Student Assessment (PISA) and Trends in International Mathematics and Science Study (TIMSS).

Considering recent technological developments, Turkey has to be aware of what the country might bring together and be able to accommodate its human capital regarding these changes, just as Ireland did. Yet, this task is not as easy as it was for Ireland. While we see a decrease in the share of those aged 0 to 14 in the whole population, the number of students is still growing. It was 17.3 million in 2017, which is almost four times more than the population of Ireland. Seeing this, authorities tend to invest in quantity, making it even more difficult to devise the best policies for improving the quality of education.

The world is aging, and so is Turkey. According to the results of the Address Based Population Registration System, the median age of the population increased to 31.4 in 2016, from 31 in 2015, and it is projected to be 42.4 by 2050. From that year onward, the increase in the population is expected to stop. In other words, it will start shrinking and getting older. Turkey will continue to have a young population for a while, despite its slowing population growth. Statistical forecasts say that this demographic window of opportunity will stay open until 2050, which means that it is about time to make a breakthrough in education. It has never been very feasible to implement changes in policies before. Erdoğan seems determined to confront the issue for the sake of Turkey's future generations.

* Talent Management Specialist

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