May 20, 2022
According to the report of Turkey post-COVID recovery-Principles for a sustainable and resilient strategy prepared by T.R. Ministry of Industry and Technology General Directorate of Development Agencies;
There is a growing need for horizontal interventions that take stock of local socio-economic and institutional conditions. The previous section depicts a scenario whereby different territories
have been affected at varying degrees by the economic slowdown sparked by COVID-19. Policies crafted from “best practice models” derived from high-tech areas and well performing regions —
reflecting the ‘often-mindless groping for best practice’ (Markusen & Schrock, 2006)— risk failing to deliver on their goals and to leverage the endowments of what are an heterogenous groups of regions from an economic perspective for a sustainable recovery. Instead, policy alternatives that are sensitive to the characteristics, features and conditions of regions and places at different levels of development are best positioned to maximise the potential of every part of Turkey in building back better after the economic fallout of the current crisis (Iammarino et al, 2018). Similarly, recent surveys conducted by UNDP within the scope of the project illustrate the multifaceted nature of the factors that Turkish firms often single out as important constraints, therefore vertical interventions acting upon one segment of the economy —i.e., infrastructure, human capital, or inward and foreign investment— are unlikely to address the multi-dimensionality of the current pandemic-related economic slowdown.
Regional specific initiatives need to be integrated into broader national development strategies. A horizontal approach that is sensitive to the local preconditions should not imply local approaches that lack policy coherence with nation-wide developmental objectives. In the past, across the world examples of standalone policies lacking the support from complimentary policy areas have mushroomed. This often led to ‘strategies of waste’, that is developmental interventions that leave the treated territory in the medium- and long-run in a similar or worse condition than before the intervention, despite sometimes having short-term positive effects (Rodríguez-Pose & Wilkie, 2019). This has been the case, for instance, of the development of Special Economic Zones (SEZs) in Peru, where an indiscriminate approach to attracting FDI through investment promotion initiatives neglected the provision of adequate skilled labour and infrastructure, and, as a result, failed to deliver on national development targets (World Bank, 2016). In this sense, each intervention, be it developing digital infrastructure, providing training and consultancy services to MSMEs, supporting resource efficiency, needs not to be seen as an end in itself, instead it should be purposely targeted to respond to region-specific development constraints, while ensuring it works towards the attainment of country-wide development objectives and goals.
A comprehensive, multidimensional strategy is built around four development axes that shape the underlying economic activity of each sector and territory (Figure 5). A policy strategy that
includes a balance between four elements —inward investment, human capital, infrastructure and local firms— is likely to be better equipped to ignite a long-term recovery process from the current slowdown sparked by Covid-19. The four development axes correspond to the four broad categories of ‘levers’ that strategies of late across the world have used to catalyse and promote growth. A comprehensive strategy that finds a synthesis and creates synergies across all four levers will also be instrumental to shift from the enactment of emergency measures, targeting the most pressing issues such as individual and businesses’ liquidity constraints, and move towards recovery programmes aimed at “building back better”. Similarly, an allencompassing approach based on the four pillars is functional to yield strategies of gain — that is, development approaches that are particularly capable of delivering on their expected impacts by fulfilling both their inherent potential and designated objectives (Rodríguez-Pose & Wilkie, 2019)— so as to produce future-proof regional economies that are better suited to withstand upcoming challenges, i.e., digital transformation, changes in international production patterns, and climate change.
The four pillars need to be strictly intertwined. In the past, many development interventions have frequently gravitated towards a main development axis —fundamentally, either e.g., infrastructure or inward investment— leaning towards unbalanced development strategies (Rodríguez-Pose & Wilkie, 2019). However, the close relationship between each development axis implies that interventions in one of the pillars will reap the intended benefits only if local capabilities in the other dimensions are adequately developed. A balanced strategy needs to feature an appropriate mix of structurally, socioeconomically, and institutionally oriented policies and reforms (Barca et al, 2012). For instance, policy initiatives to upgrade the quality of the local labour force will fail to deliver if efforts are not made to ensure an adequate demand of skills by local and foreign firms located in that territory, leading to phenomena like brain drain, as in the case of the development of skill upgrading programmes in the Philippines (Phan & Coxhead, 2015; Rodríguez-Pose & Wilkie, 2017).
On top of the four pillars, two cross-cutting elements —institutions and the SDGs— are key to ensure the effectiveness and long-term sustainability of any development strategy. The institutional context has in the past been described as the key driver of innovation, mutual learning, and productivity growth, and it is a mediating factor that can in effect determine the fortunes of any policy intervention (Putnam, 2000; Rodríguez-Pose, 2013). In this regard, the level of accountability, transparency and autonomy of institutions is crucial to ensure th eachievement of the intended objectives. Similarly, a greater focus on the SDGs and, more broadly, on enhanced environmental, social and corporate governance (ESG) standards is likely to make
or break the long-term sustainability of intervention aimed at reinventing regional industrial fabrics and revamping targeted sectors (UNDP, 2016). Additional caution will then need to be
exerted to make sure development interventions reach the most vulnerable segments of the population. They, in turn, are likely to be affected harder and longer by the current pandemic, as mentioned in the previous section. Failing to do so will lead to half-baked policies: though at times capable to address regional or sectoral constraints, they would be incapable of igniting equitable growth to tackle the ever-growing territorial and interpersonal inequalities propelled by the COVID-19 crisis.
Adapting the strategy to the local conditions facilitates a more effective and efficient deployment of resources. Mimicking interventions that proved successful elsewhere but neglect the territorial specificity of comparative advantages may also end up in wasteful policies. The pandemic has reinforced pre-existing trends in inequality and it is expected to leave countries much more polarised than in pre-COVID-19 times (OECD, 2021). From here the need to embrace development approaches that respond to the scale, scope and nature of the development challenges territories face and the opportunities and potential with which they are endowed. In particular, interventions in the different pillars post-pandemic need to be sensitive to the specific conditions of different Turkish regions. This is particularly important taking into account the huge internal disparities in Turkey, where Western parts of the country (especially around Istanbul) have levels of development that are close to the average of, say, the European Union, whereas in Eastern parts of the country the levels of development are low, i.e., Eastern Anatolia. As a result, policies more likely to succeed will be those adapting along the level of complexity —understood as the number and diversity of elements across development axes—and the breadth of scope —that is, the narrowness of the development outcomes or objectives by which a strategy is guided (Rodríguez-Pose & Wilkie, 2019).
Source: report of Turkey post-COVID recovery-Principles for a sustainable and resilient strategy prepared by T.R. Ministry of Industry and Technology General Directorate of Development Agencies
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