(MENAFN- Gulf Times) The middle income trap is set, and Turkey is walking right into it.
As an ageing population and rising labour costs weigh on an economy larger than any in the Middle East, Turkey's quest to join the exclusive club of so-called high-income countries depends on how well its youth can compete globally. The government says the country is on track to reach first-world status this decade by using education reform to build a more skilled and productive workforce.
So far the strategy has faltered, because the nation's schools are not "giving kids the skills they need to transform the Turkish economy," said Reha Civanlar, vice rector of Ozyegin University.
While Turkey's education system is improving, it is lagging those of many peers, with two thirds of working adults lacking a high school degree. According to a report published by the OECD last month, Turkey has the highest proportion of 20-to-24-year-olds who are neither in employment, nor in education or training, followed by Greece, Italy and Spain.
The failure to become high income - which the World Bank says means average earnings per person of above $13,000 - could leave Turkey in a growing pack of countries stuck in the middle and competing for low-paid jobs.
With an average salary per person of $10,972, Turkey is one of 49 middle income countries since 1960 that have failed to reach high income status, according to a Turkish central bank report in September. Only eight countries have made the transition. President Recep Tayyip Erdogan has pledged that Turkey will enter the global top 10 of world economies by 2023, the centennial of the nation's birth.
While economists disagree over the mechanisms that lead to countries stagnating, many say that education reform is an important means to break out of the trap. Finance Minister Mehmet Simsek said it was central to the government's fight in an article for the Wall Street Journal in September.
So far, reforms have included increasing compulsory education to 12 years from 8, boosting teacher salaries, opening hundreds of schools and universities, and supporting research and development since the government came to power in late 2002.
Although Turkey improved its performance in mathematics by 3 score points per year since 2003 in OECD's PISA tests, the international standard for assessing education, the 2012 test results showed Turkey's youth still below the OECD average as others counties improved apace.
"Around 25% of the Turkish 15-year-olds do not read well enough to be able to analyse and understand what they are reading and are therefore considered by the OECD to be ''functionally illiterate,'' according to a World Bank blog in 2013 by senior education economist Naveed Hassan Naqvi.
At one elementary school in Ankara, 15-year-old student Mustafa says he wants to become an aerospace engineer. Yet his hopes are tinged with concerns over the quality of his education.
''I don't want to blame teachers, but we're forced to memorize lots of formulas for example in physics lesson without learning how to implement them," he said.
Teachers at two separate state-run schools say that many students can't read flawlessly and struggle to implement the knowledge they have.
"None of these reforms are fostering innovation and free thought," Gunes Asik of The Economic Policy Research Foundation of Turkey, or TEPAV, said in Ankara. "The education system has historically been an ideological tool in Turkey" and that's hindering Turkish children from progressing.
There are questions over whether the government wants to foster greater freedom, according to Anthony Skinner, head of analysis for the Middle East and North Africa at UK-based forecasting company Verisk Maplecroft.
The growing number of religious schools in Turkey "hardly provides the conditions for a high-skilled dynamic work force with an internationally competitive edge," Skinner said by e-mail.
While educational reforms may be falling short, Turkey's economy is also facing the end of fast-track growth based on access to cheap credit and foreign investment. During the second half of Erdogan's 11-year run as prime minister, growth was less than half the 6.8% average of the first half of his rule. That's below the target level of 6% that the World Bank says is needed for Turkey to reach high income status.
Should Turkey fail to break into the high income bracket, its slowing economy, an ageing population and rising wages may lead to stagnation that has beset other countries like South Africa and Brazil that have failed to escape the trap, according to the Turkish central bank report.
The 8 countries of the 57 that have achieved high income status since 1960 include Cyprus, Greece, Portugal, Hong Kong, Japan, South Korea, Singapore and Taiwan, according to the report. Countries that escape the trap spend on average 42 years as middle income country. Turkey has already spent 60 years in the category.
Time may be running out to make the leap because Turkey's ageing population is likely to drive up wages that will hurt competitiveness before the economy has transitioned to a skills-based one.
"Turkey's population is aging rapidly and there either needs to be a larger base of young workers to support pensioners or a relatively smaller, educated one capable of being more productive," said Skinner.
Turkey is already suffering from a shortage of high-tech companies and skilled workers, according to Yaman Tunaoglu, a board member of Karel Elektronik Sanayi ve Ticaret, told a conference in Ankara on December 24
"We have lots of projects abroad but we find it very difficult to find qualified technicians," said Tunaoglu. Turkey says it lacks 100,000 people in the information technology sector, Fikri Isik, minister of science, industry and technology, said on December 17.
That's left students like Mustafa trapped, like his country, between his ambitions and the reality. While he aspires to have a high income job, history suggests he'll be lucky to surpass his parents' education status. The OECD's 2009 education survey, the latest available report on inter-generational mobility in Turkey, suggests that 66% of Turkish youth have the same level of education as their families.
"I am not happy with the quality of my education," Mustafa said. "I fear it may fail me in reaching my goals."
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