Nothing to Celebrate About GDP "Rise"

According to professor İzzettin Önder, it would be inappropriate to analyze and present the per capita income data as a rise in people's wealth. What is important is income distribution.

Turkish Statistics Institute (TUİK) calculates a per capita income of 10 thousand 436 US dollars in 2008. Önder expresses skepticism about the methodology employed, while drawing attention to the inequalities in income distribution.

Önder estimates a lower value than the announced per capita income; depending on the following reasoning:

Value of the dollar: Because of high interest rates, value of the dollar rested low; enabling a high value for per capita income in dollars. If it would have calculated from the current currency, one dollar equalling  1.7 TL, then the per capita income value would be lower.

Non-industrial finance revenues: Finance sector's revenues are included in national income. Yet, this should be done on the condition that this revenue arises from services or from production. If a bank issues outbound credits as equity capital, then serving it as bonds and registering this as revenue, this isn't an asset or a service that consumers can buy. Nonetheless, it augments the sum.

Foreign trade tax: Tax revenues stemming from foreign trade are also included in the calculation. This means taxing revenues, which are transferred out of the country. It doesn't benefit national affairs.

Excess stocks of the corporations are also included in the calculations and they are written up.

Firms can over declare their production: In national income calculations, industrial firms are surveyed on their production. Participating firms are prone to over stating their production to avoid appearing futile. Consumption is also calculating via surveys. That's why production is generally stated higher than consumption.

Demographics: TÜİK has rendered total population lower by employing surveys. As of December 2007, population of Turkey is declared 70 million 586 thousand and 256 people.

Per capita income is calculated by dividing the national revenue by the population. In sum, it doesn't provide information on income distribution. Nonetheless, an OECD report released in late-2008 revealed that Turkey is second from bottom in income distribution equality. The difference between the wealthiest 10 percent and the least wealthy 10 percent of the population is 17 fold. This rate is 25 fold in Mexico and the OECD median is 8,9 fold.

Moreover, the OECD report stated that Mexico and Turkey are the least effective countries in deploying public sources to ease this inequality. Around 12-15 percent of the population in the age of work is poor.

The last TÜİK data related to income distribution dates back to 2002-2005 period. Latest data revealed that 3 million 274 thousand people are unemployed as of December 2008.  

"Looking at those figures, one wouldn't conclude that Turkish people got wealthy just because of per capita income exceeded 10 thousand dollars," said Önder. "Some can ride on jeeps while others are lacking basic needs."(TK/AGÜ)