Fiscal Discipline and Educational Quality

ANKARA – The world is moving into a post-industrial age in which manufacturing is becoming ever more complex and competition has become global. To succeed, countries increasingly need a highly skilled and educated workforce. Therefore, raising the level of skills conferred by secondary schools has become an urgent priority for developing and developed countries alike.

For me, the issue of education is no mere academic matter. I was born into a family of nine children. My parents were illiterate, and none of my sisters attended school beyond the primary level. However, in my family’s next generation, all of my nieces and nephews have a high-school diploma and most have attended university.

Improving the education system of a country with more than 16 million primary and secondary school students – more than the combined population of 20 European Union member states – poses considerable fiscal challenges. So the first step is to create a sound macroeconomic basis for reform.

For many years, high public debt and macroeconomic mismanagement forced Turkey to pay a huge interest-rate premium in international financial markets – money that might have otherwise been invested in schools. However, since assuming office in 2003, Prime Minister Recep Tayyip Erdoğan’s government has reduced the fiscal deficit as a share of GDP by nearly ten percentage points, from 10.8% in 2002 to 1% in 2013, and cut the public debt/GDP ratio from 74% in 2002 to 36.3% in 2013. As a result, government interest payments as a share of tax revenues fell from 85.7% to 15.3% during this period.