Economic Inequality Between Regions of Turkey

ECONOMIC INEQUALITY BETWEEN REGIONS OF TURKEY

Selen Demircioğlu

İstanbul Bilgi Üniversitesi

Abstract

This study aims to point out that there are huge rate of economic inequality between regions of Turkey. To do so, it insists mostly on the income differences. It defines and explains the main terms about the topic which are income inequality, Gini coefficient and poverty. It focuses on regional units such as general occupation, the Gini coefficient and population-based data of the regions of Turkey. It also contains general data such as poverty due to the social strata, in order to see and understand economic inequality within a wide perspective. The given data are analyzed with comparing in each term. It is concluded that the economic inequality between regions is a serious problem which continues to grow bigger.

Keywords: regional income inequality, poverty, social strata

Introduction

Economic inequality is a topic which is being discussed all over the world. It is treated with attention because it is to be the main measure for a country’s developmental status. Developed countries have a lower rate of economic inequality therefore the quality of life remains high. For example, according to Eurostat (2004), in Denmark where the poverty rate is only %10 while in Turkey it is %25. (as in cited in Dansuk, Erdoğan & Özmen, 2008, p.4) “The average household net-adjusted disposable income per capita is 25 172 USD a year”(Organization for Economic Co-operation and Development [OECD], 2014). This rate is higher than the OECD average.

Economic inequality is defined as “the unequal distribution of household or individual income across the various participants in an economy.” (Investopedya, Income Inequality, n.d) Income inequality refers to a percentage of total income proportional to the population. For example, if a small part of the population controls a huge proportion of the income of a country, this economic condition belonging to the country is considered as unequal. It is also considered as an important measurement of “fairness”. Which economic distribution is fair for every member of the society is still a remaining question mark.

1. General Occupation of the Regions

When the topic relates to the economic inequality between the regions of Turkey, it is important to understand economic status of each region. To do so, it is necessary to examine the general occupation of each region. Afterward, the occupation will be examined according to its income rate proportionally to the population. It also makes a significant comprehend about poverty in each region divided as urbanized and rural, so that it can claim and point out the economic inequality between these regions.

Table 1: Population, Income and Poverty Rate

Social Strata Population Population (%) Number of Poor Poverty
(%)
Employers

280,864

0.41
High-skilled workers 1,632,237 2.36 0.95
Professionals 110,75 0.16
Big Tradesmen 1,747,507 2.53
Skilled Workers 5,935,230 8.58 4.51
Small Tradesmen 4,396,695 6.35 2.74
Unskilled Workers 20,239,433 29.25 5,486,745 33.76
Non-active People 6,871,146 9.93 2,781,550 17.12
Small Farmers 3,332,848 1,117,373 6.88
Landless/Small Property/Agricultural Workers 8,485,803 12.26 3,953,253 24.33

Source: SIS (2004) (as cited in Dansuk et al., 2008)

1.1 Regional Occupation

As Özmucur and Silber (2002) noted that Marmara, Aegean and Mediterranean regions are the richest regions because these areas are urbanized while Eastern and the Southern Anatolia were noted as the poorest rural regions. (p.33) As it can be interpreted from the Table 1, the main occupation of the urbanized regions (employers, high-skilled workers, professionals, big tradesmen) have less percentage of poverty (%0,95 of high-skilled workers), in opposition to small farmers (%6,88), landless/small property/agricultural workers (%24,33) who are mainly located at rural regions. As the risk and the rate of poverty increases, the economic inequality between urbanized and rural regions also gets bigger.

1.2 Disproportion

In Table 1, It is remarkable that even if the employers, professionals and big tradesmen are a very small part of the population (%3,1 of the total population), they don’t have a significant rate of poverty. In contrast, unskilled workers and landless/small property/agricultural workers make up the greater part of the population (%41.51), they have a massive rate of poverty (%58,09). It is an indicator for a huge economic inequality because a small part of the population gains the most of the total income, as the greater part of the population suffers from poverty even if they have jobs. To even more accentuate the inequality, it can be said that 4 out of 10 non-active people are poor while 4,5 out of 10 agricultural workers suffer through poverty.

2. Regional Statistics

Regional inequality is related to region’s population and its income. As the income per person doesn’t rate close with the real income of every member of that region, it refers that inequality in this region has a higher rank.

2.1 Eastern Turkey

In the Table 2, we can notice that the highest rate of poverty belongs to Mardin which is in the South East Anatolia, with %82,37. Other cities that also have a high level of poverty can be listed as Van with a rate of %57,77 and Ağrı with %47.31. These two cities present in the Eastern Anatolia.
It can be clearly seen that the poorest regions of Turkey are in the East part of the Turkey. Furthermore, according to TURKSTAT (2004-2011), Eastern Anatolia (Ağrı, Kars, Iğdır, Ardahan) industry has the lowest rate of gross value added followed by Van, Muş, Bitlis and Hakkari which are also part of the Eastern Anatolia.

2.2 Western Turkey

When it comes to Eastern Turkey, as it can be seen in the Table 2, İstanbul has the lowest rate of poverty with only %5 followed by other big cities such as Tekirdağ (%10.80) and İzmir (%10.83). As the TURKSTAT (2004-2011) claims that in 2004, İstanbul has the highest rate of gross value added in industry, followed by İzmir, Kocaeli, Sakarya and Bursa; all are located in Marmara region.

Table 2: Regional Distribution of Poverty 

Regions Population Income per person
(TL annually)
Number of Poor People Rate of Poverty (%)
İstanbul 10,707,956

3,661,310,291

565,074

5.28

Antalya

2,535,363

2,581,810,923

187,667

7.40

Ankara

4,044,175

2,362,634,294

413,708

10.23

Tekirdağ

1,339,887

2,870,185,864

144,659

10.80

İzmir

3,483,026

2,311,115,449

377,216

10.83

Kocaeli

2,789,950

1,774,515,389

356,365

12.77

Balıkesir

1,535,328

2,518,143,771

203,843

13.28

Bursa

3,123,297

2,309,979,237

430,956

13.80

Aydın

2,597,724

3,111,922,218

442,303

17.03

Trabzon

3,111,287

1,827,938,551

567,854

18.25

Zonguldak

945,020

2,938,729,335

193,540

20.48

Kırıkkale

1,715,913

1,964,405,518

390,956

22.78

Adana

3,691,600

2,046,209,690

873,817

23.67

Manisa

3,097,208

1,846,995,419

757,576

24.46

Malatya

1,751,233

1,725,634,962

436,230

24.91

Konya

2,435,727

1,891,558,887

646,111

26.53

Hatay

2,766,317

1,862,658,508

784,246

28.35

Kayseri

2,537,035

1,486,790,405

732,334

28.87

Kastamonu

828,787

2,029,852,549

243,527

29.38

Gaziantep

2,093,679

1,545,536,200

734,619

35.09

Erzurum

1,333,751

1,413,199,782

499,014

37.41

Samsun

2,997,519

1,652,383,843

1,303,217

43.48

Ağrı

1,120,369

1,059,872,721

530,007

47.31

Van

2,015,285

1,252,456,329

1,164,255

57.77

Şanlıurfa

2,862,487

951,425,201

1,841,536

64.33

Mardin

1,735,643

673,763,128

1,429,660

82.37

Source: SIS (2004) (as cited in Dansuk, et al., 2008)

3. Gini Index

The most popular and used measurement for economic inequality is the Gini Coefficient also known as the Gini Index. It indicates “the gap between the rich and the poor”. (Investopedya, Gini Index, n.d) The lowest rate of Gini index is 0 while the highest rate is 1. The higher Gini index gets, the more there is a disproportional distribution of the income for a group. As an illustration, we can say that if the Gini index rates 0 there is a total equality. In contrast, if the Gini index is measured as 1, it is said to be a perfect inequality. In addition, Gini index is in direct proportion to poverty rate. (Dansuk et al., 2008)

3.1 Comparison

Table 3: Gini Coefficient

Regions

2006

2013

Istanbul 0,375 0,392
West Marmara 0,350 0,337
Aegean 0,426 0,370
East Marmara 0,392 0,322
West Anatolia 0,413 0,396
Mediterranean 0,421 0,399
Central Anatolia 0,342 0,342
West Black Sea 0,372 0,331
East Black Sea 0,378 0,315
North East Anatolia 0,381 0,398
Central East Anatolia 0,404 0,373
South East Anatolia 0,396 0,380

Source: TURKSTAT (2006-2013)

According to Table 3, the Gini index of İstanbul and North East Anatolia have grown while the others have decreased. Marmara region still has the lowest rates while Eastern regions have higher rate for inequality.

3.2 Analysis

As the Gini coefficient also shows the rank of poverty, we can say that other regions such as West Black Sea and East Black Sea regions are in the stage called ”maturation” in order to be developed regions based on Kuznets (1995) suggestion that claimed economic inequality rises with the early years of economic development, then declines as the developmental process continues. (as in cited in Özmucur & Silber, 2002, p.1) Yet, the level of development isn’t equal between regions of Turkey, thus the Gini index differs according to regions.

Conclusion

We have discussed economic inequality between regions of Turkey in order to understand the reason behind the unequal developmental stage of Turkey. The causes of economic inequality between region’s Turkey are unequal development of cities, unequal urbanization followed by immigration, uneven distribution of the income in portion to population. This situation can be seen as a way of growth or can be treated as a social-economic problem. It differs according to different perspectives which will continue to be discussed.

References

Dansuk, E., Erdoğan, G., & Özmen, M. (2008, April 1). Poverty and social stratification at the regional             levels of Turkey. Türk-iş Dergisi.
Investopedia. (n.d). Gini Index. Retrieved from
http://www.investopedia.com/terms/g/gini-index.asp
Investopedia. (n.d). Income Inequality. Retrieved from
http://www.investopedia.com/terms/i/incomeinequality.asp
OECD. (2014). Denmark. Retrieved from
http://www.oecdbetterlifeindex.org/countries/denmark/
Özmucur, S., Silbert, J. (2002). Spatial income inequality in Turkey and the impact of internal migration
TURKSTAT. (2004-2011). Regional gross value added at current basic prices – by kind of
economic 
activity

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