ECONOMIC STRUCTURAL TRANSFORMATION AND ENERGY POLICIES IN TURKEY 1923-2023

Abstract

This study evaluates the economic structural transformation process of the Turkish economy between 1923 and 2023 within the framework of the use and change of energy resources. The change and diversification of energy resources, referred to as the energy transition, depending on economic development and structural transformation is evaluated through the structural transformation of the Turkish economy. For this purpose, the relationship between economic development, structural transformation, and the energy transition is revealed within the framework of data obtained over the centennial period of the Turkish economy. Within this framework, the economic transformation process is evaluated using the structural transformation index and sectoral productivity coefficients, and is periodically associated with energy policies and the use of energy resources.

In 1923, Turkey had an economic structure dominated by agricultural activities; as a result of the policies implemented, it underwent a transformation over the years, and by 2023, it had evolved into an economic structure dominated by industrial and service activities. While Türkiye was undergoing an economic structural transformation, it also diversified and changed its energy resources; While in 1923, Turkey was using primitive biofuels (wood and dung) and limited coal, by 2023, it had reached its final stage of nuclear energy supply. This study attempts to reveal the relationship between the change in energy resources and economic structural transformation in Turkey, the direction of this relationship, and the influencing factors. The Structural Transformation Index method was chosen to calculate and analyze structural transformation, and the Norm of Absolute Value Index (NAV) index was used in the calculations. The rate of structural transformation was calculated using data from the Turkish Statistical Institute (TÜİK) covering the years 1923 to 2023. The findings, along with data from the Ministry of Energy and Natural Resources (ETKB), were evaluated in the model to analyze the relationship between the change in energy resources and economic structural transformation.

According to the results of the study, it was concluded that the change in the use of energy resources is both a determining factor of the structural transformation process and a direct outcome of this transformation. While the increase in the share of sectors in Gross Domestic Product (GDP) in favor of the industry and service sectors causes the diversification of energy resources and the expansion of their usage areas, the diversification of energy resources affects the change in the shares of sectors in GDP by affecting sectoral productivity