Turkey’s billionaires frighten top economist Piketty

Barış Balcı ISTANBUL

Economist and author Thomas Piketty speaks to journalists as he poses in front of his book “Capital in the 21st Century” in Berlin. AFP photo

Wealth inequality, capital flight, tax evasion and a lack of financial transparency are issues that are particularly worrying for countries like Turkey, Brazil and China, according to economist and author Thomas Piketty.

“If Turkey has more billionaires than Japan, then this is indeed frightening,” Piketty told daily Hürriyet in a written interview.

Piketty is the author and researcher behind the blockbuster 700-page economic tome, “Capital in the Twenty-First Century,” which has attracted much attention this year for detailing the path of income inequality over hundreds of years.

“Like other emerging countries, Turkey needs broad-based investment in education and skills, which in turn requires adequate financing and tax revenues. Turkey also needs more transparency about income and wealth. The middle class and the poor will not agree to pay for public spending if they feel that the rich are paying less than they do,” he added.

Fiscal justice is a key component of a successful development strategy, Piketty stressed.

In Turkey only one company is on the list of the Fortune 500 global, but 44 billionaires are on the Forbes billionaires list, surpassing Japan. According to a recent study conducted by the Organization for Economic Co-operation and Development (OECD), Turkey ranks third in terms of countries with the worst levels of income inequality after Chile and Mexico. They are followed by the United States, Israel, Portugal, United Kingdom, Spain, Greece and Japan.

In his bestselling book, Piketty argues that income inequality across the world is becoming more severe and that governments must do more to address the issue. He cites detailed tax data from across many developed nations.

“I believe that a progressive tax on net wealth, with low rates to begin with, would be very useful in a country like Turkey. At the very least, it would allow the production of more information and transparency about how the different wealth groups are doing, year after year. Without reliable public information about income and wealth dynamics, it is very difficult to have an informed democratic debate,” he told Hürriyet.

For Piketty, all inhabitants of the planet have the same basic problem to solve: If people do not convince their public that globalization can come together with fiscal and social justice, then an increasing number of segments in society will be tempted by nationalist solutions.

“In order to bring more financial transparency and fiscal justice into the globalization process, we need the contribution of every country. European countries have a lot to lose as they have a social model to finance and protect, so in principle they should be leaders in this direction. Unfortunately they are often unable to coordinate,” he said.

Piketty’s book remained number one on Amazon’s bestseller list for weeks and was sold out in many bookstores. The 43-year-old French economist’s book is a still huge hit and has recently been released in a Turkish translation.

The French economist is set to visit Istanbul on Nov. 19 to attend a conference at Galatasaray University.