No democracy, no development: İYİ Party
On March 18 in Istanbul, İYİ (Good) Party senior member Durmuş Yılmaz brought together economy reporters and writers for a presentation on the current economy. İYİ Party leader Meral Akşener was also in attendance.
The presentation aimed to outline the economic precautions that should be taken, how much they will cost, and how they will be funded. Yılmaz said the İYİ Party will prioritize getting the country out of the middle-income trap.
“If there’s no democracy, the economy will not develop. With a fixed exchange rate, we would today be going through a crisis such as the one we experienced in 2001,” he added.
He also highlighted that the sins indulged in ahead of the 2001 crisis are again on display today, with the economy operating largely on credit, which creates big problems.
“We have not been able to get the necessary flow of international currency with the loans we have taken on. That is one of the reasons why the Turkish Lira is so weak. Our growth model needs to change,” Yılmaz said.
Changing the model
The cost of wrong economic policies, based on the current foreign deficit, amounts to $1 trillion, Yılmaz said, based on the production industry’s dependence on imports for interim goods and raw materials. He cited exports worth $1.8 trillion against the $2.1 trillion imports between 2002 and 2017.
Turkey has developed using lower and middle-standard technology over the past 40 years and now needs to move on, Yılmaz said, stressing that the improvement of the economy happened when Turkey abided by EU laws and standards after 2002.
Over the past 11 years Turkey has fallen to 88th spot out of 149 countries in the World Serenity Index, Yılmaz said in the presentation, also noting that individual freedoms and working conditions have rapidly deteriorated over the past decade. He warned that this means Turkey does not have what it takes to compete in the international arena.
‘Debt becomes public overnight’
He also noted that at present one-fifth of every 100 liras spent is done so on loans, giving the lie to the government’s oft-repeated line that Turkey has become a country giving out loans instead of taking them.
Yılmaz noted that the private sector continues to take on debts and that although public debt is relatively low, private debt “could become public overnight.”
“And when the climate gets tough, when we don’t have capital flowing in and when interest rates rise, the government comes up with terms like ‘the interest rate lobby,’” he added.
In line with this, rising interest rates around the time of the Gezi Park protests in 2013 were due to economic dynamics in relation to the United States and the U.S. Federal Reserve – as opposed to any dark conspiracy to destroy Turkey’s economy.
Yılmaz noted that private debt remains a major problem in Turkey, where there are around four million people in debt. The total debt is around 70 billion Turkish Liras, he added.
In his presentation Yılmaz also made the important point that much of the credit handed out as part of the Credit Guarantee Fund, praised for helping Turkey’s economic growth rebound spectacularly last year, was problematic.