Turkey does not need IMF, says state minister

Turkey is undergoing a political, social and economic “stress test,” said State Minister Zafer Çağlayan, citing recent developments on the signing of a new deal with the International Monetary Fund, or IMF, as “proof of that.”

The IMF used a double standard when it came to Turkey, Çağlayan said Sunday, adding that the government saw this and ruled against signing a deal with the fund.

The economic measures taken by the government within the past seven-and-a-half years have been tested and approved, the state minister said, adding that not signing a new stand-by deal with the IMF would not have an impact on Turkey’s internal discipline.

“Turkey, thanks to its budget discipline and structural economic reforms, has managed to overcome the global economic crisis on its own. The country’s credit ratings have also been increased by four separate international ratings agencies,” Çağlayan said. “We have done all that without the IMF. We proved that we do not need to be accredited by the IMF.”

New fiscal regulation is on its way, according to Çağlayan, who said Turkey will put all the measures taken so far into law.

“We are establishing a balance on when to support, how to enable, a sturdy income-expenditure equilibrium, how far will we go with taking on debt, what kind of a interest-rate trend will be followed and how we will handle the budget deficit,” the state minister said.

“We are setting up a new system. Therefore, we do not need the IMF,” said Çağlayan. “However, the IMF is a partner establishment. In the future we may need the fund. It has several deal methods. We may end up engaging in one of those in the future. However, no other country has the right, or the luxury, to tell Turkey what to do.”

A ‘double standard’

During the global economic crisis, the IMF told all countries “go ahead, increase consumption, spend all you can, give your citizens money,” said Çağlayan. “But the IMF turned around and told Turkey, ‘Don’t.’”

The state minister said this showed a “very clear” double standard when it comes to the IMF’s approach to Turkey.

“How come the IMF told us differently when we had no bankrupt banks and we had a balanced budget?” he asked.

“Yes, my country was affected by the global economic crisis, but the impact of the turmoil in Turkey was nowhere near its impact on other countries,” Çağlayan said. “The IMF used double standards against Turkey because it evaluated Turkey based on its former economic performances. Meanwhile, Turkey currently has a strong financial and budget discipline. It has managed to balance its debts. It has created an impeccable structure.”

When Turkey declared it would not sign a deal with the IMF, the Istanbul Stock Exchange, or ISE, did not react one bit, the state minister said. “In the past, the ISE would have jolted. No other government would have had the courage to move on without the IMF,” he added.

Export strategy

Responding to a question about the country’s export strategy, Çağlayan said Turkey had put together a program covering 13 years for the first time ever. Within the framework of that strategy, he said, part of Turkey’s consulting system was privatized.

“We are planning to establish a news consulting system that will be based on performance. We have also established Turkish trade centers and set up desks in 33 countries,” Çağlayan added. “We aim to increase Turkey’s share in global export markets.”

On the 100th anniversary of the Turkish Republic’s establishment, in 2023, Turkey aims to reach an export volume of $500 billion. The country also aims to have an import volume of $500 by that date, bringing its total trade volume to $1 trillion. That figure would help place Turkey among the world’s top 10 economies, according to the state minister.

Turkey also aims to raise the per-capita income of its people to well above that of residents of European countries, Çağlayan said, adding that the country also aims to own 10 globally acknowledged brands.