Let the Turkish economy grow
Turkey’s gross domestic product is expected to grow at around 3 percent in 2014. This growth rate is a “modest high” when the current situation in the European markets, Turkey’s main trade partner, is considered, along with the surrounding geopolitical risks. However, it is low in light of the country’s potential and numerous advantages, including its young population and unique location, among other things, as leading economy ministers Deputy Prime Minister Ali Babacan and Finance Minister Mehmet Şimşek have both said recently.
Many leading businesspeople have also recently said that Turkey knows what to do in order to grow, but it must do this now.
I attended a press meeting on Jan. 9 in Istanbul, organized by the country’s top business organization, the Turkish Industry and Business Association (TÜSİAD). The economic message of the head of the organization, Haluk Dinçer, was very clear: “Turkey knows what it must do to start growing again. The government’s economy and development programs have defined what to do very well. But as TÜSİAD members, we believe the necessary structural reforms are being delayed in the midst of the many elections that the country has seen in recent years. It is still not too late to realize these reforms, which will make an overall positive contribution of 1-1.5 percent to the growth rate.”
If the necessary short, medium and long-term reforms are prioritized and made in an efficient way, and if public expenditures are restructured for the sake of ensuring higher productivity, Turkey may start growing at around 5-6 percent by 2016, Dinçer also noted, while referring to his concerns about the recent decline in industrial production growth rates and the consumer confidence index.
I quote what he said again and again, because I have concerns about whether his economic comments are really being heard in Turkey. I am saying this because over 20 economic journalists attended the TÜSİAD meeting on Jan. 9, but the main topic of the meeting was whether or not the TÜSİAD members really believed in the existence of a “parallel structure” in Turkey, and whether the organization’s real addressee was President Recep Tayyip Erdoğan or Prime Minister Ahmet Davutoğlu.
These issues topped the agenda of the meeting after Haluk Dinçer’s recent Hürriyet interview on Dec. 29.
In an interview with Hürriyet, Dinçer had stated that although his organization has no problem with President Recep Tayyip Erdoğan, “TÜSİAD’s addressee is not the president, but rather the prime minister and the ministers related to our field.”
In his latest remarks at the meeting on Jan. 9, Dinçer reiterated his earlier words. “It is not meaningful to discuss this addressee issue so much. The president is the head of the state, representing the Turkish Republic. The addressee of TÜSİAD is, of course, the government, because it offers its policy proposals to the government and criticizes it if necessary,” he said.
Regarding the parallel structure, he confirmed what had said earlier, saying the claims about the parallel structure were very serious and must be investigated by the judicial system.
Here I am talking about the main topics of the meeting, but these are things that should have been secondary in a meeting with the leader of a top business organization. We should have been talking about the hottest business agenda, but we could not do so because, for many, what Dinçer said about the political agenda matters more.
This country must talk about the economy again and realize the structural reforms again to grow amid very fragile geopolitical conditions and economic troubles, especially before the U.S. Federal Reserve starts to end the high liquidity party in the global markets, from which emerging markets including Turkey have benefited a lot.
But the TÜSİAD head does not say these words.
Union of Chambers and Commodity Exchanges of Turkey (TOBB) head Rifat Hisarcıklıoğlu said in November 2014 that Turkey has not seen economic progress over the last six years because it has not made any significant reforms.
“Because Turkish people have lost their common identity to live and move forward together, we are now all stuck in the middle-income trap,” Hisarcıklıoğlu said, reported by Anadolu News Agency.
The TOBB head added that “Turkey has made no progress for the last six years [and has] forgotten how to make reforms.” He cited “too much conflict” as responsible for the country losing its ability to move forward together.
For instance, Turkey’s businesspeople still do not know whether the new commercial code will be made effective, although the draft law has been discussed for years. Another hot topic for business circles is the change in the Public Procurement Law. Many businesspeople want a transparent law, but they are not sure whether the change will be transparent, as conditions may not be the same for subsequent projects.
The heads of many companies say the same thing: We need reforms. So when, if not now?