The issue of growth in the long election process

The growth issue occupies the top of the agenda both around the world and in Turkey. While a significant distance has been covered in the United States on the topic of growth, the European economy is said to have reached the end of a long recession period. The German economy was relatively better; also the signs coming from other European countries have also turned positive. However, it is necessary to wait a bit more in order to be able to say that economic growth has restarted in both of these economic regions.

The latest data from the Japanese economy, which has experienced a growth problem for almost 20 years, is providing hopeful signals that finally a growth period has restarted. If Japan starts growing steadily, it would be a significant gain for the entire world economy.

While it is observed that a stir has started in the recession that has been continuing since the 2008 crisis in developed countries, this time the growth issue has started to emerge more intensely in developing countries. Growth figures in China, the country that has become the dynamo of the world economy, continue to fall. This year growth is expected to go down to 7 or 8 percent; and this is a new situation for both China and the world. It is observed that also in other major developing countries growth rates are falling.

Turkey is also receiving its share from this wave. While targets had been set as 4 percent for the Turkish economy this year and 5 percent for next year, it is apparent in advance that these targets will not be possible to meet. Deputy Prime Minister Ali Babacan in his statement last month said this year’s growth was estimated to be 3 percent. The industry production data of June has eliminated to a certain extent the danger of remaining below even 3 percent. Hence, the market has started regarding 3 percent as the basis of this year’s growth figure.

The importance of growth is obvious. It is only when the economy is growing that unemployment is reduced, that welfare is higher, hence the satisfaction of the people can only be provided by high growth.

Importance of surveys

Thus, the importance of growth is high for these reasons for all countries. For Turkey, its importance has been even more aggravated because of the long election process that will start toward the end of this year and that will last almost two years. It is necessary that growth is adequate to satisfy the people, so that the current governments receive more votes in elections to be held. Because the concern for votes is a fundamental indicator in democracies, elected governments feel the obligation to do what they can for growth. The efforts of governments to achieve a higher growth rate even though equilibriums in the economy do not allow it are accompanied by serious inconveniences. Turkey has experienced these previously in abundance and severely.

So, within this framework, it should be considered quite normal that we will be talking about growth even more during the next two years.

The global conjuncture only allows low-rate growth figures that politicians ruling Turkey would not like and this will continue over the next couple of years. The indicator of whether or not the government will force extreme growth even though economic equilibriums do not allow it, I think, will be election surveys. If in this process the government observes that its votes are falling, nobody should doubt that concessions will start from fiscal discipline for a higher growth rate.