Global vulnerabilities and the election process

Global vulnerabilities and the election process

After the G-20 countries finance ministers and central bank presidents meeting in Washington last week, members stated that despite the recovery in the world economy, vulnerabilities and risks were continuing. They also said structural reforms should be prioritized for increasing the growth rate.

Member countries confirmed their determination, the one they agreed on in the previous meeting, to increase the growth rate of their economies 2 percent over the current trend in the next five years, focusing on arrangements that would increase competition, especially in goods and services markets.

Mario Draghi, president of the European Central Bank (ECB) has stated the strengthening of the euro required further measures in monetary expansion. Draghi had previously drawn attention that in the case inflation stayed low for a long period of time, there would be additional monetary expansions. In short, global economy has not truly overcome the 2008 crisis yet. Even though the U.S. economy has started recovering, it is debatable whether or not this is permanent.

In Europe, on the other hand, there is a slight recovery based on Germany, but there is not much hope for a total economic recovery; for this reason, monetary expansion and its dimensions are open to debate.

In such an environment, even though G-20 countries tried to act together, they conflicted with each other due to country interests. Developing countries, even though they have relaxed a little with the re-flow of money recently, should take their structural measures and should act accordingly, knowing the bill of the global crisis will, in the end, be charged on them. Maybe, those developed countries that have taken structural measures on time, will have an advantage in this process compared to others.

Difficult to take structural measures

There is a tough global process; the troubles unique to Turkey and the never-ending political turmoil make it difficult to overcome the transition period with success. In other words, unless Turkey takes serious structural measures very soon, it will raise the bill it will pay in the next term. 

Well, can Turkey take serious structural measures in the political process it is experiencing?
The presidential election that will be held with direct popular vote for the first time in August will obviously not be as easy as Prime Minster Tayyip Erdoğan planned. Even if the election is easy, what will be experienced in the Justice and Development Party (AKP) after the election, because it is the ruling party, points to further political vulnerability. 

This process will not end with the AKP selecting its new leader after Erdoğan; there are general elections to be held in 2015. In other words, we have another period of one-and-a-half years ahead of us where there will be an abundance of political clashes.

It will be quite difficult to take new structural measures during this process. Let alone new measures, with the effect of election economy, it is apparent that even the current stability is at risk. In short, a tough period is waiting ahead of Turkey and its economy…