Need for a new growth story and CHP pledges

Need for a new growth story and CHP pledges

The bottleneck in Turkey’s economy has been spoken about for a couple of years now. Under the headline “middle-income trap,” many have said the country needs a new growth story and a new economic vision to draw foreign capital. 

All of these debates stem from Turkey’s need to grow more and for growth to be more stable. We should evaluate the parties’ economic pledges ahead of the June 7 election from this angle. 

We see that all opposition parties are making pledges taking into account the increasing poverty and deteriorating income distribution. It is now apparent that the social welfare that has enabled the ruling Justice and Development Party (AKP) to win consecutive elections will be protected; it will not be touched by any party. In fact, opposition parties are promising to further increase social welfare. But they also say they will abandon the attitude that this welfare should be delivered to the needy as if it was a grant; instead, it will be regarded as a right of citizenship and should be institutionalized.   

The contribution of this social welfare to lower-income segments of society is not only a pledge to win the elections - it also gives clues about a new economic policy. 

The economic promises of the main opposition Republican People’s Party (CHP) are the most debated ones in this election. With the CHP’s recently announced “Center Turkey” project, it is noticeable that all these pledges are part of an integrated vision and policy. 

I had the opportunity to join one of the CHP’s election rallies and to personally discuss them with CHP leader Kemal Kılıçdaroğlu. I saw that he is thinking of a new vision in politics and the economy, and that these pledges and projects have been prepared within this context. Increasing the minimum wage to 1,500 Turkish Liras, introducing two yearly bonuses for retired people, introducing reduced prices for diesel used by the farmer, and adjusting aid so the income of no family will be under 720 liras, are both pledges for improving income distribution and also boosting domestic demand. 

While domestic demand is boosted, passing educational and judicial reforms - or founding a more contemporary system - are also planned. Other pledges serving the same purpose include producing goods with high added value and technology, changing the production structure, and rapidly training employees to this end. 

New production center

As the CHP announced recently, creating a new city in Central Anatolia, which will become the production and commercial base of our region, is also part of the new vision. Organizing this city with special laws aimed at decreasing bureaucracy, choosing a model where nongovernmental organizations will be active in the administration and structure are also thought to change the production structure to harmonize with current challenges. Kılıçdaroğlu is expecting a huge interest from foreign investors to this center and he says that initial reactions have been positive. 

In sum, when viewed as a whole, the CHP’s promises and projects may be the “new growth story” that Turkey’s economy needs.