Turkey must develop a new economic model, says TOBB head

Turkey must develop a new economic model, says TOBB head

KOCAELİ - Anadolu Agency
Turkey must develop a new economic model, says TOBB head

AA Photo

Turkey needs a new economic model that focuses on technological transformation, women’s participation in the workforce, and increasing entrepreneurship, Union of Chambers and Commodity Exchanges (TOBB) head Rifat Hisarcıklıoğlu.

“Turkey needs a new economic model … The most basic element of the new model must be high technology. We need to put an end to unnecessary daily debates and focus on the main point,” Hisarcıklıoğlu said at the 11th summit of the Economy Journalists’ Association (EGD) in the northwestern district of Kartepe.

In his speech, he noted that Turkey lags behind many emerging countries in producing high technologies and has become stuck in the middle-income trap.

Hisarcıklıoğlu said that only 21 of the 100 most rapidly growing companies in Turkey are software and IT companies, compared with 60 in the United States.

“It is time to make new reforms. Turkey needs to distinguish itself in a geographical location embroiled a series of stiff conditions … It needs comprehensive educational, legal and administrative reforms,” he said.

The TOBB head also addressed the income inequalities between the regions in Turkey as a huge problem holding back the economy.

“The richest region, the Marmara region, is four times richer than the poorest region. We need to reflect on distributing wealth more evenly across all regions and 81 provinces. As the TOBB members, we are working on developing a strategy to reach this aim. Turkey cannot become wealthier only on what the Marmara region produces. We need all regions to be mobilized,” he said.

To this end, a hub to produce high technologies needs to be established in an area outside the Marmara region, Hisarcıklıoğlu said.

“We must not wait for the flow of investment to the eastern and southeastern regions only by the public sector … The role of the state must be to build the required infrastructure to lure the private sector to these regions to make investments,” he said.

Hisarcıklıoğlu also stated that he and TOBB representatives met with Deputy Prime Minister Yalçın Akdoğan to discuss the economic ramifications of the peace process.

“If there is no peace, there will be no trade, and if there is no trade, there will no wealth. According to research, the most hopeful province for the future was the eastern province of Batman by around 90 percent last year, thanks to the signs of peace in the region. Batman was followed by the eastern province of Diyarbakır with 82 percent, the southern province of Gaziantep, the northwestern province of Kocaeli and the eastern province of Bingöl. So what the peace process brings is of crucial importance for our country,” he said.

Turkey is expected to reach around $13,000 income per capita by 2020 with an average annual growth of around 3 percent. However, Hisarcıklıoğlu suggested that if a “new story” is written in the Turkish economy through reforms, these figures could increase to $17,000 at around 7 percent growth.

He noted that current growth signals were not strong in the first quarter of 2015 and net exports had not made a big contribution to growth.

“But Turkey still continues to grow. Unemployment is still a problem, but the private sector added 1.1 million new jobs in 2014. This figure is really good,” Hisarcıklıoğlu also said.