Turkey’s path is clear and open

  • 19 Temmuz 2018 Perşembe

The Organization for Economic Cooperation and Development’s (OECD) recent report on social mobility, titled “A Broken Social Elevator? How to Promote Social Mobility,” has unveiled that the new generations are much less fortunate in terms of the equality of opportunity. Now, it seems much more difficult compared to previous years, or even impossible, for the young population not only in developing countries but also in developed ones to climb the social ladder with their own savings and talents. We can say that this situation will worsen in the coming years, especially in the developed countries. Unfortunately, we are entering a period in which youth unemployment will rise around the world. In fact, what lies behind this is the neoliberal policies that developed countries are irresponsibly applying. Today, the shrinkage of global trade with protectionist delusions is a phenomenon that will further aggravate this problem.

The shrinkage of world trade and the prominence of protectionism in this process – even for a certain period of time – means further escalation of unemployment and deepening of global crisis. Such a return from globalization might have very bitter consequences for humanity. This is because, especially in developing countries, presenting protectionism as a solution and implementing it will eventually lead to a war.

On the other hand, one of the most effective ways to combat poverty and bring down unemployment in the short term is that developed countries support the policy of the free movement of migrant workers and labor and reduce working hours.

Apart from that, however, developed countries must give up imposing non-market neoliberal policies on developing countries for the sake of their short-term gains.

Since the outbreak of the 2008 crisis, it has been argued on end that developed countries, including the U.S., where the first tremors of the crisis emerged, are about to recover and that a Western-centric permanent recovery is coming first to financial markets and then to labor markets. Until a few months ago, all presentations, reports and news coming from certain centers and presented to us claimed that a rise in wages in developed countries, starting from the U.S., had begun, and that unemployment had begun falling, in parallel to the rise in inflation.

It was a widespread opinion in all analyses that, just like combined vessels, hot money that parked in developing countries would be converted to the U.S. currency again and turn toward developed country assets, and that developing countries would have comprehensive problems stemming from borrowing difficulties like the financial crises of the 1990s. All analyzes on Turkey were also based on this assumption.

The dreadful part is that the economic bureaucracy of developing countries accepted this shortsighted and incorrect view as a basis for action and made serious mistakes in cash management, monetary policy and fiscal policy which would cost a bomb for us due to their heavy consequences. Today, these mistakes have brought many countries like Argentina to the brink of crisis.

From the very beginning, we have said that this view is not correct, that the 2008 crisis is so fundamental and systematic that it cannot be surmounted by the monetary policy framework of developed countries’ central banks, and that the world can overcome it solely through a radical change in the hierarchical operating mechanisms of the overall system.

Here, the biggest mistake that developing countries, including Turkey, could make was that they would try to do what developed countries told them as in the past. As a matter of fact, when some Latin American countries, which quickly recovered with on-the-spot government changeovers after the 2008 crisis, fell into the clutches of Americanist governments again, the crisis knocked their door. This is exactly the case with Argentina. Brazil is also heading there fast.

Before the election, Turkey resisted this mistake as much as it could. We have taken very important steps such as launching export- and industry-oriented reforms that support real areas and boost small and medium-sized enterprises. From now on, we will continue with a competitive and fully open policy set which supports the industry and exports and observes employment.

Now a “rally” is being spoken again when referring to developing countries. What about the rising wages and the fact that employment was returning to natural levels in the U.S. and its successors? What about the big funds that would follow rapidly rising 10-year U.S. bonds and turn into dollars and U.S. bills? What about the permanent outflows that would start from all emerging economies?

The ones who claim these can only make temporary gains from daily speculations on developing country currencies. Apart from that, believe that all goods exported from the centers of developed countries are writing off. This is the reason why U.S. President Donald Trump is furious, Britain has initiated Brexit and German Chancellor Angela Merkel has to further improve relations with Turkey. This is also the reason why trade wars are inevitable and are on the agenda as a madness to deal the final blow to developed countries.

Turkey’s path is clear: Our main objective is to achieve a competitive, fully open, export and industry-oriented and human-oriented economy. The harmonization of monetary and fiscal policies will be at the highest level. This will bring us a stronger and more independent central bank, more powerful and more efficient regulatory agencies and economic management. We will highlight inclusive, employment-oriented and technology-intensive growth. This growth will also be a stable and balanced development path that responds to basic structural problems such as inflation and the current account deficit along with unemployment.