From St. Petersburg with love

Published 02.06.2017 23:46
Updated 03.06.2017 01:47

Poised to surpass the G7 in terms of the size of added value they produce from 2018 to 2020, the Emerging 7 (E7) economies have increased their influence in world politics and are rapidly boosting their socio-economic conditions to the extent that they have strengthened their claims in the world economy since the early 2000s. Moreover, they have been holding international summits where critical issues of the world economy-politics are discussed. The leading representatives of world politics and economy gathered in global summits that Turkey has hosted in Istanbul many times as an E7 country since the late 1990s. Economies like Russia, China, India and Brazil have also started hosting such summits over the past decade. The St. Petersburg International Economic Forum (SPIEF) is one of these important events, the first of which was held in Russia in 1997.

President Recep Tayyip Erdoğan and Russian President Vladimir Putin, two leaders who have not stepped back from their national stance and the vital interests of their countries, are highly appreciated and held in high esteem by their people. They enable discussing critical issues at the large international summits that they lead by gathering the major leaders of world politics. Having been held under Putin's leadership since 2006, SPIEF has become one of the leading global platforms aimed at establishing communication with the leaders of the business world and discussing key economic issues that concern Russia and the whole world. Indian Prime Minister Narendra Modi will be the special guest of this year's forum in which United Nations Secretary General Antonio Guterres will also participate.

Our conversations with the representatives of the Indian delegation who attended the summit concentrated on Europe's bad policies on Turkey and Russia, which almost meant suicide for the EU. Indian specialists emphasized that they are astonished by the Western countries' bad policies on Turkey and Russia, two countries that will balance the heavy imbalance that China will cause in the global economy-politics over the next 10 years. Meanwhile, the 8th Bosporus Summit to be held under the auspices of the Presidency of the Republic of Turkey continues to rise as an international cooperation platform in which global issues are addressed. We are talking about a "new future" for the world, and we will continue to watch Turkey's strong mark on the global issues during the summits hosted by Turkey.

Pro-dynamic economy administration

The messages conveyed by Erdoğan during the 3rd Justice and Development Party (AK Party) extraordinary congress, the first meeting of the AK Party's new Central Executive Committee and Central Decision Board (MKYK) and the AK Party parliamentary group meeting he attended for the first time after three years, enabled us to see important clues about the implementation process of the new presidential government system. I would like to define this period as a "pro-dynamism" government period. In other words, we are talking about a process in which an understanding of proactive, fast and efficient solutions toward all kinds of developments, and potential risks for economy, security and social life will prevail. The performances of all the members of the Council of Ministers will be carefully monitored. For this reason, Erdoğan requested ministers to prepare a 180-day work program in the first place.

Erdoğan underlined that the 180-day work program, which will start on July 1, should contain practical proposals for the settlement of issues directly touching people's daily life, like the 100-day program that was followed when the AK Party came to power for the first time. This period, which I call "pro-dynamic," namely the 180 days in the first stage and then the working programs for the second stage until the 2019 elections, will also form the roadmap of the AK Party and entail both the party and its organizations to swiftly complete the necessary work and start election preparations. The two most pressing issues in the economy are the inflationary trend and the reacceleration of foreign exchange inflows to Turkey. The high inflation, the most critical economic problem, arises from high costs in terms of the real sector.

The two main issues that raise the costs of the real sector are high interest rates, namely the cost of financing and the bounce in foreign exchange rates, namely the cost of imports. We need to focus on solutions that will pull the Turkish economy out of the high interest spiral. In addition, accelerating the net foreign exchange inflow to Turkey with the rapid increase in the foreign exchange income, which will be provided by the tourism sector, and the foreign exchange revenue increase, which will be provided by new steps to be taken in exports, will also make important contributions such as the stabilization of the exchange rates and acceleration of the fall in the inflation. At this point, measures to rapidly reduce food inflation should also be implemented urgently. The downward influence of the increase in foreign exchange income on exchange rates will bring vitality to the market and mobility to private sector investments by improving the perception of the economy. We need to evaluate 180 days effectively.

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