U.S. Federal Reserve (Fed) Chair Janet Yellen said during her recent testimony before the House Financial Services Committee that no decision was made on launching an interest rate hike in December and that the Federal Open Market Committee (FOMC) members thought it would only be right to make such a move if the data and outlook allowed it. She added, "What the committee has been expecting is that the economy will continue to grow at a pace that's sufficient to generate further improvements in the labor market and to return inflation to our 2 percent target over the medium term. The Fed expects to raise U.S. interest rates only gradually to protect the recovery in the housing sector."
Interestingly enough, certain news channels and wires present these statements to emerging markets as if the Fed would raise interest rates in December, arguing for a long time that the Fed's interest rate hike will give rise to a financial crisis in emerging countries like it did in the 1990s. They suggest such developing economies, including Turkey, must therefore consent to lower growth rates and be cautious. Indeed, these so-called news outlets strive to design economies in developing countries with perception manipulation. This implies the International Monetary Fund's (IMF) new impositions on such countries. Sometime in the past, IMF specialists used to visit Latin American and Asian countries, including Turkey, with black bags in their hands and would start to dictate what those countries should do with their economy the moment they got off the plane. They prescribed the same remedy for Chile, Argentina, Mozambique and Turkey, irrespective of their different economic and social dynamics. They forced all these countries to rapidly devaluate their national currencies, hike interest rates, reduce wages at least by half and terminate public employees' labor contracts in order to give priority to foreign debt payments. And what is worse, they completely removed social expenditures on the budget, instead of introducing belt-tightening polices, and the budget was planned in a way that would merely allow them to pay external interests. To implement all these policies, a military dictator, along with IMF specialists, used to be deployed in these countries. In other words, fascist military rulers were brought to power with military coups in order to implement brutal IMF prescriptions that were written in line with American economist Milton Friedman's track. For instance, with an IMF prescription, Chile's fascist General Augusto Pinochet, who staged a military coup in the country in 1973, assigned Friedman as an advisor to him. Turkey also went through a similar process after the military coup of Sept. 12, 1980. The neoliberal economic policies that were pursued in the post-coup period impoverished the country by liquidating its resources. The county failed to make value-added industrial investments and was turned into a hell of monopolies that constantly suffered crises and transferred funds to the outside. For the first time, the country put an end to this cycle in 2008 by avoiding signing the 20th stand-by agreement with the IMF under the rule of then Prime Minister Recep Tayyip Erdoğan. Until then, Turkey has inked 19 stand-by agreements with the IMF since 1947.
Today, it seems that some U.S. and U.K-based media outlets have replaced the IMF. As I mentioned above, they create a perception for the good of global interest groups to which they are loyal and strive to manipulate emerging economies by publishing fabricated news to no end.
The West needs strong and inclusive growth in developing countries in order to overcome the crisis it is currently experiencing. If these countries are impoverished as in the past, this will suffocate not only them but also the whole system. Although the IMF has realized this reality, some want to dominate the world with the 19th and 20th century colonial system in line with their own interests - which implies a stalemate that will destroy not only them, but also the world economy.
This being the case, all developing countries, including Turkey, must develop their unique growth models. Certainly, Turkey will continue on the economic path that Erdoğan introduced in 2008 when he proposed an inclusive growth model for Turkey by not signing a new stand-by agreement with the IMF. This path enabled Turkey to grow by nearly 10 percent in 2010 and 2011 - years when Turkey attracted the greatest amount of foreign capital in its history. Contrary to what is claimed, Turkey maintained growth and democracy hand in hand. It amended the fascist Constitution of 1980 to a large extent by holding a constitutional referendum in 2010. Following the Nov. 1 elections, there are unnecessary debates prevailing in Turkey about what the name of Turkey's economic path would be. Turkey must abandon such discussions and focus on economic strategies as well as the theories and practices of this strategy.
An economic development model that is based on inclusive growth and fair income distribution rather than on interests and unearned income and prioritizes production and added value is the right path for Turkey. There are many tasks that lie ahead of the new government, such as reconstructing monetary and fiscal policies, privatization, understanding the incentive system and economy-related bodies. Only in this way can Turkey take strong steps toward achieving its 2023 objectives and properly exercise the power granted by its voters.