Turkey will move on with strong reforms

Published 26.10.2017 23:38

All institutions considered important for the world economy, from the World Bank to the International Monetary Fund (IMF), are revising their growth forecasts for Turkey these days. No one could predict at the beginning of the year that the Turkish economy would grow around 7 percent amid the global and regional crisis environment and the surrounding warfare. But we have achieved it. Moreover, we anticipate the positive contribution of exports and industry to growth that we expect to peak in the third quarter.

The Turkish economy has created very strong employment in this whole process, but we have seen rigidity in unemployment and especially youth unemployment rates due to high participation in the labor force and the growing gap between the rapidly changing industry and labor force. So, this will be one of the most important problems facing the Turkish economy in the coming period as well. In other words, we will have high growth, but this growth will also boost demand for participation in the labor force.

Depending on rising growth and expectations for welfare, the labor force has looked for high-wage and qualified jobs in this entire process. So, the decline in unemployment rates has not been proportional to the growth rate. For this, we have to rapidly carry out reforms in both education and the economy in the upcoming period to satisfy the labor force expectation of the employment-generating sectors. But on the other hand, we also need to improve the overall investment environment in the country to create stronger employment.

It should be one of the basic objectives to minimize bureaucratic difficulties, to make access to financing even easier and to reduce interests below the average profitability of the industry. Economic reforms and incentives should be deepened in this direction. Our banking and financial system, especially our public banks, should speedily introduce practices that facilitate access by industrialists and exporters to financing. In this regard, the Credit Guarantee Fund (CGF) is an important achievement for both the banking system and the real economy and a revolutionary development in access to financing. It will be one of the main steps to deepen and institutionalize this achievement. Our banking system must reach new sources by going beyond deposit banking, which is based on traditional approaches. Securitization and the formation and deepening of second-hand markets in all sectors, structural financial regulations and the creation of new institutions in the real estate sector should be the most important goals of our fundamental reform programs. In this context, market conditions should provide an investment environment with lower interests and easier access to financing.

Depending on all this, Turkey will continue its economic policies and related strategies that will increase 2017 growth even further in 2018.

The issues of strengthening and diversifying the Turkish lira and Turkish lira-based investment instruments to save the economy from the dollar pressure and to completely remove dollarization will be much-discussed and much-emphasized topics of economy in the coming period.

The U.S. is getting increasingly flurried about diminishing dollar-based trade around the world and the dissolving monetary system that was established after World War II. The U.S. is going too far in this regard, so much so that it is delaying and blocking dollar traffic between customers of some international securities and investment institutions and banks in all countries. Dollar-based financing and cash-for-goods has become problematic around the world. Here, the U.S. is using money laundering and terrorism financing as an excuse. It considers all transactions that are not made in dollars "suspicious" and is trying to present such transactions as money laundering and terrorism financing. Undoubtedly, this approach is a serious obstacle or even a threat to global trade and the financial system. Well, why is the U.S. so afraid that the dollar is remaining out of the global trade cycle?

Because the trade cycle independent of the dollar means the U.S. will no longer be able to finance itself as it has done so far. And the U.S. takes it as an attack on its right to seigniorage. The U.S. Federal Reserve (Fed) has so far dominated the global economy by adjusting dollar demand and supply and trying to manage both the U.S. and world economy through seigniorage. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, which registers dollar-denominated trade, is a very important "control" mechanism through which the U.S. follows global money flows and measures the rate of trade outside of the dollar. Thanks to this system, it also takes measures against trade out of the dollar, makes projections and carries out operations accordingly. The U.S. argues that no banking system or financial organization can go beyond this mechanism, and if they do, they will be considered to be involved in money laundering and terrorism financing. In addition to posing a huge threat to the global trade today, this system undermines the fight against money laundering and terrorism financing and skips the true instruments and methods of this fight and facilitates money laundering and terrorism financing.

As the economies of countries become stronger, their dependency on the dollar declines. Trading mechanisms based on strong local currencies in the world are emerging as an alternative to dollar-based trading. We are also coming to have new electronic monetary systems and payment tools. The Chinese yuan was introduced as a new reserve currency. This being the case, such an approach, which threatens trade out of the dollar, is no longer valid. If this approach continues to be pursued, the global trade and payment system will soon be paralyzed.

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