Today, it is a very important emergence for developing countries including Turkey to catch a qualified and inclusive growth trend. Because the fact that these countries continue with a growth that improves their income distribution and pulls their industries and quality added value, technology production upwards is a dynamic that distorts the global hierarchy, pulls down the developmental distinction between the countries and reduces global poverty.
Similarly, one of Turkey's economic issues, which will be discussed heavily in the near future, will be growth potential and realizations.
Because of the inclusive growth, which has been frequently discussed and targeted in recent years, is as much political as it is economic.
When we look at Turkey's economic and political history, we can easily see the direct connection of growth and the share of growth to politics.
The average growth rate for Turkey throughout the Republic history corresponds to a trend of around 5 percent. We cannot say that an economy that has been cut off by the coups and tutelary coalition governments and condemned to the International Monetary Fund (IMF) prescriptions evaluates its workforce and other production potentials and dynamics at full capacity. The account of a growth rate that provides full employment can be quite difficult for a country with a dynamic workforce, such as Turkey, but we can say that, in theory, a growth rate of 5 percent is not a growth rate that provides full employment - one that includes the natural rate of unemployment created by workforce transitivity. This average growth circulates the economy in Turkey financially and monetarily, meaning that it only supports the banking system and brings an internal and external debt cycle. Apart from that, it does not provide prosperity for households as a result of high saving, or global technology investments and global competition/capital exports for private companies.
You can see it clearly if you look at Turkey's growth rate before and after three major coups. During the Democratic Party period, the first elected government removed from duty with a coup (1950-1960), Turkey grew by an average of 6.4 percent, and Menderes and his friends disrupted all the balances with this growth rate. As Turkey's interior capital balances began to deteriorate with this growth, Turkey, by stepping in the industry, started going beyond an importing and debt paying economy.
This new emergence exceeding the forecasts of the IMF, which stepped in Turkey during single-party period in 1947, frustrated the forces of foreign capital, mainly the U.S. indeed, after the May 27 military coup, Turkey's growth was pulled down by the putschists. The first thing the National Unity Committee (MBK) did was to take measures to reduce the growth below 4 percent and to destroy the industry.
In the following years, the Republican People's Party (CHP) and Justice Party (AP) governments maintained a growth rate of 5 percent desired by the IMF, but the economy programs imposed on Turkey at the time also created the economic ground of the 1971 military coup. March 12 supporters fixed the growth rate at 4 to 5 percent. Turkey, following March 12, re-entered a rapid growth pace. However, this growth was at the same time accompanied by a colonialist economy-policy aimed at lifting the industry, pulling up the debts, transferring and borrowing resources rather than bringing them into the country, and the country had to take the economic decisions in early 1980, which made the Sept. 12 coup inevitable.
During the Sept. 12 period, the first goal was the uninterrupted payment of the debts of the country. For this, wages were frozen, resources were transferred outside with high devaluations, and the growth was reduced to around 2 percent. During this period, those ruling the country did not have a purpose, such as to prevent inflation, as they claimed. They wanted to pull inflation down not because they thought about low-income segments. In this period, the rate of increase in foreign exchange rates and interest rates were targeted to be above inflation. What is important here was not the inflation rate, but the main issue was the fact that interest rates and the devaluation rate were above the current inflation rate. Because in this way both wages were being put under pressure by inflation (inflation was being used as an income transfer mechanism from the rich to the poor) and the resources of the country were transferred outside with real high interest rates.
Compared to Demirel period's policy, which was based on internal colonialism and was unsustainable at some point, it can be said that this policy was more realistic and suitable for the conditions of the world at that time and also revealed Turkey's export potential, but all this time, including the Motherland Party's (ANAP) ruling periods, it put forward a suppressed economy that destroyed the shrinking middle class and was condemned to external capital inflows, and during this period the growth was between 2 and 5 percent. The 1994 and 2001 crises emerged as the finales of all these periods.
After the 2001 crisis, there was a fundamental political change in Turkey with the beginning of the Justice and Development Party's (AK Party) ruling era. Erdoğan took a new turn by giving way to the IMF in 2008, after patching up the 2001 crisis and the destructions of the past. And, President Recep Tayyip Erdoğan's economic period started with the high and inclusive growth tempos of 2010 and 2011, following the 2009 obligatory contraction.
The "external forces" then realized that this emergence would change the fate of Turkey, and the next story started to take place between those defending the thesis that Turkey should grow by over 5 percent and those saying, "It should not grow, otherwise there will be inflation and current account deficit, and the debts will not be paid."
Currently there is a conflict between those who want Turkey to drop the 2018 growth below the Medium-Term Program and those saying, "No, Turkey will grow by 7 percent and above in 2018 and after, and the decrease in interest rates, improvement of the investment environment, rapid acceleration of exports, and shell change of the industry will be possible with this qualified growth, and if this happens, we will find a permanent solution to inflation and current account deficit." This conflict seems to be technical and economic, but it is essentially political.
I would argue that in 2018 and after, Turkey will far exceed the 5 percent average imposed up until now. But at the same time, it will also leave behind the concept of a colonialist and unscientific economy and policies that eye our prosperity and pull down our potential.
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