As the constitutional amendment, which passed in the April 16 referendum last year, requires Turkey to switch to a presidential system with the June 24 elections. For me, the presidential system is a new period that will first eliminate bureaucratic difficulties in the economy for foreign investors and enable Turkey to rapidly carry out targeted reforms.
As President Recep Tayyip Erdoğan declared in the election manifesto, Turkey will take a strong step toward becoming more outward-oriented and a more democratic country and will completely leave behind a history that is full of military coups.
However, although the people of Turkey approved the new system in the constitutional referendum, a majority of the opposition talks about regression and a concomitant reactionary restoration.
Whatever the election results will be, Turkey will wake up to a new system and everything will begin to change automatically in Turkey on the morning of June 25. The legislative, executive and judicial bodies, in particular the state bureaucracy, will try to align themselves with this new era.
In this case, if those who stubbornly say that Turkey will return to the old come to power, not only will the wheels stop turning in all areas of society, in particular the economy, but they will also start dismantling as they roll back to the old.
The big capital holders and foreign investors cannot run this huge risk. No segments, including large working segments, small and medium-sized enterprise (SME) owners, tradesmen and farmers cannot risk this either. Moreover, beyond risk, going back is against both short-term and long-term interests of all these segments.
Such periods in the history of societies are revolutionary periods. In such periods, apart from the sovereign segment which is shrunken for being the representative of the "old," the interests of almost every segment support great change. So, at such times, great transformations happen peacefully, with great consensus.
The Republican People's Party (CHP), the roots of which are based on national socialism, and its followers, say that if they come to power, they will step back and return to the old and parliamentary system - which shows that they have already lost the election. This is because, both in the previous presidential system and in the referendum, the public approved transition to the presidential system, doing the great consensus twice.
Now, they say they do not recognize the historical election and great consensus and will start a reactionary restoration process and stop all the progressing things in Turkey. Do not doubt that the public will perceive this as a challenge against themselves on June 24 and will present a historic defeat to those who say this. For me, the failure to understand this will of great transformation will cause the national-socialist CHP and its followers to lose elections. They have already lost.
In the election manifesto, Erdoğan said, "Interest rates, current account deficit and inflation will fall." Now, this pro-reactionary restoration group cannot understand how these three will fall together. For instance, in countries like Turkey, inflation is not merely a monetary phenomenon, but is the consequence of bad economy policies that occur in the production side (cost) and affect the entire market. In this sense, high interest rates are the result of a colonial economy policy.
Swedish economist Knut Wicksell describes the rate of return on an investment as a natural rate, and says that if the natural rate is above the borrowing cost (interest rate), the economy will run, otherwise stagnation will be inevitable.
In other words, the average profitability ratios of industry in a country cannot be below marginal financing costs (interests). In this sense, high interest policy is debt and import economy, as such, nothing you consider market reality is market reality, but just the opposite. And high interest rate which is imposed by the financial capital as a monopoly definitely disturbs market balance and goes against market functioning and competitive market.
As such, wanting lower interest rates means supporting domestic industry. This eventually means fewer imports, more exports and less external deficits. The rise of production faster than demand means lower inflation.
On the other hand, an economy policy based on high interests leads to inflation and current account deficit. This is because high interest rates do not price anything with market prices, starting with exchange rates, in the real sense. So, anything, starting with local currency, cannot have competitive price and the industry cannot compete. So, you produce high current account deficit and inflation.
Depending on all this, Turkey will not give up any basic economic achievements it has gained in the Erdoğan period. For instance, a completely outward-oriented economy where floating exchange rate regime is in place and capital inflows and outflows are absolutely free is our main and inevitable starting point. Turkey will consolidate this economic path on July 24.
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