Turkey pushes the button for new economic growth plan
by Daily Sabah
ISTANBULMar 13, 2015 - 12:00 am GMT+3
by Daily Sabah
Mar 13, 2015 12:00 am
Prime Minister Ahmet Davutoğlu, together with a panel of ministers, announced the new economic growth plan that covers issues ranging from creating new employment to tax concession for capital increases
New initiatives have been adopted for economic growth following the economic assessment meeting chaired by Prime Minister Ahmet Davutoğlu with the participation of ministers. A total of 200,000 people will be employed in public utility professions. An interest subsidy will be included in commercial loans, while the resource utilization support fund will be cancelled for the import of export-oriented intermediate goods. Prior to the June elections, an employment package offering more job opportunities for youth will be realized and tax concession will be available for capital increase.
A new economic reform package with a special focus on production, employment and investments is designed to ignite growth. The duration of initiatives with tax reduction and premium discounts will be extended by one more year. The related regulations have been submitted to the Cabinet. The fund for a gradual employer's national insurance contribution will be extended by two years for those making investments in the first zone, and 10 years for those making investments in the sixth zone. Additionally, the amount of investment contribution in tax incentives, which were due in December, will reach 50 percent.
The 200,000 employees to be assigned to public utility jobs will be engaged in environmental cleaning, restoration, forestry, park design and renovation of public areas. Temporary jobs will be offered to those who do not earn any living and are unable to receive social aid. Similar to the current practice in Europe, these individuals can work in two- or three-hour temporary jobs. There are also important regulations in the package's investment section. Initiatives for big industrial investments will be promoted and the manufacturing industry will be strengthened with financial support. The expenses of industrialists will be reduced through employment incentives. Carefully prepared by the Ministry of Labor and Social Security, the new package is planned to decrease labor costs.
Public banks will offer loans with low interest rates to less-developed regions around the country. New funds will be available by encouraging private financial institutions. Businesses in the southeastern and eastern Anatolia will receive more financial resources from public banks.
Minister of Development Cevdet Yılmaz said that the revision in national income accounts will be completed in 2016. "I believe that our national income is higher than it appears," he said. Yılmaz said that they will maintain the current monetary policy to support growth when the current fluctuations alleviate. "The appreciation of the dollar might affect inflation negatively, but the decrease in oil prices has positive effects. We strongly believe that we can achieve the inflation target easily," he said.