Şimşek: Turkey should ensure political stability for 2023 goals
by Daily Sabah with AA
ISTANBULSep 15, 2015 - 12:00 am GMT+3
by Daily Sabah with AA
Sep 15, 2015 12:00 am
While the caretaker gov't is expected to prepare a budget to address national problems, Turkey will lose what it has already gained within the last 13 years if reforms aren't continued to maintain 2023 goals, said Fin. Min. Şimşek in a televised interview
Interim Finance Minister Mehmet Şimşek said if Turkey fails to ensure political stability and to conduct reforms, it will neither maintain current gains nor achieve its 2023 goals. Turkey is in dire need for a strong and stable government to have a strong hand in global competition, he added.
During a televised interview, Şimşek said if the Justice and Development Party (AK Party) had not strengthened Turkey's foundations with structural reforms, it would be facing major troubles today. "Despite all these acquisitions, Turkey is going through political uncertainties, its growth rate is below its potential, inflation is following an upward trend and the Turkish lira is suffering major depreciations. The risk premium caused by political uncertainty plays a great role in this," he said.
The minister said the AK Party government did not remain insensitive to people's demands and fulfilled them by taking budget disciplines into consideration. He criticized opposition parties' vain economic promises that are found credible by people but result in tax hikes when practiced.
Underlining the significance of political stability for the economy, Şimşek said reforms are avoided as they yield results in the long-term. However, reforms bring rapid improvement in the short-term. The minister also emphasized that the fine balance between fiscal disciplines and the needs of various segments of society should be observed well, adding that futile promises, as made by opposition parties, would result in the loss of credibility in the eyes of society. If Turkey's fiscal discipline is wasted by election calculations, Turkey will face twin deficits, he said.
According to Şimşek's statements, the reason why Turkey was affected least by all adverse developments between 2002 and 2014 was its political stability and reforms. "But for reforms, Turkey would stagger and make no progress as in the 1990s," the minister said, adding: "Fiscal discipline cannot tolerate long-term political vagueness."
The Constitution stipulates that the new year's budget should be submitted to Parliament by Oct. 17, however, it is common knowledge that the budget that will be prepared by the interim government would remain obsolete and fail to receive parliamentary approval before the Nov. 1 election.
"As [interim] Prime Minister Ahmet Davutoğlu ordered, we will not like a caretaker government, but [will] like a true government and address national problems in this way. This is also the way we will prepare the budget," he said.
Şimşek underscored that the European Union is still the best reference in terms of the rule of law, democracy, rights and freedoms, continuing: "It is not a question of Turkey's membership in the EU. It is all about the continuity of structural transformation, the strengthening of institutions, the improvement of standards and smoothing the way for Turkey in the long-run." Şimşek also emphasized the requirement for additional reforms, suggesting that what reforms would prioritize and what benefits they would bring should be discussed during this pre-election period.
According to Şimşek, the economic gains that Turkey has achieved over the past 13 years are under threat. If Turkey cannot ensure political stability and conduct reforms, it will neither maintain current gains nor achieve its 2023 goals. Turkey is in dire need for a strong and a long-running government to have a strong hand in global competition. The troubles facing developing countries will not diminish, he stressed.
Touching on the United States Federal Reserve's possible interest rate hike, Şimşek said the Fed will normalize its monetary policy sooner or later and will launch an interest rate hike in line with its national interests. The minister also suggested that Turkey should act independently from the time when the U.S. will make a decision on the interest rate hike, and increase its robustness against shocks and these sorts of decisions.
In reference to Turkey's political agenda, Şimşek said it is completely wrong to associate the recent escalation of terrorist attacks with the AK Party's failure to achieve the vote share that would allow it to come to power alone. "This is political propaganda and there is no grain of truth to such claims," he said. Şimşek said the Kurds achieved more freedoms during the AK Party rule than they did during all previous periods. Despite the government's efforts to expand Kurdish rights and freedoms and to improve democratic standards, the PKK terrorist organization did not lay down arms; on the contrary, it accumulated more weapons, he added. Şimşek said a more democratic and prosperous Turkey would be for the good of the Kurds as well, and underlined it is wrong to say that the reconciliation process has been for naught, considering that the local community does not support this uprising as they acknowledge and appreciate the reconciliation process.