The Achilles’ heel of the Turkish economy – the final part
| The possibility of producing products with the highest added value has reached Northern Europe, products with medium added value are in the hands of Southern Europe, and production with low added value has been left to Eastern Europe and Turkey. |
One of these experts is Mehmet Ali Varchin, a famous Turkish economist and banker He launched an interesting Twitter account with Mehmet Shimsek, the Minister of Finance and Finance and the economic all-rounder of Erdogan’s government.
They are considered to be structural of the Turkish economy and apparently have no short-term cure. Together, we review the final part of Shimshek and Mehmet Ali Verchin’s long discussion:
Mehmet Shimshek: In the 5-year period of 2018-23, while currency price increased by 36.4 percent, exports We only increased by 5%.
What does Mr. Wazir mean by this vague sentence? Let us explain. As currency price remained at reasonable levels during the period 2018-2023, exports from $177 billion increased to 266 billion dollars.
During this period, the increase in exports was 89 billion dollars and the growth rate was 50%. But in the period of 2013-2018, exports increased from 161 billion dollars to 177 billion dollars. That is, the increase rate was 16 billion dollars and the growth rate was 10%. ” Became. But let’s not forget, this increase in exports created very important side effects. In such a way that both inflation went up and we registered more debts. Time can become permanent. But on the condition that the price can be maintained. The basis of increasing exports lies in the “price maintenance phenomenon”.
. This is where the negative effects of importing raw materials and their sudden high prices come into play.
If Turkey was an economy that could produce advanced products like Apple or Microsoft export, maybe a slight increase in the dollar or lira rate was not so important. But Turkey is an economy that produces mid-range technological products that almost everyone can produce. As a result of the continuous depreciation of the lira against the dollar and the increase in inflation in Turkey, it is the Achilles’ heel that both imports and consumption and It affects production and export. This is the big defect that does not allow Turkey to become industrialized and it takes away the ability to hire us, and we are constantly facing an increase in the number of unemployed.
Mehmet Shimsek: Getting a larger share of world trade and making Turkey’s profits and achievements permanent is possible only by increasing productivity, innovation, high added value and branding.
It is impossible for me to disagree with this beautiful and brilliant statement of the minister. It is completely scientific and appropriate. But let me also say this, Turkey’s macroeconomic policies are actually anti-high added value, anti-productivity, anti-branding and anti-innovation! It is not possible to achieve what Mr. Shimshek says with these policies.
Turkey, customs problems and added value
Since the right to produce value-added products is practically shared between the countries of the customs union, Turkey cannot produce high-value-added products. , products with medium added value are in the hands of Southern Europe, and products with low added value are left to Eastern Europe and Turkey!
Turkey can only produce at the base and bottom layer of this pyramid.
Another reason why Turkey cannot produce added value is the absurd free trade agreements and It is strange that he signed with Japan and Korea. Contracts that are far from reason and logic! Why? Because they export many products to Turkey without paying customs duty, but we have nothing to export to their country! So they profit. So let’s have a realistic view about the customs union and the free trade agreement. . Almost all car production and exports are foreign-owned, and the most valuable car parts produced in Turkey definitely come from abroad. capture and exploit consumers with high profit margins and also prevent the development of our consumer products industry.
As long as the customs union and free trade agreements are in place, never, ever Turkey’s export products, with the exception of defense industry products, do not even exceed 5% of total exports. But unfortunately, both the government, Mr. Şimşek and Turkey as a whole are pushing for a new customs union agreement! There is no one to tell us: why do you want to sign a free trade agreement when you still don’t have a product with high added value?
Mr. Minister protested my words and said: “For the next three years, we will allocate 100 billion liras of resources every year to those who produce products with high added value in 284 areas. ». It means that they can’t compete with foreign manufacturers, and in addition to problems in the quality department, we will also have problems in sales, and the high price will not have a competitive advantage.
Know these two great weaknesses of Turkey correctly
I want to emphasize that low productivity in Turkish economy, one of the most important problems and Our weaknesses. This problem is directly related to the issue of added value.
Besides the big problem of low productivity, we are in We are also very weak in financial and investment capacity. Let me explain this second issue to you clearly. You know that Mrs. Hafizah Ghaye Arkan was dismissed from her post.
I consider this action of the government very correct and appropriate. I remember that Ms. Arkan announced in a meeting: “We asked him to introduce three sectors to us in a meeting with the President and let us work in those sectors to achieve added value”. I don’t know if Mr. Erdogan has answered this request or not. But personally, I introduce three areas:
1. Chip.
2. Battery.
3. Smart display.
Let me tell you how much water it takes to set up a production line for these items. An average chip manufacturing plant requires an investment of $10 billion. A battery factory needs four billion dollars and a smart display factory needs five billion dollars in financing.
Chip to invest 10 billion dollars in Turkey? The short and definitive answer is: No. It doesn’t exist. Image/1402/11/18/1402111817123582529344744.jpg”/>
Suppose a group ventures and on the line come and say: “If there is credit and facilities, we are ready to work”. Question: Is there a bank or a group of banks that can give this company a loan of 10 billion dollars? it is not clear. We have no answer.
Suppose all production problems are solved and a chip production center is established in Turkey. Are there companies that can design and shape all the chips produced by these facilities and turn them into the final shape desired by the industry? it is not clear. We don’t have an answer.
Suppose we have companies that produce smart chips, batteries and displays they do. Do we have other companies that produce electronic products with sufficient capacity to consume these products? it is not clear. We don’t have an answer.
Let’s leave the definitions aside. The answer to our questions is negative. In this case, shouldn’t we wake up from the dream of producing products with high added value and face the facts?
Turkey’s attempt to produce value-added products without protecting its industry, that is, without leaving A customs union and revision of free trade agreements would be a futile adventure.
Turkey should accept that chip, battery, smart screen, LEDAnd lasers, optics and many similar industries have at least as much strategic value as defense. It should then apply similar protections to the defense industry for many years without hesitation and generously from these sectors. If not, it cannot produce value-added products.
| Publisher | Tasnim News |
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