6 Turkish economic problems that have been repeated in the last 30 years

According to Webangah News quoted by Tasnim News agency, the economic crisis continues in Turkey and the US dollar in This country is still at the border of 33 lira. This is despite the fact that 14 months ago and before Erdogan became the president of this country for the third time, every US dollar was worth only 20 lira. and development, asked the people of his country to save and practice economic austerity in order to pass this path as soon as possible.

Politicians and economic analysts of Turkey are angry with the words of Erdogan and Mehmet Shimsek, the Minister of Economy of this country. The constant insistence of these two famous figures on the issue of saving and economic austerity does not shine and they consider it as a political trick to escape responsibility. 

In his speech in the Turkish Parliament, the leader of the Good Party or “Ei Party” Ezvan Dervisoglu criticized Mehmet Şimşek and said: “Şimşek and President Erdoğan are talking about austerity day and night. But now we see that Erdogan, instead of enduring economic austerity himself and leading the presidential palace on the path of saving, is greedy for people’s pockets and pays for the extravagances of the presidential institution through heavy taxes! Let me be blunt, the only person who is still spending money in this country is none other than the president. It is Erdoğan who should think about ending the extravagance, not the people”. It is beyond inflation and short-term problems. One of Turkey’s famous economists named Mahvi Egilmuz believes that Turkey’s economic crisis is not a temporary inflationary storm and that the country has structural economic problems that started 30 years ago. Therefore, they have been constantly repeated. 

Ahmed Mahvi Egilmuz, a professor at Ankara University, who worked for a long time at the World Bank and was the Deputy Minister of Treasury of Turkey for several years, has written and published 13 books and hundreds of articles about the Turkish economy. He is a special researcher for the study of historical and economic developments in Turkey.

Aghilmuz has recently published a report that he sent to the economic deputy of the prime minister of Turkey, Akram Pakdemirli, 30 years ago.

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Aghilams announced: Today, when I read the report of 30 years ago, I found out the bitter reality that none of those problems have been solved. In that report, I mentioned some structural problems of the Turkish economy. At the same time, the prime minister, on the advice of his deputy, read the report carefully and evaluated all its clauses as important. But they did not follow any suggestion. Not only them, but also the subsequent governments, did not think about solving the root problems and our economic situation has worsened year by year. 

According to Mahvi Egilmuz, the Turkish economy has been continuously facing these problems in the last 30 years and the governments have not been able to come up with a plan to overcome this situation:
1. Turkey is always suffering from inflation. It has been increasing day by day and the middle class has lost a part of its economic power year by year and now it is practically disappearing. 2. In 1991, Turkey was in a bad economic situation like today. , but it was not worse than today, and people’s purchasing power had not been lost to this extent.
3. In 1991, our total foreign debt was 54 billion dollars. But unfortunately today it is 500 billion dollars. This means that we have broken the historical record in borrowing from domestic and foreign banks.
4. You might think that in 1991, we had heavy inflation. no The legendary and back-breaking inflation of 1991 was only 65%, but today, we have rejected 75%! I expressed concern about the percentage, but now it has exceeded 8.5%.
6. Turkey has always had a structural problem in terms of budget management. But still, in 1991, despite all our problems, we did not have a current account deficit. While today we have a 2.8% current account deficit and our foreign trade deficit has also reached an unprecedented level and imports are much more than exports. It was today. In non-economic areas, we had a better situation than our current situation. But our expectations were high and we did not like the conditions at that time. Personally, I thought that Turkey deserved much better indicators. Finally, I prepared a new report called “Proposal of Economic Stabilization Program for Turkey” and sent it to Akram Pakdemirli, the Deputy Prime Minister. There is a very important truth that has been noted many times by neo-classical economists.

The problem of inflation cannot be solved by temporary reforms through monetary and fiscal policies. The way that government expenses are covered must be changed in such a way that people trust the political power.

In other words, the success of the economic stability policy is not just a matter of the market and numbers, but a completely human aspect. It also has a social aspect, which consists of this simple issue: the success of the government’s economic program is closely related to the credibility of political power. If people do not trust the government, the economic plan will definitely fail. 

The president should know that the public sector financing deficits are not covered by money printing alone! It should also be accepted that it is necessary for the central bank to be run independently of political power. The second important issue is to ensure the continuity of the measures taken and to create the belief that such problems will not arise in the future. The way to achieve this is through proper management and preventing the reduction of the budget deficit.

We must accept the fact that Turkey’s economic structure is trapped and falling into the cycle of repeating the economic crisis is directly related to It has our political issues. An important part of inflation and our problems do not have economic reasons and are related to the mistakes of the political institution! 

All the statements and evaluations we made show that both the institutional provisions and the economic program cannot be implemented without political determination in Turkey. This is the saddest result we have reached.

Therefore, the work of the political institution in Turkey is much more difficult than in developed countries. Because political authorities in developed countries are responsible. But the Turkish authorities are not accountable in planning, policy making and implementation and we can get rid of this situation when the government is responsible and accountable for all its economic actions.

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