The first half of January, especially this week, comes to an end with some pretty pulsating events. As you may remember, by this time last year, it was predicted that the world economy would face great increase in global inflation, interest rates and growth. It was even emphasized that the period of 2019-2021 would be dominated by the above said trio.
At this point, Turkey and some of its counterparts stand out negatively among other world countries in terms of GDP growth. Economists warn that US economy may enter recession in the couple of years while China faces an economic slowdown. EU’s leading countries are hit by unexpected problems.
Here’s the interesting thing: Cause and effect relationship between economic disruption and political tensions seem to intermingle. And this mess starts to create a loop after a while. Political and economic problems are arising one after another. Economic losses, diplomatic problems caused by Trump and his actions, low global confidence in Trump economy are hard proofs of current global uneasiness.
Meanwhile in Turkey, the ongoing process of change in executive, legislative and judicial powers obviously bring some challenges. Given the fact that things aren’t exactly falling into place in executive branch of the government, Turkey’s key sectors will have to be patient for a little while more so as to be granted a proper solution. On the other hand, we can see that government makes great efforts to tackle the issues of banking industry.
“Financial Sector must contribute as much as possible…”
Sharp decline in Construction and Housing Industry, which have been the two major growth engines of Turkish economy over the last 10 years, doesn’t go unnoticed either. Sales hit almost rock bottom in spite of rising prices. Iraqi citizens rank first as property-buying foreigners all around Turkey, which means that Turkey is slowly becoming a “safe haven of the Middle East”. Maybe this is the reason why “net errors and omissions”, which finances the current accounts deficit, is ‘too big’. The owners of this money of unknown source and origin could possibly be those millions of people who come to Turkey to start a new life here. More than 6 million foreigners are currently living in Turkey according to official data. It is also a well-known fact that grey economy maker a large part of formal economy countries where these people come from. I’m ok with it as long as they spend their money legally.
However, necessary measures must be taken to prevent them from bringing their ways of working and making business into Turkey, who shall never turn toward informal activities again, especially after many years of struggle to recognise Financial Documents valid for purchase and sales.
Accordingly, I strongly believe that any type of assets owned by foreign people living in must be recorded by means of financial system. And various monetary instruments such as debit or credit cards can be offered to these people so as to improve their lives within formal economy.
Financial instruments can be introduced to areas that are largely populated by foreigners and they can be encouraged, though not to use credit card, but to spend with their debit cards. Creating a desire for “modern life could greatly depend on telling those people about the credibility of Turkish Banking Institutions.
In short, there’s major cash flow into Turkey, and its origin of remains unknown. But, I can more or less guess where it comes from. We can make this flow a permanent and recognised thing by creating various types of instruments for foreigners.