I Wonder If We Will Ever Have Rational Policies.
The seating arrangement and the harmony at the Economic Coordination Board (EKK) meeting held last week showed us that the economy is completely coordinated by the President. A big difference between what was hoped for and what is actually happening.
Apparently, the framework of the economic programme will be shaped by President Erdoğan, and the data provided by the economy officials will be made into a calendar. It looks like they will try to carry out an agenda that is solely determined by the head of the state, not an agenda covering all segments, especially the low segments of the society.
When I met with business people in the provinces of Muğla, Gaziantep, Kayseri, Bursa, İzmir and Aydın last month, they all were worried about the increasing costs and the difficulty of accessing financing. However, I do not think that the members of the EKK are fully aware of or actually care about the details of these problems. I have warned my acquaintances in economic positions and my friends in professional organizations many times before:
“Do not implement new projects, new programmes or prescriptions without properly analysing the economic impact of previous practices and measuring their success rate. As you do this, you tire both the country and its economy.”
This is true not only for the macro scale, but also at the micro scale practices. If an organisation constantly changes its strategy, constantly tries out new models, after a while the staff would have difficulty in following up, and eventually they would give up being engaged or committed. A certain degree of stress is necessary for success, but putting pressure on employees to perform practices that do not have clear goals and cannot be measured is the absolute wrong style of management.
The economy administration needs to see that it can replenish the country’s insufficient foreign currency reserves only with the right monetary policy, not by seeking and finding funds alone, that it can improve the budget deficit by having fiscal discipline, not by financing it through debt, and that it can eliminate the deterioration in pricing behaviour by restoring the supply-demand balance, not by controlling the market. Normalization or rationalization will never be possible unless the government admits that it is applying the wrong policies.
The soon-to-be-announced economic plan and the CBRT’s rate decision will be a hugely determinative factor in the future of the country, but I unfortunately think that neither of them will involve the exact course of action the Turkish economy desperately needs.