First of all, this is not about the demand-pull inflation, because demand is currently pretty fragile. In Turkey, companies are not standing in a position where they are working day and night to meet the crazy high demand. More importantly, consumers are smarter now. They do not avoid spending their money to get high quality products and services.
And because of the practices implemented by those who fail to realize this very fact, inflation never stops rising. I always ask this question to those insisting that if we want to get foreign brands, we should pay for it: “Are capable of manufacturing the same high quality product?” Answers of course remain quite unsatisfying.
Here’s a very simple example: Are we capable of making footwear that Nike, Adidas, Puma and other famous sportswear brands are spending fortunes to use injury prevention technology in activewear? We are not. Those who say, “We can!” are extremely wrong. They think they can get the job done if they can manage to manufacture a physically identical copy of the shoe. If any of those shoes made by the abovementioned brands caused injuries in tennis, basketball, football or volleyball players, these big brands would have collapsed a long time ago. But they did not because they do not simply sell shoes. They sell design!
In Turkey, on the other hand, those, who became jealous of these brands on the ground that they make tons of money, keep putting pressure on the government so as to push them to raise customs duties thereby becoming the main reason for the ever-increasing inflation. Nonetheless, Turkish citizens do not want to buy their products, they want to have the foreign ones since they are equipped state-of-the-art technology and quality. These international brands provide millions of dollars of fund to the Turkish sports. They always aim for the better, achieving constant improvement in brand, design, innovation, technology and health. They collaborate with the researchers and scientists to devise and manufacture lighter, more durable and efficient products. Tell me a single company in Turkey that is doing any of the things I mentioned above.
“Don’t be jealous, be inspired and work hard…”
There’s something unique to Turkey: being jealous of creations of others, who have spent decades to get where they are today by others over the course of decades, trying to prevent them from operating in Turkish market under the pretext that young Turkish people are buying their products whereas they should have bought what we offer, and finally become an utter failure despite all those trade barriers and protectionist walls. It is reported that Turkey manufactures 400 million pair of shoes per year however 50 per cent of these shoes are made from plastics and exported to the Middle East. And the other half meets the relatively quality standards. The footwear sub-industry, on the other hand, remains below the internationally recognised quality standards. Despite all those protectionist measures which have been in effect for 4 years now, Turkish footwear companies are hardly standing.
Why am I telling you all this? Because according to inflation data released yesterday, month-on-month, clothing and footwear prices reached peak level. I guess it’s a peculiar feature unique to Turkey to make people pay tons of money to recover the manufacturing costs and then still not manage to thrive. If this sector chose to become strong enough to engage in international competition instead of begging for protection in domestic competition, things would be quite different right now. Footwear Industry is just one example of the disruptive impact of protectionism on Turkish economy today. Other sectors are currently facing the same fate.
All sectors in Turkey should focus on excelling at foreign competition and exporting activities. They need to learn that it is not enough to be strong in domestic competition, quit putting pressure on the government to make their rivals more expensive and start convincing them to reduce manufacturing costs, and finally learn how to wait patiently for making money by doing the right things instead of feeling envious of other people’s affluence.