As elections are approaching, we can see that Ankara is doing its best to devise as many measures as possible against the disruption in economic parameters. First of all, I must indicate that a certain part of this disruption is foreign based, which respectively are the Fed decisions, protectionism concerns and geopolitical developments. They all bring significant impact on both the parity and commodity prices.
Another part of the disruption arises out of both domestic and foreign-based developments, which respectively are decisions by credit rating agencies, volatile movement in oil and food prices, increasing interest rates, recent developments in Syria and in the region. Either natural or artificial, these are the elements bringing negative impact on Turkey’s fragilities.
And the last reason is directly correlated to the choices or preferences Turkey made or Turkey’s position. High growth, high foreign trade deficit, high current account deficit, high inflation, high foreign debt, high interest rate and high employment, all originating from Turkey’s current economic model, are among the key “domestic causes”. Born out of indirect taxes and additional tariffs, written out as a prescription for the abovementioned problems, yet failed to ameliorate not even as slightly as a medical dressing, the massive disruption in investors’ perception also makes the list. And finally, the fact that Turkey is being constantly subject to a system change is listed among the outstanding reasons.
The same old story of “It’s the best we can do”…
This being the case, I’d like to remind you that USD/TRY’s journey, which has taken off at 4,50, still continues and also there’s the possibility that benchmark rate may be expected to hit new record highs.
I often wonder what we would have to lose if we made some effort to render companies more powerful in foreign competition instead of offering lots of incentives in order to protect ourselves in domestic competition or if we made producing high tech our top priority in lieu of focusing solely on the construction sector. If you ask me, we would have nothing to lose.
I also would like to tell you that the populists saying, “It’s the best we can do” are as wrong as the elitists saying, “we can not do this”. Populism is a type of elitism after all; because, both philosophies are designed to decide what people can do or cannot.