I think I have been working since 1989. Almost 30 years now… I took so many positions in a variety of industries, including Tourism, Defense, Sports, Music, Iron and Steel, Textile, Finance, Insurance, Communication and Software. Therefore, it is not possible for me to be humble when I talk about my area of expertise. I have never been humble but I am not a bragger either. I’m always eager to learn.
I knew so many closed-minded, hidebound people as well as those who could never fully achieved anything when trying to design big changes or transformations despite their inadequate background. But the worst type are those who adopt the “facts that are actually false” as their roadmap, causing them to be eventually caught in a cleft stick.
So, with the idea of ‘preventing more people from facing such problems’ in my mind, I decided to take one more step further and repeat once again all the things I have been trying to explain over the years. But we’re going to make a Q&A this time. Here we go:
– Is it possible to boost exports by imposing trade barriers to imports?
– No. That is not the way you gain power in international competition. These measures to restrict imports are offered as a gift to certain companies. The side effects, however, have been enormous, most importantly high inflation.
– Will protectionism help reduce Current Account Deficit?
– No, it will not. Turkey has been trying to reduce current account deficit using protectionism since 2014. Turkish current account deficit hit record highs, let alone getting shrunk. The reason for the present decline in current account deficit is the fact that Turkey’s GDP growth rate is slowing down. This is not an achievement.
– Can we reduce imports by levying taxes on Consumer Goods Imports?
– No, you cannot; because these goods do not comprise about even 10% of Turkish imports. The rest consists of raw materials, intermediate and investment goods, which means we have to import in order to produce. The reason why Turkish imports are in decline today is because there is a decline in manufacturing to begin with.
– Can current account deficit grow while GDP growth rate is slowing down?
– Yes it can, if energy prices start rising sharply.
“What’s the biggest problem for Turkey?”
– Can we reduce inflation through financial measures if there is no Demand Pressure present?
– No, you cannot. But if you inşaat, economic slowdown will lead to a combination of stagnant economic growth, high inflation and high unemployment, in other words stagflation.
– Given the fact that no demand-pull inflation is present, will the “instant 10% discount” campaign help reduce inflation?
– That is not the way you reduce inflation. People are supporting this campaign out of desperation. But, urgent measures should be taken to reduce cost-push inflation.
–Will Dollar/TL fall if CBRT sells $10 billion three times in a row?
– CBRT does not have enough reserves to sell $10 billion three times in a row. So, I will not even bother answering this pointless question.
– Do interest rates cause inflation?
– They might. Just like the chicken or the egg causality dilemma… But first we need to ask this question: “What causes interest rates to rise?” Government spending, increasing country risk and inflation are only a few of the forces behind interest rates. If there really is an ‘interest rate lobby’, these are the forces that very well serve this lobby.
– Are the NEP (New Economic Programme) targets realistic?
– Well, some of them.
– Will the Government cut the public spending?
– According to the NEP, it will not. Primary Surplus target, Real Interest Rates and GDP growth rates indicate my prediction.
– What type campaign does the Government need to promote domestic products?
– There is no need to launch any campaign. The only thing that domestic firms should do is to be decent and realistic. They shall stop getting their strength from protectionist walls and avoid selling average quality goods at relatively expensive prices. They shall support Design and R&D. They shall achieve success if they keep going without yielding.
– Will Dollar/TL rise again?
– Apparently, you are not tired of asking this question over and over again. Take a look back upon the past. You will find the answer. OK then, here is a tip for you: Grab a piece of paper, write down the causes of increasing exchange rates and the factors that influence the decrease in value of exchange rates, and make a decision.
– Is the “fund problem” actually the biggest problem for Turkey?
– No, morals and education are two major problems in Turkey. Finding funds is easy. But the others require time and effort.
