As the June 24 elections loom, political parties are continuing to announce their election manifestos. The manifestos are required to not only be related to the pledges of presidential candidates, or in other words, to items of expense.
In the manifestos, for Turkey to avoid being exposed to both internal and external shocks and speculations it has experienced lately, or to eliminate these in a short period of time, the focus needs to be on problematic areas of the economy and the production side, in other words, the sources of the promises.
Hence, there is a need for political parties to focus on the problematic areas and production aspect of the economy, in other words, they need to present a new road map for a new success story in the economy.
So, what is this road map?
The current account deficit, which is one of the Turkish economy’s most important problems, is the result of foreign trade deficit and hence, the high dependency on abroad in terms of energy. Well, since Turkey constantly has a foreign trade deficit and if this foreign trade deficit is causing a current deficit, what should be the solution in relation to this?
Meanwhile, taking into consideration the 70 percent ratio of foreign dependency in energy and looking at the growth trend in Turkey, if the energy need in the upcoming period is going to further increase, what urgent concrete measures should be taken to reduce this?
Export is increasing, but the intermediate input for the production necessary for export consisting of import goods also reflects on import figures. So, what kind of a solution method or methods should be developed to decrease the rate of import input in export products?
Turkey’s most significant problem consists of an insufficient source of financing due to low savings. What kind of financial tools and methods should be developed and what kind of a path should be followed in this scope to decrease the continuous foreign dependency in the financing of investments and to consequently decrease the impact of the shocks that credit rating institutions and international banks and financial institutions want to create?
Although Turkey broke a record in export, the share of high-tech products in exports is low. What should be done for high-tech production and the production of high added value products?
On a different note, Turkey is one of the countries with the highest growth rate in the world. Yet, despite this growth performance, due to the activity in exchange rates, it is taking time for it to join the high-income economies. Right at this point, what should be done urgently for Turkey to go from the middle-income group to high-income economies?
Manifestos and budget discipline
The resource necessary to realize the promises made by political parties when revealing their manifestos is also important. Because it is quite clear that budget discipline is the most important economic indicator.
The most important reason why the recent increased activity in the exchange market in Turkey hasn’t caused an atmosphere of panic in the community and markets is the strong stance of public finance, the strongest aspect of the Turkish economy.
Therefore, in countries like ours, which has a current account deficit, it is necessary to pay attention to avoid a budget deficit, in other words, a double deficit risk.
We know that the reason behind the financial and loan crises we experienced in the past is also current and budget deficits, namely, dual crises.
It is difficult to ensure budget discipline, but very easy to lose this. Hence, budget discipline one of the primary topics we need to handle with the greatest sensitivity in the upcoming period.
Because the pre-condition of economic stability in Turkey is the strong stance of public finance.