4 September 2010 Saturday      Articles     GLOBAL ECONOMIC DEVELOPMENTS AND AGENDA OF TURKEY - - - - - - - - According to the latest revised estimates of the IMF, the Global Economy will record a growth of only 3.7 % in 2008 referring the lowest development rate of the last 20 years despite of high rates of growth of China and India. The international financial crisis, triggered by the mortgage crisis, started to put whole world under its influence and show its effect on the fields from the finance to general economy. During the last five years, Turkey has achieved high rates of developments by taking advantage of the positive atmosphere that are come into being as a result of the general economical development in the world on the one hand and the reforms, put into practice in internal field as well as political-economical stability on the other, and all in all, a permanent 23 quarter growth trend. The country has remained with face to face especially with high current account deficit resulting from the US$/TTL exchange rate during the period successful economical point of view, however, financed its current account deficit by the foreign capital entry and hot money. Notwithstanding that this hot money contains a high cost, it continued to reduce the real interest rates upon maintenance of the stability in general, and maintain the sustainable development and growth rates. This economic turbulence or economic stagnation that started to affect whole world, mainly the USA had limited effect on Turkey as long as its political stability has continued. Nevertheless, low growth rates in the last quarter and total growth rates in 2007 have been realized as 4.5 %, just below the expectations. Comparatively low value of the economical values of Turkey, picking up the spirit of the finance sector especially in the last 5 years and strengthening of the same from financial point of view, development potential and attraction of high consumer population may be assessed as the grounds that will cause the foreign capital to keep entering in Turkey. When it is taken into consideration that another reason for high current account deficit is the high energy costs globally that form an important item of the import, it may be seen that the country moves forward in the way of becoming a strong economy with less fragility in comparison with previous periods. While these developments are experienced, the legal action, preceded against the AKP (Justice and Development Party), to ban it from political activities due to its alleged anti-secular activities may be regarded as the most critical development that may cause the rise of risk perception, deterioration of economic and politic stability and fall in the entry of foreign capital into the country gradually. The risk of this legal action to affect the Turkey’s relationships with the EU and difficulties that may be experienced in the entry of foreign capital into the country comes forward as the points that deserve consideration on serious manner from Turkey’s point of view. In the new era, Turkey is obliged to pay attention on vital issues despite all such as to reform its Social Security system that has been in an unsustainable structure for a long period, bring down the unemployment rates that could not have been reduced to the desired levels even if at the periods when the growth rates proceeded over 5 % and develop the competition abilities of KOBI (Small and Medium-Sized Enterprises) and other economic fields. The employment problem of 4 millions of people, who come out of the Agricultural sector, occupies an important place under the failure to bring down the unemployment rates to the desired levels, however, reduction of the unemployment rates maintains its existence as an important expectation. In this context, it should be regarded as an important necessity to put the expansion and development policies of professional high schools and apprenticeship training pertaining to the training of qualified personnel on the agenda and improvement of the unemployed. The actual developments such as the slight moves in the inflation rates of the month March, announced lately, (monthly increase by 0.96 % in the Consumer Price Index and making the yearly inflation reach 9.15 %) and change of the grade of the economical appearance of the country by Standard & Poors from the “stability” to the “negative” put forward the fact once again that the Government should not lose the control of its economic-focused perspective. The filing of the legal action to ban the AK Party at a critical stage of all economies throughout the year and its international effects become twice as much important from point of view of Turkey. When we consider that the economical growth in recent years has arisen from the general economical growth in the World and Turkey’s candidacy for the accession into the European Union, a banning action that cannot be thought about in democracies may create substantial destructions in the future of Turkey and future of Turkey-EU relationships as well as the social, political and diplomatic fields of Turkey and all parties in this context will suffer from its consequence. While there are lots of problems that Turkey currently is face to face with such as unemployment, economical growth, problems in income distribution, regional economic and social instabilities, main education and sub-structural problems, other regional problems related to the international developments (Middle East-Balkans) but may be overcome with the political stability and strong democracies, the requirement of focusing for the political stability would mean to spend the energy of the country necessarily in these fields. It appears to be not possible to overcome these problems without stepping into a law and order system at modern standards and full democracy. Turkey may deal with its problems especially in the context of especially full democracy-rule of Law and division of powers with a constitution due to be achieved with the launch of an all around and extensive participation and contemporary democratization move. Turkey, as a country that cannot situate the democracy and rule of law into universal standards will not have the opportunity to overcome its problems in the economical and political arena as well.   Denge Araştırma Ltd. Şti. 2008 All rights are reserved.