Published On: Thu, Sep 13th, 2018

President Erdogan says Turkey is shifting to “production and yield” economy

President Erdogan says Turkey is shifting to "production and yield" economy

President Erdoğan


Turkey’s president who attended the general meeting of TESK in Ankara on 13th September 2018 delivered a speech in which he shared very critical points about the future of Turkish economy. ERDOGAN said Turkey was determined to shift to “production and yield” economy.

The president stated Turkey was passing through a critical period and everybody witnessed the events it had gone through for the last 5 years. He said “We have been subjected to all kinds of assaults, from shuffling the streets to attempting to strike and economic onslaught. Despite so many negativities our political stability, social integrity, our economy was not damaged. Some parties are constantly trying to relate the name of our country to negativities.

Turkey, despite coups incurred in the past, is a country where people have always used their preferences in favor of democracy. We showed in the free elections we applied uncompromisingly that we are a democratic country in the most advanced standards.

When we established our Republic, we first preferred the statist economy because of the conditions and trends of the period. After we stepped into the multi-party political life, we shifted to mixed economy. Along with Ozal (a former president), we went for the free market economy. During the AK Party period, we strengthened the free market economy by opening our country to the world. This way, we managed to attract the investments we were in need of to grow to our country. While we grew our economy by 3.5 times, we have made it the 13th economy according to the purchasing parity and the 17th economy according to the national income. When we look at the incidents we have recently encountered, we see that the secret or open onslaughts against our country are neither related to democracy nor the free market issue. Funds in circulation in finance and investment areas have started to accumulate at certain centers. We can understand the shrinking of investments because of this tendency.

We are confronted with another situation here, as it is not a democracy or free market economy issue. Of course, when we say these, we know that we need to take steps to improve our democracy and economy further. Difficult times require hard decisions. We work day and night with our institutions, especially our economic management, under my coordination, personally.

We are putting into effect powerful saving measures. We will limit vehicles used by civil servants in public services in terms of quantity and quality. We leave almost all of rented offices to have a considerable amount of savings. We will also watch out for savings in regards to staff recruitment for civil services. We are determined to contribute to the budget balance by achieving the highest possible savings in public expenditures. We will shift to “production and yield” economy.

We will complete ongoing projects but we will not start projects that have not been tendered yet. Right now we’re leaving them aside. The current situation requires this.

We have private sector banks. According to what do these banks act? According to the decisions of the Central Bank.  When we look we see interest rates up to 50 percent. According to what will the real sector investor make his investments? My sensitivity about interest rates has not changed. Does any of you operate with 50 percent profit? There is no way we can contribute to usage of this exploitation tool called interest.

When we look at the relation between these two, interest is the cause and inflation is the result. But if you say that inflation is the cause of interest, you don’t know the issue. You determine the interest rate, but inflation simply occurs by itself. Until today, I have not seen that the inflation rate announced by the Central Bank has ever come true.

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