Former minister Derviş warns Turkey against slowest growth scenario

Speaking to Hürriyet newspaper in Washington, former minister Kemal Derviş warns on the global economy. “As the world faces the slowest growth scenario, Turkey will also be affected by this” said Kemal Derviş, Turkey’s former economy minister who is now the vice president of the Brookings Institution, in a recent interview to Hürriyet in Washington.

“Comparing with the data of 6-8 months ago, now the situation in global economy looks worse,” said Derviş, noting that the atmosphere reminds 2008 at some point. Having played a significant role in Turkey’s recovery out of 2001 economic crisis, Derviş said, “Turkey will be affected by the slowing economy.”

“It is impossible not to be affected by this slowdown, maybe only the countries with great reserves would not, but Turkey will be affected unfortunately,” he said. Having been optimistic, Derviş said that Europe would teach the world how to act collaboratively during the crisis.

“There won’t be a growth for more than one percent in United States,” said Derviş, noting that the world might face even zero growth in U.S and Europe during next few months. He also said the global economies could not recover due to “Keynesian politics” of the governments in general. “The economies recovered at some point with the Keynesian measures, but once the government stopped supporting the system, economy lost its momentum of re-growth.”

Having his name often called among the possible candidates to chair International Monetary Fund, or IMF, after Dominique Strauss-Kahn was arrested in May, Derviş also slammed the IMF. “If the IMF abandons the Keynesian approach and starts focusing on structural problems, it will be much better.” Derviş said. “It is also important to know what budget deficit should be, but more importantly there would be methods developed related to the structure of the budget.”

September 25, 2011
SOURCE: HURRIYET DAILY NEWS