President of Turkey’s top business association: “Without rule of law, success cannot be permanent”

TÜSİAD (Turkish Industry and Business Association) President Orhan Turan, in his speech evaluating Turkey’s economic situation and the fight against inflation, stated that inflation would further decrease with the continuation of the Central Bank’s tight monetary policies.

However, he emphasized that such success could not be achieved solely through monetary policy and should be supported by fiscal policy. He also noted that public expenditures should contribute to combating inflation and that a stronger fight against the informal economy was necessary.

Macroeconomic Stability and Global Competition

Turan highlighted that Turkey had made significant progress in the past 1.5 years as a result of the economic policies implemented, pointing out the decline in the country’s risk premium, the rapid increase in Central Bank reserves, and the reduction in the current account deficit. However, he stressed that achieving macroeconomic stability alone was not sufficient, and Turkey needed to be prepared for the increasingly challenging global competition. He emphasized the need to transform Turkey’s economic structure in a way that targeted productivity growth, similar to models in the EU, China, and South Korea.

High Technology and Increasing Exports

Turan stated that to enhance Turkey’s competitive strength, the production structure should be transformed toward high technology and green economy. He pointed out that 55.5% of Turkey’s manufacturing industry was based on low-tech products, and the share of high-tech products in production and exports was extremely low. He stressed that increasing high-tech production and exports would improve Turkey’s competitiveness and growth performance. He also noted that the education system played a critical role in achieving these goals.

Education and Skilled Workforce

Turan emphasized that competition today was not based on low labor costs or cheap currency, but on innovation, knowledge, and skills. He highlighted the importance of skilled labor and pointed out that Turkey was not leading in the competition for human resources. He called for an increase in resources allocated to education, noting that the share of the Ministry of National Education (MEB) budget from the central government budget had been continuously decreasing and should be increased again. He believes that investment in education will strengthen Turkey’s position in global competition.

Emphasis on Law and Democracy

Turan also emphasized that for Turkey’s economic success to be sustainable, the most important areas to focus on were the rule of law, the judiciary system, and the strengthening of democracy. He stressed the need for legal predictability, adherence to the principles of a market economy, and strengthening institutional capacity. He warned that without serious attention to these areas, it would be impossible to sustain short-term achievements in the long term.

In conclusion, Turan highlighted that to improve Turkey’s competitiveness, it is necessary to strengthen both the economic structure and the education and legal systems.