A decision to discard the constitutional amendments may lead to a closure case against the ruling Justice and Development Party (AK Party) on the grounds that it had attempted to “change the Constitution’s unchangeable articles.” It is not hard to estimate that the ensuing chaotic environment will be to the advantage of the clandestine Ergenekon criminal organization, which has been severely wounded by an ongoing investigation against it. Terror will run wild in the next step, and city squares will be occupied by angry demonstrators all across the country.
Tens of huge investments, which I will mention briefly in this article, will fizzle out, and numerous domestic businesses taking a part in these investments will have to shut down. Turkey’s recent history, which is notorious for crisis and instability, will once again rise from its grave and haunt the entire country. With a resurgent crisis, investments will dry up in this country for decades. God forbid, 2023, the 100th anniversary of the foundation of the Turkish Republic, may be registered in history as a time of crushing defeat instead of victory, contrary to what is touted by many optimists today.
It is quite obvious that in a chaotic environment the current account deficit cannot be closed and unemployment cannot be prevented. Turkey, detached from the world and deprived of the people’s will, will be carried towards the brink of a fierce civil war.
Turkey at the brink of a new world
Turkey entered the global crisis lacking some fundamental reforms and at a time when its politics was bound hand and foot. The ultranationalist factions in the country were expecting the government to fall along the wayside since it was “hard hit by the crisis and already crippled politically.” However, as it did to Israel on the Gaza assault, the government threw up another “one minute” to the International Monetary Fund (IMF), with which Turkey was forced to deal by junta-buttressed ultranationalist groups.
Turkey has come out of the crisis successfully with its head held high. Its banking sector was strong and its public sector remained upright despite the concussions of the crisis, and it became an actor with a chance of becoming the protagonist of a new world. All observers, local and international, have been describing Turkey as the “rising star of the new period.”
Turkey’s two major problems in the economy are the current account deficit, which appears as the trade deficit, and high unemployment. Indeed, we started 2010 with high growth, but exports rose only 15.6 percent, to $45.5 billion, in the first five months, whereas imports soared 36.6 percent to $68.13 billion. In the same period, the trade deficit increased by 115.5 percent, to $22.6 billion from $10.5 billion.
According to the figures provided by the Turkish Statistics Institute (TurkStat), the share of intermediary goods in imports was 72.5 percent, while capital goods accounted for 14.1 percent of Turkey’s total purchases from abroad. Consumption goods, on the other hand, represented a 13.1 percent share. In Turkey’s deficits, three actors and three factors are emerging. The actors are Russia, China and the US. The factors, on the other hand, are energy, iron and steel, and technology. For example, of the $38.7 billion foreign trade deficit in 2009, $12.4 billion (32 percent) stemmed from high-tech products, while a large part of the rest was made up of imports of energy and iron and steel products.
Turkey needs to succeed in import substitution in these sectors, at least partially, to close its deficits, keep wealth inside the country and prevent unemployment. How? Not by swaggering, but by wit and strategy.
Turkey has readied an industry inventory, although it is not completely finished. Using this inventory, it is able to issue a comprehensive, wise and rational incentive law. A set of major projects and sectors were determined to save the country.
Subsidies were announced for 12 sectors including chemicals, refined oil products, transportation of energy resources through transit pipelines, automotive, railway vehicles, electronic industry investments, medical equipment, medicine, aerospace and space vehicles, machinery, mining and port operations.
In 2008, Turkey passed a law on research and development for the first time in its history. Another move for the modernization of its economy was the implementation of a “foreign trade transformation and expansion strategy.” Turkey became a rising star in the Afro-Eurasia region thanks to a great synergy between the state and its people, fueled by unprecedented support from civil society institutions such as the Turkish Exporters’ Assembly (TİM), the Turkish Confederation of Industrialists and Businessmen (TUSKON) and the Independent Association of Industrialists and Businessmen (MÜSİAD). Turkey is now poised to reveal a National Employment Strategy for the first time in its history.
Therefore, the country has been experiencing the exciting possibility of being one of the top 10 largest economies of the world by 2023, with a gross domestic product (GDP) over $1.5 trillion, exports in the ballpark of $500 billion and a per capita GDP of $20,000. This is now a Turkey which inspires trust, peace, confidence and value in its region and in the entire world. But perils are still around the corner that could obfuscate these high prospects. I will continue discussing this in my column tomorrow.
