The tight fiscal policy has been implemented with success, inflation and interest rates have been brought down substantially. Turkey has once again entered a period of growth.
Today, Turkey is not what it was two years ago. It no longer has a Treasury that is struggling to settle debts, or industrialists who can't see the future, or constantly jittery markets. There is time and opportunity to think more reasonably and take steps into the future. So, without wasting time, it is necessary to take long-term measures and implement the necessary projects. In fact, many important amendments have been made so far; but they are not enough. Much more is needed. As a result of some indicators announced recently, it is imperative for us to take effective measures. It is for sure that if the reforms are not completed, the troubles experienced in the past might occur once again.
The growth figures announced last week turned out far beyond expectations. This was interpreted as a satisfactory record by some and as a danger signal by others. The rate in the second quarter of the year was presented as 14.4 percent and 13.5 percent in the first half of the year. These are satisfactory figures in deed.
When we only examine the data regarding growth, the situation seems rather well. There seems to be no problems if we consider the high increase in industrial production; however, we see that it is necessary to be careful when we consider the demand structure, the increase in the current account deficit, the widening foreign trade deficit and the continuously overvalued Turkish lira. As a result, there is a concern as to whether "we are growing with the current account deficit."
Why is there a concern? It is because there is such a judgment in the minds, whose roots extend to the past: "Whenever we enter a period of fast growth, the current account deficit widens, and it becomes a problem to narrow it." In fact, the problems experienced before surfaced as a result of the current account deficit. Since there haven't been many infrastructural changes, we cannot overlook today's concerns.
Actually, the problem is structural. It is not an incidental case characteristic of the present day. Hence, as long as the structural amendments are not completed, such fears will continue and will always remain on the agenda. After a few years of robust growth, it is always possible for small shrinkages to occur. Fragility increases, and it becomes a new dawn for the crisis-mongers. Even small political issues could destroy all the balances.
Then, should we grow under these circumstances? Of course we should, but in a healthy and permanent way, without leaving any question marks behind. It is out of the question to give up on growth. Hence, we should look for ways to decrease the current account deficit without suddenly slowing growth. To realize this, it is of paramount importance to improve the investment environment and attract foreign capital directly. Instead of saving the situation with "hot money," the necessary amendments on foreign direct investments and capital flows could be made urgently. "Hot money" has never done anyone.good. Until the present day, it has never been any good for us and will never be.
What should be done in the long run is to give basic education. Today, we are one of the countries that claims to develop rapidly; however, we are also one of the countries that invests the least in education. As a matter of fact, we come across this problem - from not being able to privatize, collect taxes - to lagging behind in technology and the lack of productivity.
Our human capital is weak. Since we cannot solve this by importation, we have to strengthen ourselves. A qualified staff is indispensable to permanent growth and development.
There is a similar sentence in the conclusion of the report prepared by the International Monetary Fund (IMF), entitled, "Human Capital and Economic Development." How can a healthy growth be realized with a human capital that is behind world standards and not well-trained?
So, solid ground and infrastructure are necessary. All aspects of the structural reforms should be strong and all the human aspects should be solid. Otherwise, we will continue to discuss the same issues over and over again.
