Rejecting reforms on Sept. 12 may harm economy

Speaking to Today's Zaman, experts explained how the result of the Sept. 12 public referendum will affect the country's widely lauded economic performance. There seems to be a consensus that that the rejection of the reforms, though seen as improbable based on the most recent polls, would be followed by pessimism about Turkey's political stability and may have long-term consequences for economic indicators.

“Early general elections may be one of the options on the table in the post-referendum era if a ‘no’ comes out of the ballot box, which may curtail the economy’s predictability. For that reason, we agree that rejection may have an adverse impact on economic stability and development,” said Rızanur Meral, chairman of the Turkish Confederation of Businessmen and Industrialists (TUSKON). However, he also argued that approval of the reforms would pave the way for accelerated improvements in the Turkish economy. “It will result in a more participatory democracy and, as is known, strong economies emerge mostly in strong democracies,” Meral explained, adding that a result in favor of the proposed changes will strengthen Turkey’s hand in reaching its 2023 targets. The Justice and Development Party (AK Party) government is aiming to make Turkey the 10th largest economy in the world by 2023, the centennial of the Turkish Republic.

‘No’ result may paralyze politics’

Former Privatization Administration (ÖİB) Vice President Süleyman Yaşar also emphasized the strong link between democracy and economic development. He told Today’s Zaman that if the referendum concludes in favor of the proposed changes, which will take it in the direction of better democracy and more freedoms, Turkey will bring in more foreign investment because expectations of the country’s prospects will significantly be improved. However, he also cautioned that “no” result may have negative consequences.

“The amendments to be voted on are all democracy-expanding articles. The reform package, for example, will put an end to the judiciary’s interference in making decisions on investments by delivering verdicts in essence as if it was the government or Parliament. Such decisions have cost Turkey huge amounts so far. Investors certainly consider whether they are going to get a green light from the courts at the moment, which makes them less willing to invest in Turkey. This situation will change. But, if the result is a ‘no,’ then we would have a Turkey going backward in the process of democratization. Why would those investors bring their money to Turkey then? Such a result will increase uncertainties and may paralyze politics in this country,” he said.

The experts’ comments confirmed government authorities’ positive predictions for the post-referendum economy.

Speaking in an interview with CNN Türk late on Wednesday, Finance Minister Mehmet Şimşek argued that if the Turkish people say “yes” in the popular vote, the country’s gross domestic product (GDP) per capita will be able to reach higher levels in the future but that economic instability may arise otherwise. “If ‘yes’ is the final result, Turkey will have a ground on which its current $10,000 GDP per capita will rise to $30,000 and even to $60,000 as time elapses. On the other hand, if a ‘no’ comes out, instability may arise in Turkey because we have general elections ahead of us. We have already entered into the politically heated atmosphere of elections,” Şimşek said.

Deputy Prime Minister Ali Babacan voiced the same projections. “Though a small possibility, if ‘no’ is the result, such a decision will magnify existing question marks and Turkey will pay an economic price for that,” he said during a live program on NTV on Wednesday.

Once approved, the proposed reform package will improve democratic representation in the high judiciary through changes to the structure of the Constitutional Court and the Supreme Board of Judges and Prosecutors (HSYK), limiting the jurisdiction of military courts solely to disciplinary affairs, opening the decisions of the Supreme Military Council (YAŞ) to judicial review and paving the way for the trial of the perpetrators of Turkey’s 1980 military coup.