Turkey: A Story of Decoupling

The Global Economy is trembling in the face of the danger of a new crisis. The effectiveness of the monetary and fiscal policies implemented after the 2008 crisis had been debated hotly at the time. Although economists who had commented that the measures taken after the crisis would be temporary were labeled as being negative, the point we have reached today proves how right they were.
Unfortunately, the measures implemented were rather insuficient. Neither the USA's nor the EU's economy has grown to desired levels. Signi?cant improvement in employment rates has not occurred either. Expectations are being concentrated in the direction of these two global poles entering long-term stagnation. Likewise, the US Federal Reserve has announced that it will keep interest rates at a low level until mid-2013, signifying the projected duration of this stagnation.
As developed economies wrestle with serious debt problems, insuf?cient ?scal measures, and lack of growth, we note that Turkey is heading toward a positive divergence in this process.
Turkey is not dealing with the problems developed countries are facing and struggling to solve. Turkey has no issue with extreme debt, nor is it worried about speeding up a slowing economy. To the contrary, the Turkish economy entered a rapid process of recovery following the 2008 crisis. Growing 8.9% in 010, Turkey achieved a record growth rate of 11% in the ?rst quarter of 2011. Now, Turkey is trying to cool its economy with healthy steps in order to be affected less by the breeze of the crisis occurring in the rest of the world.
Turkey's exports grew 12% in 2010 to reach 114 billion dollars. The rate of growth in exports over the ?rst seven months of 2011 exceeded 20%. We expect it to exceed 135 billion dollars by the end of the year.
Following the measures taken by the Central Bank, in the case that developments occurring in the currency exchange rates remain permanent, they will re?ect positively on Turkey's exports while also balancing imports, thus providing an opportunity to bring the current account de?cit problem under control.
The most recent results of the exporter tendency survey conducted by the Turkish Exporters Assembly on more than 1,000 companies show that Turkish exporters maintain their positive expectations for the upcoming term. According to the results of the survey, 45% of exporters expect their exports to increase in the third quarter of the year, while 33% predict they will remain the same.
Turkey's positive short-term appearance continues. Together with this, Turkey is moving with a more mid- and long-term perspective in taking steps to accelerate structural transformation in the economy. Turkey is quickly escaping the status of a hot money paradise with the changes the Central Bank made to its policies. Because of this, currency exchange rates are reaching levels that are more competitive.
Competitive currency exchange rates at levels that won't constrict the domestic market will direct industrialists toward exporters, facilitating a reduction in imports and an increase in exports.
Turkey is now supporting exports and production more. Investments to be made to support the production of high value-added, cutting-edge products that will be manufactured in Turkey for the ?rst time ever and investments that will produce critical raw materials will be incentivized specially with the "special investments incentives” arrangement with no discrimination between local and international investments.
Turkey is shifting its industries and exports from low- and medium-technology products to medium- and high-technology sectors.
These sectors are being incentivized actively and are supported via the incentive policies implemented by the government.
With the acceleration of this process, Turkey will shift more toward value-added production and exports, thus coming closer to the goals it set for 2023, which are becoming the world's tenth largest economy and realizing 500 billion dollars' worth of exports.
Other than the economic agenda, in the political agenda we are following the creation process of a new constitution. Turkey, which is a source of inspiration with the democratic culture it possesses, now has before it the goal of creating a new constitution. Having adopted for itself a vision of becoming the world's tenth largest economy and a centrally important country with regard to its goals for 2023, Turkey will reach the goals it has via the new steps it will take in democracy and its brand new, contemporary constitution.
We, as TIM, have always emphasized that one of the most important priorities of Turkey, which is changing and moving step by step toward becoming a global country, is a new constitution. Therefore, we are ready to provide every kind of support and advice required for this new constitutional process.


Mehmet BÜYÜKEKŞİ
CHAIRMAN (TIM)



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