Ankara’s New Economic Course: The Economics of Production

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Recently, the economy has been at the top of Turkey’s political agenda. Despite the achievements of the ruling Justice and Development Party (AKP) in solving Turkey’s infrastructure problems, the government has been particularly criticized due to the exchange rate hike. This persistent problem of Turkey’s finances can only be solved by strengthening the country’s productive economy. It is true that when foreign investment was booming in Turkey in 2015, the AKP party government could have focused more on production than public investment. By devising a long-term plan, the government could have shifted Turkey from an investment economy to a production economy.

Nevertheless, it is not too late to reverse the trend of the Turkish economy, which is built on solid foundations. Turkey’s production capacity has grown considerably since the 1960s. Following President Turgut Özal’s fire, AKP party governments have not only completed huge infrastructure projects, but have also transformed Turkey into a regional economic center which attracts private investment at the international level. At present, Turkey is one of the main economies in its region with significant production capacity.

Pandemic financing

During the coronavirus pandemic, as major European countries suffered from economic stagnation and depression, the Turkish economy proved its resilience through its productive capacity. Along with South Korea, Japan and Germany, Turkey has successfully weathered the most difficult times of the pandemic. However, as the pandemic is still far from over, it is crucial to make practical suggestions to help the government overcome the current financial problems.

As is known, the AKP party governments have to a large extent solved the huge housing problem in Turkey by building hundreds of thousands of houses through the Housing Development Administration of Turkey (TOKI). As the Turkish industrial sector is in urgent need of land and factories in various industrial zones, a similar public institution could be founded to build and lease factories to businessmen. Just as the needs of the Turkish military have been met by the national defense sector, all other public institutions should meet their needs, from medical instruments and devices to research and development through domestic private companies. By relying on its own resources, Turkey will not only strengthen its independence, but all related sectors will also be strengthened, providing jobs and income for businessmen and workers. This strategy must be implemented not only as a government act but as an economic mobilization at the national level.

After completing huge projects in Turkey, major construction companies are expected to start focusing their energy in the international construction and industry sector. The government should guide these companies to invest in North Africa, the Middle East and even the United States. Such expansion of Turkey’s private construction sector to the international market will also ease their pressure on politics.

Turkish businessmen should develop new business models in our region of influence in order to utilize Turkey’s production capacity in international markets, such as the growing North African market. As Chinese products become more expensive than before, Turkish industry could meet the needs of our region, increasing its export capacity to countries in Europe and the Middle East.

Turkey’s problems in the financial sector could only be solved by strengthening its well-established industrial sector. I believe that the AKP party government’s new economic route should transform the Turkish economy into a production economy.

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