Turkish Economy Stuns Critics, Grows Without Help From IMF

Article Summary
Critics of the ruling Justice and Development Party’s policy of managing the Turkish economy without the IMF were proven wrong as Turkey experienced relatively high economic growth in 2011, argues Suleyman Yasar. However, despite a fall in unemployment and an increase in exports, Turkey still faces unfavorable foreign trade terms.

Those who warned that Turkey could not manage its economy without the International Monetary Fund were wrong. Those who said that Turkey would not be able to find external sources, and might even sink, will now have to find other issues to grumble about. The attempts to damage the image of the economic performance of the ruling Justice and Development Party were unsuccessful. Despite this tampering, the consumer confidence index — at 68.88 in November 2008 — had actually risen to to 96.4 by November 2011. All the expectations of the “interest lobby” turned out to be untrue. The economy registered record-breaking growth of 9.2% in 2010 and 8.5% in 2011.

In 2011, Turkey also had the highest rate of job creation among the G-20, and unemployment went down to 9.8%. When compared to the 10.8% unemployment in European Monetary Union countries, we can rightly claim stellar performance by Turkey.

Foreign-trade statistics for the first quarter of 2012 show that exports are meeting imports. In the last quarter of 2011, exports went up 6.7% while imports were reduced by 5.1%. This change shows that our Central Bank is following a parity policy that supports exports. 

Then what is the problem with the Turkish economy now? It is our unfavorable foreign-trade terms, which reflect the ratio of the prices of our export commodities to our import commodities. Due to the sharp price increases of imported raw energy material, current foreign-trade terms are not in Turkey’s favor. Meanwhile, the prices of our export commodities are not increasing. The solution to this imbalance is once again the parity policy. Foreign dependence can be partially curtailed by disallowing the excessive valuation of the Turkish currency, seeking import substitutions and trying to use domestic energy sources more efficiently.

2011’s high growth rate has proven that Turkey, as long as it maintains its financial discipline, does not require admission to the IMF hospital. Once again, there is no good news for the special interest lobby.

Found in: turkish trade, turkish economic growth, turkey, international monetary fund, g-20, freedom and justice party, european union

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