Minister Nabati: We will reach the next level with the New Economy Model

Minister Nebati stated that we will reach the next level with the New Economy Model; “We are continuing the policies to protect the citizens against inflation. It is obvious that our new economic policy aims to permanently solve all the structural problems of the Turkish economy. If we had not put the new economic model into practice, we would have faced many problems,” he said.

Nureddin Nebati, Minister of Treasury and Finance, opened the Economic Transformation and New Paradigms Summit, attended by important economists and economists around the world.

While explaining the Turkish Economy Model, Minister Nebati said, “The main purpose of this approach is to ensure that we enter a sustainable growth policy, to eliminate cyclical problems, to overcome the middle income trap in the long run. We will reach the upper balance in a short time. The most important pillar of the model is to increase confidence in the TL. “It is clear that fiscal policy alone will not be sufficient for the success of the model,” he said.

Nebati said, “We are establishing the Presidency of the Treasury and Finance Academy, which will perpetuate the dynamic of reform and change within our Ministry. On the one hand, we will provide information and experience sharing by carrying out projects with public institutions, universities and NGOs while producing information.”

“ORTHODOX POLICIES CAN CAUSE GREAT CRISES”

Minister Nabati’s statements are as follows:

Turkey is achieving and achieving something. I believe that the economic policies and experiences that will be discussed in detail here today will benefit international economic discussions.

Everyone here will agree with the view that the prescriptions and scopes of economic and social policies are affected. When both national and economic history are examined, it is seen that there is a tight correlation between periodic economic developments.

The new economic sets of this change are effective in the dominance of different economic thoughts in different periods, causing the conditions of social transformations to change. The driving force that moves society forward is actually such a cycle. As it is known, the dynamic process is progressing much faster than in previous periods with technological progress.

Each country has unique aspects that are very interconnected, such as its culture, institutional infrastructure, geographical location. In 1929, with the devastating effect of the Great Depression, while the lezeferciler, that is, “Let them do it, let them pass”, were abandoned with great speed, the economic movement in the world was rising in a grand manner. The world economic order established in this period gave the western economies a golden age with Keynesian policies on the one hand and Fordist production on the other.

The orthodox economic policies presented to developing countries as the only recipe for development resulted in current account deficits and crises in many developing countries. There were major problems in international payments. Reaching the limit of Keynesian policies, oil crisis and supply shocks, the economic crisis of the dominant order was tried to be overcome with new liberal policies. First Teacher in England and then Reagen in the USA emphasized the necessity of giving weight to free market mechanisms in international economic policies.

“TURKEY RANGES AS AN ALTERNATIVE SUPPLY CENTER”

Both state intervention and state control in macroeconomic policies have been reduced. The consolidation of globalization in the 90s, the unprecedented increase in international trade and capital flows, while providing opportunities for developing countries, also brought them face to face with new crisis risks. Many developing countries experienced one crisis after another in the 90s.

As a technology revolution, the spread of the internet in the late 90’s triggered the globalization to enter a new phase.

It was interrupted by the global financial crisis in 2008. Neo-liberal capitalist system 2008 crisis turned into a debt crisis in EU countries, lasting longer and paving the way for paradigms.

Protectionist actions that contradict the neo-liberal doctrine based on globalization, for example, became more prominent in the US during the Trump era.

While the US and China tensions are on the agenda of the world economy, the coronavirus that started has emerged as a historical turning point that opened the door to radical changes. The emergence of the coronavirus in China has caused major problems in global supply and logistics. Western economies have faced problems caused by being dependent on a single center in terms of supply.

During the pandemic process, efforts to reduce the damage caused by the virus have started with expansionary monetary policies, especially in developed countries. It has become inevitable to find alternative supply centers for Western countries. It can be said that we have entered a period that will cause various shifts in the world production and trade map.

“WE WILL REACH THE UPPER BALANCE SHORTLY”

The opportunities created by the current crisis on our country outweigh the threats. As the economy management, we sought answers to the following questions while determining our policy in this process. How do we protect ourselves from the turmoil in the global economy? How can we ensure that it continues on the path of strong growth? How do we overcome the loss of welfare of citizens? What should be the best policy set?

As a conventional economic view, we have adopted a new economic approach in order to find solutions to our structural problems, not in the current global crisis environment, with a heterodox perspective, but to make our country a global supply center after the pandemic. It was created to further our country’s development and welfare. The main purpose of this approach is to enter into a sustainable growth policy, to eliminate cyclical problems, and to overcome the middle income trap in the long run. We will reach the upper balance in a short time. The most important pillar of the model is to increase confidence in TL. It is clear that fiscal policy alone will not be sufficient for the success of the model.

“TURKEY IS ONE OF THE BEST PERFORMING COUNTRIES IN THE G20 COUNTRIES”

It has started to attract the attention of academic circles in particular. We all witness that our model, designed according to the realities of our country, gives the positive results we expect in terms of investment, production, employment and exports. In 2020, the Turkish economy managed to grow by 1.8 percent. We are witnessing that countries trying to solve supply-induced inflation with orthodox monetary policies have entered a recession and are worried. The Turkish economy continued to maintain its high growth performance. Having achieved a growth of 7.5 percent in the first quarter of this year and 7.6 percent in the second quarter of this year, Turkey is one of the best performing countries among the G20 countries.

In the January-August period of this year, exports continue to increase by 18.3 percent despite the current conjuncture.

At the point of increasing employment, 2.1 million people in 2021 have increased employment by 613 thousand people in the first 7 months of this year. Among OECD countries, our country has been the country that has increased its employment the most. We managed to have a current account surplus excluding energy. The dramatic increases in commodity prices, especially in energy, in the Russia-Ukraine war caused some deterioration in our current account balance. We believe that this is temporary and that the improvement on this side will continue as energy prices fall.

Inflation is a global problem in our economy, where we have made good progress in terms of investment, employment, production and exports. Other increases in energy and other commodities, increases in logistics costs, increase in food prices and external factors originating from the pandemic are also the main causes of inflation in Turkey. The increase in the exchange rate and inertia also had an impact on inflation.

We maintain policies to protect citizens against inflation. It is obvious that our new economic policy aims to permanently solve all the structural problems of the Turkish economy. If we had not implemented the new economy model, we would have faced many problems.

The inflation problem experienced by the whole world is largely due to supply and cost. The impact of demand is limited. Our experience is in this direction. As I stated at the beginning of my speech, the structure and dynamics of each country are different. Therefore, it is quite natural that the solution recipes of the problems are different. We see that people’s economy, entrepreneurial state understanding and many approaches are examples of heterodox economic approaches, which are extremely popular. We know that there is a wide heterodox economic literature in the world, especially in the USA, England and Germany.

Orthodox prescriptions are insufficient for the needs of our country. I would like to state that while the free conditions of our country are in question, there is a need for a heterodox policy, I am surprised by various circles that our economy model is ruthless and almost ideologically obsessed.

Turkey does not have to act with the understanding imposed by someone. The underlying reality of the claims made is very clear. We are holding this meeting for him, together with the most valuable names in the world, who will base the claims made.

By emphasizing domestic production with the Turkish economy model, we aim to overcome the middle income trap by increasing our exports with the selective credit project. We will overcome. This is one of our priorities. We will be an example, God willing, I hope.

Our determination to take this strategic step for our country is in line with the specific needs of our country and our people.

The Turkish Economy Model is a model that meets the needs.

ACADEMY OF TREASURY AND FINANCE IS ESTABLISHED

We continue our efforts to make it easier for SMEs to access credit. As respected names here, you will discuss these issues throughout the day and analyze the changes in the economic paradigm in the post-pandemic period.

We will continue to say brand new things with valuable minds from Istanbul. Developed countries also need to hear new discourse and new things. We will reveal the hidden thoughts together and we will succeed. We set out to succeed and our steps will result in success.

It is clear that the most valuable investment is human, knowledge and future-oriented investment.

We are establishing the Presidency of the Treasury and Finance Academy, which will perpetuate the dynamic of reform and change within our Ministry. On the one hand, while producing information, on the other hand, we will enable the sharing of knowledge and experience by carrying out projects with public institutions, universities and NGOs.


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