Effect of Economic Situation on Policy

We've all been talking about economics these days. We are discussing where the foreign exchange will reach, how the expensiveness will be resolved, how Turkey will come out of this vortex.

The supporters of the government, as they do in all the problems experienced, attribute the causes to other internal and external forces and claim that the solution is still in the current government. The supporters of the opposition, on the other hand, argue that what has been done for nearly 20 years is obvious, and that both the unsolved problems and the causes of these problems are due to management errors.

Of course, it is easy to comment on the current state of economic dynamics. After all, everyone lives and interprets the economic situation at that moment, but the important thing is to be able to make predictions about the future. 3 years ago, even before the pandemic had affected the world, I made a study about Turkey's economic situation, determined the situation and briefly wrote about the measures to be taken.

Turkey was the 17th largest economy in the world with a Gross National Product (GNP) of 863,390 billion dollars in 2016. In 2017, we were one of the 3 countries (together with the UK and Japan) with a decreasing GNP in the top 20, despite being in the same rank. We wrote that the situation was not good, that the countries after us were about to overtake us and that urgent measures had to be taken.

So what happened? The decline continued. According to 2018 values, Turkey's GNP fell to 649.436 billion dollars. Well, of course, the Netherlands, Saudi Arabia and Switzerland, which continued production at full speed with rational policies and were behind us only two years ago, said hop, they passed us. We dropped to 20th place.

We said that the production economy is a must, the investments to be made should be directed towards income-generating investments, but this did not happen. Limited resources were directed to investments that would not return materially, but rather moral and political support of the society. The majority of the society perceived such economic investments, which were in sight but had limited or no contribution to the economy, as progress and continued to support the government. Another negative factor was the gradual increase in public expenditures with the understanding that reputation cannot be saved. Unfortunately, the process of going backwards in Turkey, whose production decreased, consumption increased, and savings disappeared, unfortunately continued.

According to the forecasts of the International Monetary Fund (IMF) in the World Economic Outlook report published on October 12, 2021, at the end of 2021, Turkey will lose its place in the top 20 for the first time in years, and will fall to the 21st rank first and to the 22nd rank in 2022. Fortunately, in the same report, the forecast for 2023 is stated as 19th.

Turkey, which was the 17th largest economy in 2000, fell to the 20th place in 2002 due to the economic crisis in 2001. It is very interesting that we are experiencing a similar situation again after 20 years. We will see if the post-economic crisis, which resulted in early elections and a change of power 20 years ago, will be experienced in the same way 20 years later. Another interesting situation is the fact that MHP Chairman Devlet Bahçeli, who was in power 20 years ago and led to early elections at that time, is still in a key role after all these years.

As a result, we are faced with the reality of Turkey, which is economically stagnant when compared to the world 20 years later and is likely to fall behind in the future. AKP needs to make good use of the example of ANAP and DSP, which were in power 20 years ago and regressed to a marginal position in Turkish political history as a result of the early elections. It seems inevitable that the future of the AKP will suffer the same fate as the two former partners of the MHP, unless the government can make a big jump in the economy and place Turkey at least 17th, whether it is an early or timely election.