Following municipal elections on Sunday, Turkey should focus on economic, social, and political reforms and prioritise strengthening the rule of law and the democracy, the head of the country’s leading business and industrialists’ association said on Friday.
Turkey’s ruling Justice and Development Party (AKP) suffered defeats in local polls on Sunday in five of the country’s six most populous municipalities, including Istanbul and Ankara. The local elections were held at a time Turkey is experiencing an economic recession, a weak lira and inflation of just below 20 percent.
The government postponed plans for comprehensive economic reforms as the country was headed to the local polls and chose short-term policies such as selling fruit and vegetables direct to the public below market rates to curb food prices and putting pressure on banks to provide loans.
“We have left behind another election period. In the last four years, Turkey had to deal with an intensive political agenda. During that time we always tried to create short-term solutions to our economic difficulties. Now we can focus on the longer run and discuss our country’s future and how we can increase our economy’s competitiveness,” Simone Kaslowski, the president of Turkish Industry and Business Association (TÜSİAD) told a meeting in Istanbul.
Kaslowski said the price of short-term solutions was financial instability and inflation should fall into single-digits as soon as possible to ensure financial stability.
“High inflation does not only lead to price increases and income inequalities, but also the dollarization of the economy,” he said.
Kaslowski said Turkish companies had supported government efforts to curb inflation by decreasing their prices and called on the authorities to now concentrate on sustainable solutions.
The rule of law is a precondition for a credible economy, said Kaslowski.
“In a system that does not guarantee basic rights and freedoms, it is impossible to talk about investments, employment, entrepreneurship, and innovation. Given the global balance, only a Turkey that has the rule of law and a society of freedoms can have competitiveness, can draw investments, and can grow in a stable way,” he said.
Turkey should strengthen its institutions, deepen capital markets and expand insurance sector, increase financial inclusiveness, struggle with the informal economy, and improve transparency in the public sector for financial stability, he said.
Turkey needed reforms in education, tax collection, employment, agriculture, manufacturing, and digital transformation as well as ensuring sustainability in energy and strengthened rules for competition in order to boost productivity, Kaslowski said.
He said Turkey needed to stabilise its relations with the West and the European Union on the basis of common interests and values. “Turkey’s access to EU markets and strong relations with the West are still the most important factors that determine its relations with other regions,” he said.