Now what do we need to do for the Turkish lira?
The Turkish lira has almost devaluated by 80 percent against the American dollar in 10 years. Now what needs to be done for the Turkish lira? At first glance, that was the question in my mind. But that’s not really the right question. The right question is: “Now what needs to be done for the Turkish economy?” The meltdown of the Turkish lira is indicative of the weakness of Turkey’s economy. If the Turkish economy was strong enough, our money would not have lost that much value. I thought of five basic points, which need to be addressed in order to design a robust strategy.
First of all, macro and financial stability need to be restored. Steps that create new doubts about the independence of the Central Bank should be carefully avoided. The Bank should not give the impression that it has returned to its old complexities after it has swallowed the simplification pill on monetary policy. What happened this week should be a lesson for us. Furthermore, Turkey should announce that from now on it will adopt a regulated fiscal policy and thus a dynamic upper limit should be applied on public spending.
Secondly, we need to focus on steps to strengthen a rule-based environment to improve the investment climate. The removal of the state of emergency is a very positive first step. However, the skepticism that we have created for ourselves in relation to the functioning of the judicial system is now a hurdle for the investment environment. It is clear that giving the impression that we are doing foreign policy negotiations over judicial matters has turned out badly.
Thirdly, Turkey needs a strong structural adjustment program that will improve its medium-term growth capacity. Turkey has to head towards educational reform in order to fortify the bond between growth and employment that has been weakened by digitalization. Human capital’s ability to adapt to technological revolutions should be increased. It is also time to liberalize the services sector and agriculture.
Fourthly, public administration reforms that will work harmoniously in the presidential system are extremely important. The new term in this framework should be viewed as an opportunity. The distribution of authority between the central and the local government should be re-addressed. Growth and employment should be adopted at the local level as well. The main issue for a country like Turkey, where the youth population is high, must be youth unemployment, particulalry rising unemployment among young women. Local economies should have a local owners.
Fifth, today those who have to defend Turkey abroad are forced into a defensive position over specific issues. You cannot promote a nation while continuously in a defensive position. Turkey needs positive wording. Both the global and regional role of our country, as well as its functioning democracy, must be the most important parts of its narrative. A country’s publicity strategy cannot be designed by foreign lobbying companies. It has to be native and national.