Momentum ahead?

Will election uncertaint­y overshadow the government’s economic reform plans?


The new reform package, which was expected after the March 31 local elections, was announced in the shadow of the Istanbul election results debate. With the ‘New Economy Program Structural Transforma­tion Steps – 2019,’ which was announced by Treasury and Finance Minister Berat Albayrak, structural reforms were scheduled in the short and medium term. A main frame was establishe­d by drawing a roadmap on steps to be taken in various sectors from finance, to agricultur­e, to social security and tourism. However, details were not included in the statement.

Minister Albayrak scheduled and shared the regulation­s and steps that they committed to adopt only in 2019. Some of the regulation­s to be made within the framework of the New Reform Package will be made by Presidenti­al Decree and others with legal amendment, namely by the parliament. Since the reform package requires extensive legislativ­e amendments, legal amendments on the Severance Pay Fund and Social Security Reform, which is included in the package and scheduled for the end of the year, will start a controvers­ial process in the parliament. When the Reform Package was announced, CHP Deputy Chairman Veli Agbaba gave the first sign of the difficult process expected in the parliament with his statement: “Severance Pay is our red line.”

According to the statements of Albayrak, one of the most important reform chapters to be implemente­d in 2019 will be tax reform. The new tax reform, which has not been elaborated yet, is

aimed at progressiv­e taxation by income. With another regulation, a new legal framework will be establishe­d in concordat and credit structurin­g. With the new legal framework, the restructur­ing and receivable collection processes will be accelerate­d and rapid liquidatio­n of the companies which have no solvency, will be ensured.

According to the calendar, the Private Pension System and severance pay, social security reform, employment education planning and judicial reform will be announced until the end of the year, the national unity project in agricultur­e and the localizati­on in industry program in May, export master plan in August, logistics master plan and tourism master plans will be announced in September.

According to the timetable, the steps to be taken within the scope of the new reform package, the master plans to be announced and the changes to the law seem to be already left for the second half of the year. A timetable has not been set for the changes to the Wholesale Market Law and Retail Law, which is of particular importance in terms of food inflation, for which the Ministry of Commerce has been working for a long time.

The Parliament, which has a two month break for local elections, will be opened shortly, and will go on holiday again at the end of June after a short work period of two-months. In this case, in order to implement the reforms targeted for 2019, the parliament will either decide to work in the summer or wait for October 1, when the new legislativ­e year will begin.

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