GOVERNMENT COMPLICATES IMPORTS WITH ADDITIONAL TARIFFS

THE FUTURE of imports is about to be transformed, according to Treasury Minister Berat Albayrak. Looking beyond the coronavirus pandemic, and the lessons learned from it, Turkey will prioritize domestic production and improve the competitiveness of Turkish products around. Imports will, consequently, face more hurdles, except strategic products that are not manufactured in Turkey.

“Does access to funding, bank loans, and ratios focus on domestic production?” Albayrak inquired, adding that this new concept will be much more efficient. Domestic production will be more important in the future and Turkey will see a new, stable period in the economy, Albayrak promised, if producers utilize their production capacities correctly.

The Union of Chambers and Commodity Exchanges of Turkey (TOBB) held its annual TOBB Economy Meetings online this year due to the measures against the coronavirus outbreak. In addition to Albayrak, a total of 365 heads of chambers and 61 exchange presidents participated in the meeting. Speaking at the meeting, Albayrak said the ministry is working tirelessly to prepare for the period after the outbreak.

INCENTIVES SURPASSED TRY 600 BILLION

Albayrak said government incentives will accelerate the return to normalcy, adding that as of last week, the total of incentives surpassed TRY 252 billion. Adding in postponed credit and principal interest payments, the total jumps to over TRY 350 billion. With the multiplier effect, the total amount of incentives surpasses TRY 600 billion. “This package will support the recovery of the economy in the future,” he said.

ADAPTABILITY IS STRENGTH

Employment is the most important factor in the transition to normalization, according to Albayrak. He said the ministry has prepared the necessary infrastructure for job security to support employees during this process. The ministry will also increase incentives for additional employment to fight unemployment. During this period, the Treasury has provided all the necessary liquidity support for craftsmen, industrialists, and SMEs.

These efforts will be accelerated and the economy will swiftly adapt to the new normal, Albayrak said. Reviewing the global supply chain and creating alternatives for production will only happen if health infrastructure is prioritized, from investment to tourism. “During this period, Turkey will rise with its strong production infrastructure, young and qualified labor force, businesses that adapt quickly to global changes and advanced industry,” Albayrak said.

MAKING TURKEY MORE COMPETITIVE

Albayrak underlined that as a result of the outbreak, imports will face additional hurdles, except necessary inputs for producers, exporters, real investors, and industrialists. Within this context, the Treasury will prioritize domestic production and its strength to compete with the rest of the world. As a result of the outbreak, digitalization has become important, too. To take advantage of the new order, businesses should step up to complete their digital transformations, according to Albayrak.

ECONOMIC RE̞BALANCING A SUCCESS

The Central Bank has reduced the policy rate to 8.75 percent, down from 24 percent, and there has been a significant decrease in inflation. Albayrak said the balancing period has been a huge success so far. “If we had begun this period with high interest rates when the demand for liquidity surged and trade slowed, you know what our producers and industrialists would be facing now,” the minister said, arguing that investors have faced an environment in which TRY funding is not advantageous. According to Albayrak’s meetings with banks, now the trend may be shifting to TRY from foreign exchange because the interest on TRY is much lower. Albayrak believes reduced demand for foreign exchange will be more visible in line with the global outlook. “If we can provide incentives of TRY 252 billion to our citizens and business world, if we can fight the pandemic with an amount that equals five percent of our national income, it is because of the success of this balancing period,” Albayrak said.

NEED FOR POLITICAL UNITY

Turkey is facing a future in which the current account deficit will disappear and the markets will not need funding support, Albayrak argued. The real sector has picked up in April and May and the consumer confidence index has begun to move in a more positive direction with an increase of 8.5 percent. The minister said the hardest part of the fight against the pandemic is now over and that the biggest impacts of the outbreak have been reflected in the economy. June and July will be more optimistic, said Albayrak. “During this period, it is clear that unnecessary political feuds do not benefit anyone.”

Government will prioritize domestic production and improve the competitiveness of Turkish products. Imports will, consequently, face more hurdles,