Economist praises Turkey for IMF stance
Güncelleme Tarihi:
Hürriyet Daily News
Oluşturulma Tarihi: Mayıs 30, 2009 00:00
ISTANBUL - Prof. Steve Hanke, an expert on the global economy and monetary policy, praises the Turkish government for holding out on striking a deal with the International Monetary Fund. Hanke says if the crisis ends as early as hoped, Turkey will emerge much stronger thanks to this policy
Turkey’s relations with the International Monetary Fund amid the global crisis continued to be the main topic on Friday, the second day of Forum Istanbul 2009.
Supporting the government’s current stance, Steve Hanke, a professor of economics at Johns Hopkins University, said Prime Minister Recep Tayyip Erdoğan is "doing the right thing" in both the political and economic sense.
"If he [does the contrary] and signs an accord with the IMF, the image of the government would be weakened," Hanke said. "But, meanwhile, Turkey should continue with fiscal reforms. It should reform its labor market and tax system."If the crisis subsides as soon as hopes, Erdoğan will have the upper hand as a leader who has not signed an IMF accord and would gain further confidence from the public, Hanke said. "He is doing the right thing by waiting."
Noting that the global crisis is the result of "massive government failure," Hanke dubbed the system in the United States "cowboy capitalism."
"We are faced with a regulatory failure in our system," he said. "Now what we need is more regulation."
The big winner
One of the big winners in the global crisis is the IMF, which has received massive support from governments, Hanke said. "The geopolitical and economic winner is China," he said. "It is targeting 8 percent growth [this year] and I am sure they will reach their aim."Mehmet Büyükekşi, president of the Turkish Export Assembly, or TİM, argued that Turkey has managed the crisis well. "In order to overcome this crisis, the government should pursue a policy that enhances credit flow and revives consumption," he said. "As exporters, we aim to move forward with two strategies: The first is to penetrate untouched markets, while the second is to increase our share in existing markets."
Noting that Turkey’s exports totaled $132 billion last year, Zafer Çağlayan, the state minister responsible for foreign trade, said the target is $500 billion by the year 2023. Another key issue discussed Friday was Turkey’s relationship with the European Union. Ahmet Dördüncü, the chief executive of Sabancı Holding, said the EU needs Turkey as much as Turkey needs the EU. "The biggest danger to the global economy today is protectionism," he said. "Saying that we will handle our business ourselves would be a big mistake. Membership in the EU includes synergies, and, fundamentally, integration should happen. The EU is still an important target for Turkey."
State Minister Egemen Bağış, Turkey’s chief negotiator with the EU, said Turkey’s path toward membership continues, but that there are still "barriers and obstacles."
"When we think about Turkey’s contributions to the EU, we see that the relation between the EU and Turkey is a win-win formula," he said. "No other country has ever seen such obstacles and barriers as Turkey has in its EU membership process." Still, cooperation between European and Turkish firms is improving. Turkey is a formidable force in its region and is crucial for the EU, Bağış said.
Supporting the government’s current stance, Steve Hanke, a professor of economics at Johns Hopkins University, said Prime Minister Recep Tayyip Erdoğan is "doing the right thing" in both the political and economic sense.
"If he [does the contrary] and signs an accord with the IMF, the image of the government would be weakened," Hanke said. "But, meanwhile, Turkey should continue with fiscal reforms. It should reform its labor market and tax system."If the crisis subsides as soon as hopes, Erdoğan will have the upper hand as a leader who has not signed an IMF accord and would gain further confidence from the public, Hanke said. "He is doing the right thing by waiting."
Noting that the global crisis is the result of "massive government failure," Hanke dubbed the system in the United States "cowboy capitalism."
"We are faced with a regulatory failure in our system," he said. "Now what we need is more regulation."
The big winner
One of the big winners in the global crisis is the IMF, which has received massive support from governments, Hanke said. "The geopolitical and economic winner is China," he said. "It is targeting 8 percent growth [this year] and I am sure they will reach their aim."Mehmet Büyükekşi, president of the Turkish Export Assembly, or TİM, argued that Turkey has managed the crisis well. "In order to overcome this crisis, the government should pursue a policy that enhances credit flow and revives consumption," he said. "As exporters, we aim to move forward with two strategies: The first is to penetrate untouched markets, while the second is to increase our share in existing markets."
Noting that Turkey’s exports totaled $132 billion last year, Zafer Çağlayan, the state minister responsible for foreign trade, said the target is $500 billion by the year 2023. Another key issue discussed Friday was Turkey’s relationship with the European Union. Ahmet Dördüncü, the chief executive of Sabancı Holding, said the EU needs Turkey as much as Turkey needs the EU. "The biggest danger to the global economy today is protectionism," he said. "Saying that we will handle our business ourselves would be a big mistake. Membership in the EU includes synergies, and, fundamentally, integration should happen. The EU is still an important target for Turkey."
State Minister Egemen Bağış, Turkey’s chief negotiator with the EU, said Turkey’s path toward membership continues, but that there are still "barriers and obstacles."
"When we think about Turkey’s contributions to the EU, we see that the relation between the EU and Turkey is a win-win formula," he said. "No other country has ever seen such obstacles and barriers as Turkey has in its EU membership process." Still, cooperation between European and Turkish firms is improving. Turkey is a formidable force in its region and is crucial for the EU, Bağış said.