"We Aim for a Domestic and National Economy with Fewer Imported Input"

Regional Economy 15.03.2021, 13:30
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"We Aim for a Domestic and National Economy with Fewer Imported Input"

President Recep Tayyip Erdoğan announced the new and long-awaited economic reform package at the Economic Reforms Introductory Meeting at the Haliç Congress Centre. "We aim for a domestic and national economy which breaks export records with fewer imported input and more value-added production," Erdoğan said.

"We will achieve our goals to make Turkey one of the world's top 10 economies"

Stating that this economic reform package aims to grow the economy on the basis of the investment, production, employment, and export, President Recep Tayyip Erdoğan said, "We will increase our potential growth by boosting production efficiency. We will put this road map into practice together with our nation, our institutions, our business world, and all shareholders, hopefully. Our aim is a domestic and national economy that reduces the use of imported inputs and breaks new records in exports with value-added production. Turkey weathered the 2009 global economic crisis and post-2013 crises in both politics and the economy to keep its 2023 targets within reach. We will achieve our goals by working day and night to make Turkey one of the world's top 10 economies," Erdoğan emphasised.

"We will take some necessary steps with a new and civil constitution"

"We have institutionalised political stability, which is one of the basic requirements of democratic and economic development. Turkey remains strong despite many regional and global crises. One thing is clear; unless vaccines and medicines are open to the use of all countries fairly, the rich people in the world will not find peace as well, or large economies will not be able to stabilise. We believe that a new management system, which will be open for development whenever necessary, will be the guarantee of stability and trust in our country for centuries. We will take some necessary steps with a new and civil constitution," the President said.

We grew by 1.8% in 2020 despite the pandemic

Pointing out Turkey's success in the healthcare area with its infrastructure during the coronavirus pandemic, Erdoğan said, "We have proven to the whole world that our country is prepared for all kinds of different scenarios and can act fast in the state of emergency. We grew by 1.8% in 2020 despite the pandemic. We were one of the two countries that grew their real economy among the G20 countries and ranked second behind China. We consider 2021, which we will keep determinedly fighting against the pandemic, as a preparation year for entering a period of qualified growth in the medium term."

"Macroeconomic and structural policies form the backbone of Turkey's new economic reform"

The new reform program will further consolidate Turkey's strength and provide grounded and realistic solutions to its weaknesses, Erdoğan said. "Macroeconomic and structural policies form the backbone of Turkey's new economic reform. Turkey will definitely create sustainable, strong, and quality growth that will conform to its post-pandemic economic structure."

Economic Reform Package

On the reforms, Erdoğan said:

  • Our focus is on public finance, inflation, the financial sector, current account deficit, and employment as part of macroeconomic stability.
  • We need to achieve a series of structural measures and transformations along with macro policies to maintain our stability.
  • For this purpose, we will be implementing policies covering issues such as spending discipline, public debt management, tax regulations, public procurement tenders, public-private partnerships, and state-owned enterprises.
  • Our first reform will be towards setting a stronger public finance structure to guard against risks.
  • Measures to encourage investment, strengthen the institutional structure, facilitate domestic trade, competition policies, and market surveillance and checks are in the reform package as part of structural policies.
  • We are increasing transparency and accountability while expanding the budget right of the Parliament. For this, we are going to implement 2 important policy changes.
  • We review the circulating capital, close the inefficient ones, and gradually include the others in the central government budget, thus under the control of the Parliament.
  • As we have absolutely no tolerance for waste, we are implementing important regulations that will expand the understanding of savings in public administrations.
  • We are working on making business and transactions related to public personnel to be administered by a single entity.
  • With the understanding that public administration is a whole, we aim to create an economist perspective in local governments as well as in the central government.
  • We are lowering the share of FX-denominated debt in the total debt stock to reduce the fragility of the debt stock against external shocks.
  • We will mainly contract debts with our own money and use Turkish Lira-denominated bills.
  • The reform package also includes a tax exemption for low-income tradesmen.
  • We are also strengthening the cash management in the Treasury. For this purpose, we collect the accounts of institutions that are not used by the Treasury in the Treasury Single Account (TSA) System, ensuring better efficiency in cash management.
  • We strengthen policies that will lower the risk premium and borrowing costs of our country.
  • We are updating the Tax Procedure Law to reduce informality and encourage tax compliance.
  • We exempt approximately 850,000 of our tradesmen, such as hairdressers, plumbers, milliners, carpenters, lathe makers, tea house operators, tailors, and repairmen, who are subject to small business taxation from income tax, and we remove their declaration obligations.
  • We are reducing tax loss and evasion by gradually expanding the use of electronic books and electronic documents.
  • We are launching the Turkey Digital Tax Office implementation, which will be available 24/7.

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