World Bank made a statement about Latin America on June 2nd. The statement reads: Latin America is performing well compared to previous crises. The region is foreseen to contract by 0.9 percent in 2009. Economic bounce back and recovery in Latin America will follow those in the developed countries. Unlike in the previous crisis, Latin America will easily follow the developed countries in the occurrence of the positive trend. This is the case, because Latin America, before the emergence of the crisis, saved when things were on track, and then started to spend the amounts saved in the right direction under the scope of economic support packages. This is what we get from the statement of the World Bank. Now, let us assess the situation for Turkey along with this statement and go on further with the issue we did not conclude on the day before. This is the unconcluded point: how do Turkish companies perform and how the production capacity of the Turkish economy will overcome this process? Please go on reading if you wonder about 2010.
First conclusion to be drawn from the statement made by the World Bank is: Turkey is not the only country who holds the chance to benefit from the favorable developments around the world. Over the period we are in, this is the first point to be kept in mind to turn the crisis into an opportunity. The taste left in our minds by the World Turkish Entrepreneurs' Congress organized in 2009 by Union of Chambers and Commodity Exchanges (TOBB) and Foreign Economic Relations Board (DEİK) was exactly in this direction. Turkey goes through a period in which it will encounter the most rapid ground loss in terms of foreign economic relations and will have to leave its position. When making calculations, it will be wise to remember that this period will face acceleration of competition in the foreign markets. That some markets will grow faster than others over this period can only be the indication of sharpened competition. The second issue to follow this point is: In the current milieu of escalating competition, governments of other countries take measures that will plump for those from their country. You may not like the measures; however, the steps taken show what is going on. These measures are directly geared to support foreign trade and activities that will generate foreign currency. The rise in the number of anti-damping investigations shows what is going on. Numerous countries have been concentrating on protecting national companies in the milieu of escalating competition. This point must be kept in mind. Third conclusion to be drawn from the statement above is directly related to domestic market and the corporate sector: governments of other countries strengthen the corporate sector for the forthcoming periods via strong economic support packages. Then, it is necessary to take measures to protect the production capacity of the economy. Behind the success lie designing the correct economic policy and an excitement that is kept alive. The main issue there is: It is time for active economic policy. This as well must be kept in mind.
Let us continue with the fourth point: Recovery in developing countries like Turkey will follow that in developed countries. It is not possible to change over a year the foreign trade structure and domestic saving level of Turkey in a comprehensive manner. Since we have limited amount of resources, differentiate vital from important. It is necessary to not confuse the immediate agenda and the medium term agenda of Turkey. Immediate agenda pertains to clearing the current bar without a fault. In the medium term, it is necessary to not lag behind in the race. The problem is: One who is ready to set sail for the ocean can be drawn in the brook on the way to the ocean. The current environment in Turkey indicates that there is some confusion. And in the current milieu of escalating competition, confusion is no good but bad. It is wise to stick this fact into minds for good.
Fifth point is not drawn from the statement above; it is our consideration. Turkey holds an incredible economic potential for the upcoming period. As being frequently emphasized recently, "There is crisis; there also is remedy". The problem is the trouble we face in turning power into action. Here, the point to be kept in mind is: First take the precaution, than pray to God.
Let me touch upon the corporate sector issue broadly. Turkish companies, like companies of other countries, were caught unprepared by the crisis. Currently, they are trying to turn the wheels after a fashion by their own means. To do this, they are spending the resources at hand. The main factor that enabled "growth without credit" in the aftermaths of the 2001 crisis was that the resources at the hand of the corporate sector were mobilized. However, back then, there was a way-out strategy. Today, however, there is none. Back then, companies knew the game strategy of the public sector. Today they don't. It will be wise to analyze also this factor when assessing the upcoming period. Dynamism of the private sector must be channeled to specific points with a way-out strategy. In such periods, wasting resources must be avoided more than ever.
Crisis periods are periods where we have to protect capitalism in particular from capitalists.
This commentary was published in Referans daily on 04.06.2009
