Unakitan opposes criticisms

Turkish Finance Minister Kemal Unakitan has opposed criticism that his government is using the economy for leverage to gain votes in the upcoming general elections.

Unakitan opposes criticisms
When the Justice and Development (AK Party) came to power in 2002, the budget deficit was YTL 40 billion, he noted, adding that as of the first five months of 2007, it is only YTL 3.4 billion.

For Unakıtan this is a clear indication of their avoidance of such policies. "If the government had undertaken populist policies to gain the hearts of voters, this deficit sum would be much higher."

According to him such policies have always been the main factor dragging the country into "swamps of debt."

Unakıtan spoke about the AK Party's performance during the last four-and-a-half years, as well as their plans for next period after the July 22 parliamentary elections -- if they can come to power again.

He was dismissive of a populist vote-winning approach: "Some were claiming to give two keys, one for a home and the other for a car. Some were promising on the election field to give voters 'five cents more' than their competitors. All of these policies of outbidding have brought the country's economy to the edge of collapse."

The minister also shared his assessment of the privatizations.

The electricity distribution tenders were not canceled and will be completed by next year at the latest, along with those of the power plants, Unakıtan said.

He noted that the sale of the National Lottery (Milli Piyango) will be made by this year if the necessary legal work is finished, emphasizing their determination to also finish the privatization of highways and bridges.

The minister also argued that the country's macroeconomic indicators have improved permanently and that it is now the time to take steps in microeconomic measures.

Unakıtan noted that the present economic acceleration resulted from 20 consecutive quarters of growth, and listed the following as primary targets for the next period if they come to power again: "To increase employment, decrease the current account deficit and boost exports to higher levels."

The minister also shared his assessment of the privatizations. The electricity distribution tenders were not canceled and will be completed by next year at the latest, along with those of the power plants, Unakıtan said.

He noted that the sale of the National Lottery (Milli Piyango) will be made by this year if the necessary legal work is finished, emphasizing their determination to also finish the privatization of highways and bridges.

The minister also argued that the country’s macroeconomic indicators have improved permanently and that it is now the time to take steps in microeconomic measures.

Unakıtan noted that the present economic acceleration resulted from 20 consecutive quarters of growth, and listed the following as primary targets for the next period if they come to power again: “To increase employment, decrease the current account deficit and boost exports to higher levels.”

The minister said they will change the structure of employment to lower unemployment rates by decreasing tax and insurance premiums.

A requirement to recruit a specified number of disabled persons and individuals with criminal records along with doctors and lawyers will also be abandoned.

Unakıtan said they had brought transparency to national accounts -- “a novelty that previous governments did not even discuss.”

In talking about publishing monthly budget results, he said: “In the past getting these numbers, even by request, was not easy.

Those writing about the economy were obtaining the budget figures from the International Monetary Fund (IMF) because past governments were reluctant to provide information about the terrible figures.”

The minister boasted of the economic success of his government, but finds it still “never sufficient.” For him now is the time to take microeconomic precautions, to distribute wealth more fairly and to increase the competitiveness of Turkish businesses.

The incentives issue was another area Unakıtan wanted to discuss. “We are particularly emphasizing the research and development (R&D) activities in our incentive policy,” Unakıtan said, adding: “Turkey now needs products with higher value. For example, we will exclude R&D investments from taxes. Additionally insurance premiums will be decreased by half for the companies involved in such investments. We will give them ‘entrepreneurial capital’ from the Finance Ministry’s coffers to strengthen their technical equipment.”

The current account deficit is not a weak spot in the country’s economy, Unakıtan said, objecting to the common belief that Turkey will be more likely to suffer from a crisis if the deficit increases further.

“All of the countries that recently joined the European Union also have high deficits. Meanwhile our deficit has fallen below 8 percent of gross domestic product (GDP). The decrease in the deficit has nothing to do with exchange rates,” Unakıtan claimed.

To emerge victorious in the battle against the deficit, however, it is necessary to increase exports as well as the competitiveness of non-financial sectors, he asserted.

Unakıtan also pointed out that Turkey is importing mostly intermediary goods or products, since they are much cheaper on the foreign market.

“If the cost of producing these goods in the domestic market falls to sustainable levels, companies will decrease their demand for import of these goods,” Unakıtan said.

The minister also mentioned what they plan to do with electricity prices if they come to the power again. The government has not increased the prices for four-and-a-half years.

Responding to a question about whether he has ever asked the Energy Ministry not to hike prices, he said: “We told them that we don’t want any money or a percentage of their profits. Instead we said, ‘Make your own investments and arrange your prices accordingly’.”

Unakıtan said the Energy Ministry should determine its own needs according to its resources without being a burden on the budget.

Starting this year the government canceled the collection of receipts for tax refunds. This was widely criticized as it will cause a sharp decline in the Value- added Tax (VAT) revenues of the state.

Unakıtan also replied to these criticisms saying: “There is no sense to continuing with such completely outdated programs. The Turkish population has to be more tax conscious with its new structure and conditions.”

He added that the tax revenues figures for the first five months have proven successful so far, almost in full compliance with the year-end targets. “There is no decline in our revenues.

The only decline stems from the decrease in domestic demand for automotives and the subsequent decrease in sales.

Additionally the increase in exports of the automotive sector has contributed to the money paid as tax returns to exporting companies. This has also impacted the low figures.”

Source: Today's Zaman
Last Mod: 19 Haziran 2007, 19:04
Add Comment