Yesterday we chatted with Mahfi Eğilmez on Dünya Web TV about his latest book, “Structural Reforms and Turkey”, which came out this month. We tried to answer the questions that were eliminated from the public. During the program, we realized once again that; Turkey has serious structural problems and urgently needs structural reforms.
Behind Eğilmez’s 23rd book, which has been published, is the accumulation of 50 years of experience in the public and private sector, at home and abroad. Based on this accumulation, the book includes correct assessments, correct determinations, and correct solution suggestions. Mahfi Eğilmez defined structural reform as “the restructuring of a system so that it can operate more efficiently and be more resilient to shocks”.
Structural reforms are also measures aimed at increasing the supply capacity of the economy. Successful examples show that; The first step in structural reform is to convince the reformer of the need for reform. The second point is that the social and economic costs of reform must be determined and shared equitably in society. The third point is the order of the structural reforms as well as their nature. This should be done with proper prioritization and sequencing.
There have been various attempts at reform in these lands since the Tanzimat Edict. Some have had good results. For example, the period 1920-38 is a very successful example of structural reforms. The Ottoman Empire was an agricultural country, but agriculture was done with primitive methods. There was no irrigation system. The production of tobacco, hazelnut, silk, cotton and olive oil, which constituted exports, declined rapidly. National industry could not develop. Cotton and woolen textiles, silk fabrics, sugar, soap, bricks, porcelain, glass, cutlery and even flour were imported. The Ottoman Empire was a non-industrial society that constantly had to borrow to cover its deficits. It was a country whose mines and railways were operated by foreigners, maritime transport was provided by foreigners, its financial system was controlled by foreigners and even its money was printed by the Ottoman Bank, a foreign partner . In the process that began on May 19, 1919, the modern Turkish Republic was established; the institutions and laws upon which modern Turkey today is built; Companies and facilities that carry the Turkish economy on its back; The values that gave Turkey its identity were formed.
To date, Turkey has structural problems that await urgent solutions. These problems weaken the economy; It condemns Turkey to the middle income trap. Some of them are social issues. For example, issues related to freedom of thought and expression, education, the rule of law and the independence of the judiciary. Another subject concerns political issues such as democracy and the separation of powers. Foreign policy, public services and economic and financial problems are other subjects awaiting solutions.
To reform literally means to remodel, to correct, to reform. At the heart of the reforms are behavioral changes. Economic reform, on the other hand, consists of taking measures to change the behavior of actors in the public and private sectors in order to stimulate demand in the economy in a sustainable but non-inflationary manner or to increase productive investments in order to realize growth and jobs. growth goals.
We have known and discussed the problems of the Turkish economy for years. Nothing remains unknown and unsaid. Reducing the use of imported inputs in the economy and the goal of a high value-added domestic and national economy have been included in annual and long-term plans and programs. Everyone knows that Turkey’s R&D expenditure is low, that we cannot innovate enough, that we cannot produce high-tech and value-added products that will allow us to progress. We are aware of the rigidities and shortcomings of our labor market. We all know that we are unable to generate domestic savings to finance growth and seek speculative money in foreign markets. They discussed the quality of education, the low enrollment rate in pre-school education, and the long way to go in vocational education. We are also aware that the weighted share of indirect taxes in the total should be seen as an indicator of informality and the narrowness of the direct tax base.
These are the economic pillars of structural reform. However, Mahfi Eğilmez takes a much broader view in his book. The book begins with John Locke’s quote “Where law ends, dictatorship begins”. He says at the beginning what must be said at the end. It explains how the ideal state should be within the framework of the rule of law, democracy, separation of powers and market economy approach. We see that; Unless principles such as merit, openness, transparency, accountability, equity in income distribution, freedom of thought and expression are implemented, the country will remain incomplete, problematic and brittle.