Sunday, 5 July 2009
The Turkish state minister for economy underlined importance of structural reforms and financial policies for overcoming the economic crisis.
Turkey's State Minister & Deputy Prime Minister Ali Babacan said that the financial policies and structural reforms Turkey had been implementing since 2002 helped minimizing the effects of the global crisis on Turkish economy.
Turkey's national domestic product was down in annual basis since the last quarter of 2008, and the unemployment rate was up 4 percent in a year, Babacan said during the European Business World Leaders meeting in the Finnish capital of Helsinki.
Babacan said Turkey had been affected particularly by the slump in foreign demand and international capital inflow.
"The structural reforms of the Turkish government aims to increase the role of private sector, flexibility and efficiency of the financial sector, and to base the social security system on a stronger ground," Babacan said.
The minister said that reforms protected the banking industry against foreign shocks.
"Turkish banking industry is fairly strong and lucrative, thanks to strong capital and efficient risk management practices," Babacan said.
Babacan said that robust financial discipline helped reduce public borrowing need.
The minister also referred to a number of temporary measures the Turkish government had taken to increase domestic demand, and said the government reduced the burden of employment on employers and broadened the scope of unemployment insurance payment.
Babacan said the government had made public a new investment incentive package which dropped corporation and employment taxes and launched a new loan guarantee mechanism for the small and medium scale enterprises.
"Turkey has also drawn a great deal of international investments. The international capital investments reached 70 billion USD in four years," Babacan said.
Babacan said three-fourths of those investments came from European Union (EU) member states, which was a clear sign that Turkish economy had integrated to the EU economy.
"The government is about to finalize a medium-term economic program, which will be a guide for macro-economic policies," Babacan said.
The minister said that program would show Turkey's national targets and strategies for the years between 2010 and 2012.
On impact of the global crisis on Europe, Babacan said particularly the Central and Eastern European countries were affected by the crisis.
Although the crisis began on the other side of the Atlantic, its effects on the Euro zone would be more serious due to the structural features of the region, Babacan also said.
