The Economic and Political Situation in Turkey: The View from the Opposition

  • Thursday, Feb 5, 2009
  • Mithat Melen
    Member of the Turkish Grand National Assembly

    National Action Party (NAP)

    February 5, 2009

    Summary of remarks:

    • The world is facing a very serious economic crisis that will also affect Turkey and it is unlikely that there will be a recovery before 2011.
    • The International Monetary Fund (IMF) is always the last resort for Turkey; however the IMF is itself under pressure to find the money for all the counties in difficulties.
    • The years of plenty with imaginary wealth are over for Turkey. The infrastructure in Turkey is not prepared for the crisis.
    • Whether it is the IMF or the European Union (EU), Turkey needs an external anchor. However, we can not discuss the economy with the Europeans as everything is tied to political problems, especially Cyprus.
    • Every Turkish government comes into office pledging tax reform, but there has not been any serious attempt during the last forty years. Four-fifths of the population does not pay taxes. The Justice and Development Party (JDP) government had the opportunity to revise the tax system as it has a clear majority in parliament but did not do so.
    • Every six to seven years there is an economic crisis in Turkey and each economic crisis leads to a political crisis.  The JDP may not suffer from the economic crisis in the March 29 municipal elections as it is giving direct aid to people in need.  However, the JDP may face difficulties if an agreement with the IMF inhibits its ability to continue this process.
    • There has been an explosion in the number of Turkish universities and university graduates are not finding jobs.  This is contributing to the growing youth unemployment problem.
    • 50 percent of the economy is still controlled by the government, and 50 percent is the ‘grey economy’.
    • The trade with the United States is non-existent. One can not have a strategic partnership without significant economic interaction.

    Mithat Melen was elected to the Turkish Grand National Assembly in 2007. Since 1992 he has been teaching economics at the University of Istanbul. Previously he worked at the Turkish treasury.