Economic recovery efforts in Turkey draw denunciation
Istanbul — Turkey's market-oriented economic policy has become a topic of heated controversy, with the chief architect of that program, Deputy Prime Minister Turgut Ozal, at its center.
A vigorous compaign has been lauched against Mr. Ozal and his economic stabilization program by some former politicians, leftist intellectuals, and lately, some leading businessmen as well.
They share the belief that the monetary and free-market policy now in force has failed to put the ailing Turkish economy back on the way to recovery and has instead aggravated the nation's critical economic situation.
Mr. Ozal, who introduced a stabilization program last January under the deposed premier, Suleyman Demirel, and was named as deputy premier in charge of carrying on the same economic policy after the military takeover of last September, considers these attacks as unfounded and ill-intentioned.
Addressing a group of businessmen recently, he said the economic stablization program "is working successfully." There is, he added, no shortage of any commodity except coffee. Black market and two-tier prices have been eliminated. Foreign exchange transfers are made on a more regular basis. The annual rate of inflation has been brought down to 40 percent from over 100 percent last year.
He also pointed out that remittances from Turkish workers' living in other countries have reached a record level of about $2 billion this year. During the last few months, production has been picking up, and exports last October were 32 percent higher than last year. The provisional estimate for November, moreover, puts the figure 46 percent above the same month of 1979.
Mr. Ozal did not deny that Turkey's trade balance is in deficit, but said if the current balance of payments policy is persistently carried out for four or five years, Turkey can expect a real export boom. Once this is achieved, Turkey will be able to solve its economic problems, it is claimed.
Mr. Ozal's economic concept, adopted by the generals who seized power three months ago, is based on the idea of a free-market economy. The policy has the full support of the West and the International Monetary Fund. Under the program , interest rates were freed and raised to record levels, thus encouraging savings; subsidies to nonprofitable stateowned enterprises were cut or reduced; the value of the Turkish lira was frequently adjusted through devaluations; and measures to limit government interference and to promote private and foreign enterprise were introduced.
The introduction of this program and the continuation of the same policy under the present military regime marks a turning point in Turkey, which for the last 50 years has been accustomed to living with interventionist policies.
Supporters of interventionist policies, including former politicians, economists, and intellectuals, are severely criticicing Mr. Ozal personally and claiming that the free-market or monetary system as applied now is not suited for a developing country like Turkey. They say this system not only fails to resolve the problem of inflation, but creates more unemployment and social injustice.
Ziya Muezzinoglu a former minister of finance under the left-of-center government of Bulent Ecevit, says Mr. Ozal's program has only increased the dimensions of the economic crisis in Turkey. In his view, inflation has actually accelerated and not declined. The foreign exchange situation has not improved. Unemployment has risen. Production and exports have not reached the expected level.
According to Mr. Muezzinoglu, the present economic system in Turkey is inspired by the "Milton Friedman school." He charged: "That model has proved to be a failure not only in developing countries, such as those in Latin America, but even inindustrialized countries like England. There is hardly any need to discuss its usefulness for a country like Turkey."
Mr. Ozal denies that his present economic policy is based on Dr. Friedman's theory. "There are some points in our program that are consistent with Fridman's views, but our system was made according to this country's conditions, " he stated.
According to Mr. Ozal, the stabilization program is a "package" containing pragmatic economic and social measures to restore Turkey's economic health. He points out that "the genuine honest businessmen" who have been complaining laely about the side effects of the current policy, such as high interest rates, inflation, and frequent currency devaluations, should show patience. In his view, the situation is rapidly improving, but Turkey needs time to "get out of the present bottleneck."