Turkish economist and former Treasury under-secretary Mahfi Eğilmez has made an analysis of the economic problems Turkey is currently facing, and said the main factor that was at the core of the problems was not economic, but a number of fundamental shortcomings in the political system.
Speaking on a Webcast of the Turkish business newspaper Dünya on Friday, Eğilmez also said that there would be no inflation or currency crisis had the policy interest rate not been cut by five percentage points.
Answering a question about the current economic problems such as high inflation and the currency crisis, Eğilmez started by commenting on the recent implementation of interest rate cuts by the Turkish Central Bank.
“If the Central Bank had not cut the interest rate from 19 to 14, we would have been in a better position today. Neither the inflation or the currency rates would have arrived to such levels. I can see that very clearly,” he said.
“When we then look at the steps taken after the cuts in the interest rate, we see that many instruments have been introduced. The currency protected deposit account has been introduced, and now other instruments are expected to be also introduced. And none of them can fill the gap of the interest rate.”
He then began to explain that what was really at the root of problems was not just economic.
“And yet, I don’t believe that the main factor underlying the problems we currently face is an economic one,” he said.
“We have other shortcomings that impact the economy. For instance, we have shortcomings in the rule of law. This is a crucial shortcoming. We also have shortcomings of judicial independence and the central bank’s independence. And there is also the issue of data reliability, data credibility. No-one is believing these figures. So, the Turkish Institute of Statistics ought to be made independent. But above all of these issues, democracy in Turkey needs to be improved.”