The Board of Directors of the Turkish Industry and Business Association (TÜSİAD) issued the following statement on recent developments in the Turkish economy:
“As demonstrated by recent economic volatility, it has become increasingly clear that the economic program that is being experimented will not achieve its intended results.
“TÜSİAD has repeatedly shared its views and analysis with the authorities and the public that the policy of premature interest rate cuts would result in volatility from the outset. We had cautioned about the risks of a major devaluation of the Lira, rapid inflation, pressures on investments, growth and employment, and most importantly, the impoverishment of our country.
“As a result of these policies, we are in an environment of no confidence and volatility. The massive growth in demand for foreign currency domestically has disrupted all economic balances.
“The policy choices implemented here, are not only creating new economic problems for businesses, but for all of our citizens. There is a greater risk now for even more structural problems in the long run. Even exporters, who ostensibly should benefit from a lower exchange rate, are in hardship.
“As a result of these developments, it is urgent that we assess the damage that has been done to the economy, and quickly return to the implementation of established economic principles, within the framework of a free market economy.
“Moreover, we had called attention to the problem of deinstitutionalization in Turkey and presented a model for achieving sustainable economic development with the recent publication of our report entitled, “Building the Future.” We must implement rule-based policies that benefit our economy, increase predictability, improve the investment environment and boost development. In order to improve confidence, we must strengthen institutions and rules in an effective and comprehensive manner.
“The Turkish business world stands to support sound policies in this direction.”