Recovery in Turkey's economy since the end of the first wave of the 2008 crisis relies on domestic demand. The recovery in the export markets is relatively slower. Here, the prolonged crisis in the Europe and the resultant slowdown in European economy have a role in this. We should underline that the challenges facing Turkish exporters due to intensified competition also play a role. The fact that recovery is driven by domestic demand brought current account deficit issue to the fore once again. In the aftermaths of the crisis Turkey has been growing compared to the year before, let aside the previous periods. In the meanwhile, imports grow more rapidly than exports. Since exports cannot boost due to certain specific circumstances, the increase in imports grab more attention. What does this imply? It obviously implies that Turkey has to import to make production. The rise in imports did not strike much attention yesterday, when export markets were operating smoothly.  İbrahim Tatlıses, a famous folk singer of Turkey, responded those criticizing him as "It is not that we had Oxford University in Urfa but I did not study there!" In this sense, when looking at the import dependency of Turkey's industrial production, we have to say "It is not that industrialists voluntarily become 'fake' exporters although Turkey has an industrial policy." If the snagging of the export performance of Turkey features again the industrial policy discussions, this can only serve to a good purpose. Let us see how.

Global integration is the phenomenon of the era. So, we should not miss this point when addressing the questioned discussions. In the current era, you cannot shut your doors and sit inside alone. Vladimir Putin, Former President, Current Prime Minister and President-to-be of Russia, banned wheat exports after a bad harvest period due to draught. Russia was an exporter country. Last week, wheat prices started to increase. This was featured at the cover of Yemen Times as follows:  'Security deployment in governorates over price hikes! The story complained about the recent hike in flour prices in particular. We must also note that the prices elevated at the eve of the Ramadan. The reason was the depreciation of the Yemeni Riyal against dollar. The public wanted to know why the government could not control the prices.  Putin's decision was not addressed, but in fact was involved. The people Yemen Times interviewed were complaining about the outcomes of the global integration process. As the rise in imports grab attention and give way to debates after the increase in domestic demand in Turkey, the same thing happens in Yemen. Everyone talks about their own problems; do not they?

We first have to note that globalization is the main phenomenon applying throughout the world. So, let this be the first point. The second is, there is no single way of adjusting the globalization process. Let us simplify the issue. There is no way to stay out of globalization; but there are two ways to adjust: either globalization process will adjust you to itself or you will set a way to adjust to the globalization process. The first happens automatically while the second is designed. Your designing the process does not necessarily require the establishment of a control economy. To exemplify; Turkey chose the first option while Korea selected the second. Korea decided how to adjust themselves to the globalization process. They naturally encountered problems. However, they are currently ahead of Turkey while we were at similar states three decades ago. Take the ratio of the per capita income in Turkey and in Korea to that in the United States of America (USA). The ratio was 20% three decades ago for both Turkey and Korea. Today, we are still there. On the other hand, Koreans achieved the ratio 60%. Let this be the second point, then.

Third point follows from the second one: When globalization adjusts you; i.e. when you surrender in a way to the globalization process and play the game by the rules, Turkey's example applies. Import requirement of the industrial sector happens to be higher. This is neither good nor bad. But this is the reality. If a country does not have a policy framework, and if subsidies are designed haphazardly, you cannot be angry at the outcomes. What did I say? You cannot fight with the reality. So, this is the third point.

Let this be the fourth one: It is not the exporters that are fake; it is the subsidy system itself. Mustafa Sönmez addresses a correct issue at his recent op-eds in Cumhuriyet daily: A part of the exporter sectors are in fact net importers. But the reason for this is the lack of necessary policy measures. Such policies were inexistent in the past and are so today. My favourite example for this is the production of televisions in Turkey. The sector is a source of price. Out of every three televisions sold in Europe, two is produced in Turkey. However, at the same time import requirement continues increasing. Why? Because Turkey failed to monitor the shift from tubes to plasma televisions and to take necessary measures; because human resources, technology, and research and development activities necessary were not combined in time. And this is the fourth point.

The fifth one: Industrial policy primarily consists of having taken the measures that will combine the mentioned requirements today. Second issue is that the set of such measures are not limited with the domestic level anymore. Today, the international value chain passing through the country must be designed. Future of the export performance rests on designing industrial policies for other countries on their territories. Malaysia does this. Then Turkey can also do it.

But the reality is: We yet have none.

Then, there is no point in getting angry.

This commentary was published in Referans daily on 10.08.2010