We have to initiate a number of reforms in order to alter the status quo which Suleiman the Magnificent would not like.

Last week officials of the ruling party raised some criticisms about the new economic policy proposals the CHP (Republican People's Party) declared as a part of their new economic program. The criticisms raised were mainly about how the necessary resources will be generated. Today I want to focus on two things that the questions about how to generate funds raise in my mind.

I believe the underlying source of the economic instability Turkey has faced for years is obvious: making public spending without generating funds. If you do not recall that period, please take a look at the current circumstances in Greece. In this context, it is a quite promising thing that debates on the economy across politicians involve how resources will be generated. They remind the society that no spending can be realized without having sufficient funds and make sure that everyone thinks about potential sources of finance. It is quite promising that we have upgraded to this level from "I offer what he offered plus five liras" level. 

We need a number of reforms
Does this development raise our hopes about the future, then? If the best 'thing' we can do for Turkey is to 'maintain the status quo' or 'be contented with maintaining the stability' we can lay back and make ourselves comfortable. However, it is beyond my imagination how 'we', who set the Thames on fire for a television series depicting Suleiman the Magnificent as a man who drinks alcohol and who is interested in women 'excessively' - for whatever that means - can settle down with the status quo. Some countries, Korea first and China after that for instance, have made big attempts to close the income gap with developed countries over the last five decades. We, however, still stand where we have been in 1960 in comparison with the USA or the EU. We have made no progress at all. If Suleiman the Magnificent was alive, he would most probably not like the status quo.

Then in this context do not you think that questions raised about how resources would be generated are weird? If this issue is questioned, they must have perceived a problem with resources. If such a perception is widespread, the circumstances are not pleasing. In deed, a number of reforms must be introduced to alter the status quo which Suleiman the Magnificent would not like. This certainly requires resources. 

Are we in a deadlock?

Then, is Turkey in a deadlock? Would it fail to realize reforms necessary to close the gap even if there had been the political will to do this and a neat design and implementation plan defining reform priorities? Thank God, we are not in such deadlock. Simplest international comparison shows that ratio of tax revenue to national income of Turkey is relatively low compared to developed countries or late comer countries which took important steps for development. It is also critical to note that tax rates in Turkey on the other hand are relatively higher.

Turkey has resources; but only potential resources. That potential can be utilized only if there is political will and a plan which compensates to some extent the losses of individuals to be affected by the process negatively or lose their jobs. The moral of the story would be therefore the problem is not related with resources. The problem is about how to overcome the informality.

This commentary was published in Radikal daily on 11.01.2011