Turkey owes its successful recovery performance to the banking system. However, these days we are angry at the banks.

The growth figures for 2010 have been announced. Turkey's economy grew at a rate above expectations in the last quarter of 2010, at 9.2 percent. The overall growth rate for 2010 was also above the expectations, at 8.9 percent. In 2009, the economy contracted more than expected, by 4.8 percent. From 2008 to the present, Turkey has been firstly among the ten economies that have contracted the most and then among the ten economies that have recovered the most rapidly. At the beginning of the process, we failed to put forth a set of measures that would mitigate economic contraction. Today, we are failing to manage the rapid recovery process.

Let me state a finding first: The 2010 growth figure signifies an imbalance.  I believe that the statements of Mr. Ali Babacan, State Minister for Economic Affairs, about the "unconventional monetary policy framework" introduced by the Central Bank must be read from this perspective. Measures are being taken to eliminate the existing array of imbalances, yet with a certain delay. The 2010 growth figures indicate this delay. This is quite   a high ratio given Turkey's capability set. It would be wise, given the road conditions and the car we have, not to ride this at too high a speed. I think that the IMF report that for some reason has not been announced yet is of importance also in this context.

The first question to ask: Is it the banks that are responsible for the imbalanced course of Turkey's economy? In one aspect, yes. I think there are two reasons that enabled the rapid recovery, neither of which is related to the measures implemented by the government. The first is that the banking system was not affected negatively by the global crisis. This is connected closely to the fact that the Turkish banking system has not matured fully yet and the security system is not well established. Previously I referred to this with the primitiveness of our financial system. The global crisis, while directly affecting the advanced organisms, does not touch primitive life forms. This is the first point to state. The second reason is the rapid increase in fund inflows to Turkey along with the crisis that erupted in the European Union. Just take a look at the figures. The process that started with the Greek crisis has supported Turkey's economy. The incoming fund surplus is transferred to Turkey's economy through the banking system channel.

Let me stress two conclusions up to this point. First, Turkey owes its successful recovery performance to the banking system. However, we are angry at the banks nowadays. Second, the imbalance in the economy caused by the rapid growth which became visible with the escalation of the current account deficit is related closely to the imbalance felt among the European Union economies. The savings surplus that originated from the slowdown in growth has enabled Turkey to grow beyond its potential. However, such growth performance is not sustainable. The average growth rate between 2008 and 2010 was 1.8 percent. This is not good.

So what is the deal? The source of the growth performance of Turkey today is the banking sector. Then, if this is a good thing, why are we angry at the banks? Or, if this is a bad thing, why are we bragging about the current growth performance? It is just like the  Nasreddin Hodja anecdote: Hodja brought home two kilograms of meat after months. He was looking forward to dinner, but his wife, while cooking the meat, ate it up. When Hodja got home in the evening and asked about the meat, she said, "The cat stole it, I could not catch it." Then the Hodja caught the cat and weighed it. Seeing that it weighed two kilograms, he turned to his wife and said, "If this is the cat, where is the meat? But if this is the meat, where is the cat?" So, if the economic growth performance is good, why are you in distress? But if you are not in distress, why are you pushing the bankers, to whom you owe the successful growth performance, into distress?

The bankers' job is to do banking; the administrators' job is to administer the economy without causing problems. A banker is not the state minister for economic affairs.

This commentary was published in Radikal daily on 01.04.2011