TEPAV Director Sak: “Populist Approaches Negatively Affect the Volatility of Growth” Güven Sak spoke at the 38th Economists' Week
ISTANBUL – TEPAV Director Güven Sak, emphasizing that Turkey, which has been a part of global economy since the 1980s, has become richer during the process while its economic objectives remained local and political. Sak said “Populist approaches negatively affect the volatility of growth in an economy which is open to global shocks.”
This year, The Economists' Week organized by Istanbul University Faculty of Economics Alumni Association since 1974, was held in the University’s Cultural and Convention Center on 8-10 April. TEPAV Director Güven Sak was a panelist in the first panel on April 8, 2014.
During his speech, Güven Sak expressed how rising uncertainty across the global economy changes growth and sector dynamics in Turkey. He indicated that to achieve the same rate of growth, Turkey had to have a higher current account deficit compared to previous periods, and was unable to find the external capital needed to finance such deficit. Stating that measures taken to reduce primary surplus in order to lower the high level of public debt in the early 2000s did not help Turkey improve its domestic savings rate; Sak said that fiscal policy had to set targets other than cutting primary surplus in the period ahead.
Emphasizing that Turkey should focus on areas other than the economy in order to continue transformation which took place between the 1990s and the global crisis; Sak cited education, justice, tax regulations and urbanization as the priority areas. Underlining that productivity growth triggered by rural-urban migration in the previous periods had ended and that it was now necessary to focus on intra-industry productivity growth, he drew attention to a possible slowdown in economic growth in the period ahead. Sak stressed that it was necessity to develop a roadmap by building a new growth model. In this context, he accentuated that Anatolia currently was moving away from industry and that this trend required an urgent action plan.
