Deputy PM blames construction code for easy money, ugly cities

ANKARA

Deputy Prime Minister Ali Babacan (C) and other ministers attend the first meeting of Economic Coordination Council of the 52th government in Ankara. AA photo

Turkey needs a change in codes to shift investments from the construction sector to other industries, said Ali Babacan, the deputy prime minister responsible for the economy, in a televised interview yesterday, adding that such a shift would prevent “ugly” cities.

Babacan stressed that earning money in the construction sector is “easy” and pulls down the share of industries in the national income, adding that this is “not a good trend.”

“The development plan code should be adapted to prevent easy earnings. The code needs to be regulated,” he said, adding that one of the fundamental problems is that the return on investments in industry takes five or six years, which is much longer than construction.

 Babacan stressed that the problem wasn’t simply economic, also drawing attention to the aesthetic problems with modern buildings in Turkey.

“Vertical constructions have increased in Turkey due to problems in the development plan code. An area with constructions generally at two or three stories can suddenly get authorization for multi-story buildings. This makes cities ugly, paves the way for easy revenues, and casts doubts on the fair distribution of the rent,” he said.

However, the deputy prime minister added that he is not sure such necessary legal changes will be possible ahead of next year’s general elections in June.

The balance sheets of large companies are also on Babacan’s agenda, he said, announcing that a new study on strengthening firms’ capital had been launched.

“Our company owners, capitalists tend to park their money in other addresses instead of keeping it in their own company. There is too much debt on balance sheets. So we have launched a study that would encourage capital, not credit,” he said.

The government has launched a one-year study to collect data on the monthly incomes of citizens in order to assess the maximum limit of loan repayments, Babacan also said, adding that this would be another measure to cut the rise in loan growth.

In addition, Babacan said the current account deficit was a priority for the government, and vowed that the year-end inflation figure would remain in single digits.