As unemployment rises, privatization is accelerated

It is now confirmed that the year 2012 will be completed with low growth figures. One of the results of this can be seen in the rise in unemployment, which has also picked up speed. Recent data announced has further confirmed this trend.

We can say that the government’s efforts in the economy are focusing on revitalizing growth. The 4 percent growth target set for 2012 has become a dream, moreover, even this figure, which was revised and pulled back to 3.2 percent, will not be able to be met either. The growth rate for 2012 is estimated to be between 2.8 and 3 percent.

The government has set the growth target for 2013 again at 4 percent. We know that Deputy Prime Minister Ali Babacan and his team want to act cautiously while accelerating growth and believe the 4 percent target should not be exceeded for equilibrium to be maintained.

However, despite that, we see that the government and party administration target is to “grow as much as possible.” Before the local elections in 2014, before general elections and presidential elections; in other words before the year that elections will start being held one after the other, apparently, Prime Minister Recep Tayyip Erdoğan and the party administration will not refrain from pushing the limits of the equilibrium to maximize growth rates as much as possible. It is not possible to know in advance how much global and domestic equilibriums will allow this.

Deputy Prime Minister Babacan and the Central Bank, on the other hand, no doubt will opt for “cautiousness,” consequently trying to protect stability.

Hence, the brakes vs. the accelerator debate in the economy may rekindle in 2013.

It is also seen that while the government is targeting revitalization of the economy, on the other hand, it is focusing on accelerating privatization. After the public offering of Halkbank shares, tenders handing over the management rights of eight highways and two Bosphorus bridges for 25 years have also been conducted. Even though it was known that the bidding rates were low, it is hard not to notice that this is trying to be presented as a success story.

New privatizations
With the new year it is understood that important sales providing significant revenue opportunities to the budget will be launched, such as the sale of Türk Telekom shares and the privatization of the General Directorate of the National Lottery.

Before anything else, we have to say that the government wants to accelerate privatization even though it is known that within the present global and local environment, privatization revenues will remain low and that bids offered have confirmed this. Indeed this is the decision of the political will, but it is also important where the revenues raised from them be spent.

In short, this question comes to mind, “Is privatization done to revitalize the economy before the 2014 elections and to increase public spending?”

It is a known fact that revenues raised from privatization should be used to increase productivity in the public sector and decrease debts instead of increasing spending.