Senior IMF official praises ‘versatile’ business community in Turkey

“Turkey is poised and able to do business with Western Europe, with Central Europe, with Russia, with the Middle East, with the Caucasus, with North Africa. Turkey has a very versatile business community. And that served you well because when Western Europe is slower, Turkey can gain elsewhere; when Russia is slower you can gain elsewhere… So I think that Turkey should work towards making itself an attractive investment and business center. And I think it can do that,” said IMF First Deputy Managing Director David Lipton. 

The International Monetary Fund has recently increased its 2016 growth estimate for Turkey from 3.2 percent to 3.8 percent.

Lipton said it was good that Turkey’s growth has held up under all of the circumstances in its neighborhood and in the world. 

“We made suggestions for some years on how to make sure Turkey’s growth was higher but also stronger and more sustainable. And that includes making sure that Turkey’s current account deficit is kept under control and Turkey’s finances and financing requirements are kept under control. I think that raising savings, raising labor productivity that would improve competitiveness of exports, having a more open economy, more receptive to foreign direct investment, would in the long run strengthen the country’s competitiveness.

These are not new issues; they’ve been issues for decades. But they are important issues,” he noted. 

Turkey has long needed to promote savings and also needs to be working to increase labor productivity, said Lipton. 

“To make sure that wages don’t grow excessively, as if they do, they’re going to be cutting into the competitiveness of exports. These are long standing challenges. Turkey has made progress but I think those are the variables to be looking at. I think Turkey can sustain strong growth with the right policy approaches and with the dynamism and versatility of your business community,” he added. 


Migrants can be ‘Turkey’s strength’

Talking about the 2.7 million “mostly young” refugees in Turkey, Lipton said they could become an asset in line with a number of conditions.  

“Many countries with demographic problems would be happy to have young refugees and migrants rather than older ones. Because they’ll have a long lifetime of contribution to the economy. But, of course, with the young, depending on where they come from and what their circumstances are, there is the need to educate and train. Our analyses suggest that from the standpoint of labor force and productivity, from the standpoint of the public finances, they would be the tax payers through entire working lifetime. Migrants can be a strength. Depending on the composition of the pool of migrants. The details matter,” he noted.