Turkey’s new economic action plans urge savings

ANKARA

Speaking at a press conference accompanied by seven members of his Cabinet, Davutoğlu announced a second stage of economic action plans. AA Photo

Shortly after announcing the first nine programs of a detailed economic transformation plan, the government has announced an additional set of macro-economic reforms, with Prime Minister Ahmet Davutoğlu putting particular emphasis on the need to reduce public expenditures.

“The latest growth figures have been below our expectations … However, it is a performance that has been appreciated in general,” Davutoğlu said on Dec. 18, recalling that Turkey’s gross domestic product (GDP) had grown 1.7 percent year-on-year in the third quarter of 2014, according to official data released on Dec. 10, sharply below forecasts that had predicted growth of around 3 percent.

Speaking at a press conference accompanied by seven members of his Cabinet, Davutoğlu announced a second stage of economic action plans.

The measures comprised various prioritized structural reforms, including increasing domestic savings at the national level, preventing wastefulness, rationalizing public expenditure, raising the quality of public revenue, improving the business and investment climate, and developing statistical information on infrastructure.

“From now on, when I make initial visits to a place, none of the local administrations, governorates or other institutions will present me with a plaque or a gift,” Davutoğlu said, striking an austere tone.

“Packages or gifts that are just waste and aimed at celebrating a person will not exist in the public [sector] from now on,” he added.

“If a gift is to be presented, then planting a tree may be the gift and it may be announced that those trees have been planted in that region on behalf of the visiting person. This would be enough,” Davutoğlu said.

Also speaking at the same press conference, Deputy Prime Minister Ali Babacan drew attention to how new zoning plans and amendments in zoning plans have recently led to considerable unearned revenue in the construction sector, calling for “fairness” in the determination of rental prices.

The government has begun a study to provide equal opportunities and justice, and to determine the rent that the state should request on state-owned land, Babacan said at the same meeting.

“The construction sector is a field where rents [unearned revenues] develop out of nowhere. We will imminently implement a study that will provide equal opportunity in this area. What matters here is being able to secure justice,” he said.

“There is a need for emphasis in order to avoid misunderstandings. The construction sector is a sector that is important for Turkey and has open prospects. In the upcoming period, we expect to see a rise in the sector’s share of national income. However, while this sector develops, revenues need to be taxed and unfair revenues need to be prevented. This is the essence of our study,” the deputy prime minister added.