ANKARA
The Turkish government is getting good results in rebalancing the economy, Deputy Prime Minister Ali Babacan said on Thursday.
In an interview with the Japanese Nikkei newspaper on Thursday, Babacan, whose particular responsibility is the economy, discussed where policy has been successful, as well as his own future.
The Deputy Prime Minister, who deserve ample credit for the country’s success, has been a member of parliament for three terms. The Justice and Development Party to which he belongs does not allow its members to seek a fourth term in the Turkish legislature.
Some analysts have expressed concern about instability in Turkish markets if Babacan, now 47, leaves his post to an inexperienced newcomer after 2015 election.
“I should be leaving, but we also have a system where ministers can be appointed cabinet members but not necessarily be elected members of parliament.
However, this is very exceptional. So I think it depends highly on circumstances, but if it is my choice, I would like to return to the private sector. However, I have learned during 12 years in politics, that it is circumstances that dictate results. Hence, I do not want to make any predictions about what is going to happen next year after elections.”
Babacan stressed that the government's policies of solid fiscal stability and economic restructuring will continue. The independence of the central bank will be preserved.
He said that despite this year's local and presidential elections, the budget deficit for 2014 will be even lower than the initially projected -- it will narrow to 1.4 percent of GDP from the projected 1.9 percent of GDP.
Babacan said that macro prudential policies -- systemic-based financial regulation -- would be expanded.
"Unlike many countries, Turkey is effectively implementing macro prudential policies. It is a new area, but we are getting very good results. It will be very important to contain domestic demand and to divert credit channels to businesses and investments rather than to consumer credits," Babacan said.
"We must make structural reforms to reduce dependence on energy imports as well as to upgrade our industry to producing more advanced technology, more value added products, with more R&D and more branding," said Babacan.
Babacan also hoped that Turkey could soon conclude an economic agreement with Japan. "Turkey and Japan will start formal negotiations in December. I hope the negotiations may be concluded as soon as possible. I think it is important to watch EU-Japan Free Trade Agreement negotiations and we would like to have a parallel economic partnership agreement with Japan very soon.”
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