Time for a new reform agenda for Turkey

Turkey is currently in a political transition process – a very orderly one so far. Let me tell you what we know as of this Friday. We have a new president, a new prime minister and a new council of ministers. The successful Babacan-Şimşek team has kept its portfolio as deputy prime minister responsible for the economy and minister of finance, respectively. So there is no news when it comes to economic policy. No news is good news under these circumstances. So far so good.

However, I have been observing three alarming issues in the Turkish economy recently. One has been solved with the decisions this Friday. Prime Minister Davutoğlu hinted at another’s solution in his inauguration speech. A third is still pending, but that one is not a policy parameter for Turks. Two out of three positive development messages is not that bad. Let me be more specific.

First of all, minister Babacan was seen as the anchor of the Turkish economy. Many are relieved that he will stay on in the Davutoğlu government. I personally do not expect any adventures in economic policy, so that is one uncertainty less when it comes to Turkey. That is for all of us, both Turks and foreigners.

The second issue is that Turkey’s economy is in need of a strong new reform agenda. In the current, rather fragile parameters, countries like Turkey do not have anything to sell or any way to expand. What we can all do is to focus on the future, which requires a reform agenda. Ankara is now busy coming up with one. A new government, a new prime minister and a reform-minded, experienced economy minister are a good recipe for the task. Already, Davutoğlu touched on some major reform areas, and we will most likely see more of it in the new government program...