The Republic, planning, and the production economy

With the Central Bank raising the policy rate once again in recent days, the interest rate has climbed to 30 percent, reaching its highest level in the last 19 years. Thus, Turkey has become the second country in the world with the highest interest rates, after Argentina.

So, who will pay the bill—and a very heavy bill at that—for the same government pursuing contradictory policies? Which social classes, segments, and strata will have to swallow the bitter pill?

Of course, the broad masses, retirees, laborers, the oppressed, low-income earners, those living on their wages, and the poor will pay the heavy price. Because the economic policy structure that has made the rich richer for years has not changed, and because an approach that views the economy ideologically and grasps it from a class perspective is not dominant, the chasm between the wealthy and the poor will deepen even further.

First of all, let us see that our country's economic problems are not cyclical; they are structural. They are related to how the economy is perceived. They cannot be thought of independently of ideological preferences. For this reason, it is wrong to expect a solution to economic problems in the near future. It is wishful thinking to believe that Turkey can exit the path it has been on, especially since the January 24 decisions, in the near term. Neither the government nor the opposition has such a goal, preference, or program. The differences between them regarding the economy are very small.

WHAT SHOULD BE DONE?

In the coming period, Turkey must first stand out with products that are strong in the manufacturing industry, ambitious in intermediate goods production, create added value, and contain advanced technology. Because it is impossible to become wealthy or compete with the world using products based on low or medium-level technology.

Moreover, the world is rapidly turning toward artificial intelligence technology. Artificial intelligence and other digital technologies will be much more effective, much more functional, and much more widely and intensively used in the near future. This situation will both increase unemployment and offer new opportunities. Who produces these technologies and who uses them in the most efficient and effective way is also very important. Of course, their benefits and harms will be debated much more.

In the future, the world will talk more about the relationship between technological development and production growth, the relationship between technological development and labor productivity, the relationship between labor productivity and wage increases, and the relationship between wage increases and social welfare and national income.

Unfortunately, our productivity is not at the desired scale; it is low. In our export products, low and medium-low technology products are dominant, with both being over 30 percent. The share of products containing advanced technology in exports is close to 4 percent; it is not even 5 percent. Yet, it needs to rise above 30 percent.

In short, it is impossible to become wealthy and develop without planning the economy.