Declaring 'The government is unaware of the crisis,' he revealed the hidden truths

Vice President Cevdet Yılmaz made statements during the 2024 Central Government Budget Law Proposal briefing meeting.

Stating, "We are allocating 1 trillion 28 billion liras in our 2024 budget to cover the damages caused by the earthquakes," Yılmaz continued, "Excluding earthquake expenditures, the 2024 budget appropriations are 2.8 trillion liras for personnel expenses, 669.8 billion liras for the purchase of goods and services, 4.5 trillion liras for current transfers, 636.5 billion liras for capital expenditures, 298.2 billion liras for lending expenses, and 1 trillion 254 billion TL for interest expenses."

Following these remarks, Yeniçağ columnist Esfender Korkmaz revealed Turkey's hidden truths in his article titled "The government is unaware of the crisis."

Here is that article:

Vice President Cevdet Yılmaz concealed some of Turkey's realities in his budget presentation speech. Some of them are as follows:

1. The government calls the 2024 budget an investment budget, but it is not.

The Vice President says, "Our budget has a holistic and inclusive development approach that supports investment, employment, production, and exports."

In the announced budget, capital expenditure appropriations are 636.5 billion liras, and total budget appropriations are 11,089 billion liras. The share of capital expenditures within the budget is 5.3 percent. In previous budgets, this share was around 6 percent. Despite the Vice President's statement, he claims the share of investments is 14 percent, but he does not disclose the source.

For the budget to be an investment budget, this share should be 20 percent, not 5.3 percent. However, there is no source for investment in the 2024 budget. The majority of the budget is allocated to transfers and election populism.

2. Which exports are increasing?

The statement also emphasized that there is an increase in production and exports.

According to TUIK data, in the 8 months between January and August;

• The increase in exports is -0.4 percent; in other words, there is no increase in exports, there is a decrease.
• The increase in imports is 3.4 percent, and the increase in the foreign trade deficit is 11.9 percent.

There is no need to prolong the discussion. Looking at the data, it is clear that the Vice President's statement is clearly incorrect.

3. Putting 10 percent inflation and 60 percent inflation in the same category is burying one's head in the sand.

In the 2024 budget presentation, it was stated, "While the inflation problem continues on a global scale in many developed and developing countries..."

Such a statement is completely wrong. Because if we take the latest data;

• According to the Central Bank's July report, the average inflation in developing countries in the world is 6 percent.
• The average inflation rate for OECD countries, including us, is 7.7 percent.
• According to Trading Economics data, the average inflation in G20 countries, excluding Turkey and Argentina, is 3.84 percent. There is high inflation in two countries included in the G20. Turkey is at 61.53, and Argentina is at 138. There is a crisis and the IMF in Argentina.

The political power has always done this. It tried to create a perception by calling black white. For this reason, the confidence of domestic and foreign capital in the government has decreased. Foreign capital is not coming; it is leaving. Domestic capital is now investing abroad as well.

4. It is not correct to compare growth with the global average.

Turkey is a developing country. There are both developed and developing countries in the global economy.

Growth in developed countries is lower than in developing countries. This is because the GDP size in developed countries is higher. For example, in 2022;

US GDP grew by 2.6 percent and reached 25 trillion 465 billion dollars. The contribution of 2.6 percent growth to GDP was 662 billion dollars. Turkey grew at a higher rate of 5.5 percent in the same year, and the contribution of this growth to GDP was 49.8 billion dollars.

For this reason, a developing country like ours should be compared with other developing countries. In 2023, Turkey's growth rate is equal to the average of developing countries, but the 2023 estimate remains lower.

As for growing despite the earthquake; an earthquake causes a loss of wealth. It negatively affects growth due to the loss of manpower and contraction in production. But at the same time, the removal of rubble, the construction of new containers and buildings, and the work of laborers and machinery increase the growth rate. Saying that we grew despite the earthquake is economically incorrect.

It is a frequently used example in economics; the demolition of a building is a loss of wealth. But due to the demolition, machinery and labor create added value, and growth increases.

Conclusion: The government cannot be unaware of these facts. Despite this, by comparing Turkey with the world growth average, it only deceived itself. It would have been more reasonable for the government to say that we will eliminate waste in the public sector in the budget and increase the share of investments.

5. I am not going into income distribution and impoverishment. Because everyone is already experiencing it.

News Source: 12punto