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NEW ECONOMY PROGRAM – STRUCTURAL TRANSFORMATION STEPS 2019 IN TURKEY

Treasury and Finance Minister Berat Albayrak announced the ‘New Economy Program: Structural Transformation Steps 2019’. Minister Albayrak said reforms will be made in the economy and the justice.

Albayrak stated that the financial sector is the leading reform area and the first sector under the financial sector will be the banking sector. Recalling that the new economy program ”is one of the most important priorities of this program to ensure that our banking sector maintains its strong structure and continues to finance our real sector sektör, Albayrak continued: ” Our first step will be to strengthen the capitals of our state banks. The Treasury and the Ministry of Finance will issue a 28 billion-TL Loan to the state-owned banks. We will discuss the issue of concordat and credit restructuring with a new legal framework that is much better, in everyone’s interest. ” Albayrak said that the balance sheets of public banks will be made more resistant by increasing their capital adequacy and liquidity coverage ratios.

Berat Albayrak, stating that one of the field reforms will be made under financial sector to implement is ‘savings and insurance’ area, “This period is an effective and healthy savings system, we consider it to be very, very important. We believe that it is necessary to prioritize savings in every area, from the state to the individual. We believe that our savings are the most important tool in eliminating the fragilities of our economy. The final title of the steps we will take in the financial sector will be the real sector. The turbulence we experienced in August affected our real sector and indirectly our banking sector. We will also take some steps in the real sector in order to ensure a healthier functioning of the financial sector. At the beginning of 2019, the BRSA implemented an arrangement for groups with a risk of 500 million or more. We are taking this one step forward. In the banking sector, companies with a total risk of 100 million TL or more will have to submit their financial statements that have been audited independently within 120 days of the fiscal year and a financial audit report including such elements as debt repayment capacity, liquidity risk, exchange rate risk and profitability. Otherwise, it will not receive additional credits from the sector.”

Another area of reform will be Agriculture. Albayrak said ” The details of the National Union in Agriculture project will be heard from the Ministry of Agriculture at the launch of the project. Another step to be taken at this point is the establishment of Sera AŞ. saying Albayrak and continued “Sera AŞ will be established with the partnership of the Agricultural Credit Cooperative in order to be a balancing element in the fresh fruit and vegetable market, which has an important place in the fight against inflation with seasonal fluctuations.  In 2019, 2 thousand hectares of technological greenhouses will be built in Sera AŞ. 5 thousand hectares of production area will be reached in the medium term and 25% of the greenhouse cultivation will be targeted in the long term. We will support the red meat price stability in line with the geographical realities of our country with the Ovine Livestock Action. When we consider the characteristics such as export capacity, domestic feed and compliance with geographical conditions, we are behind our potential in ovine livestock breeding. With the support to be provided in this case, our small sheep stock, which is 47 million, will be increased to 100 million within 4 years. Finally, in scope of marketplace law, aiming the increase of the producer cooperatives’ share in marketplace, we will maintain a competitive structure in field of wholesale, retail and logistics.”

Albayrak stated that one of the most important reforms that will be implemented in 2019 will be tax transformation and that they will reveal their details more clearly when the process is completed. Albayrak, “We will reduce the exemptions in our new tax architecture. We will gradually reduce the corporate tax and move it to a more competitive point. For a more equitable tax system, we will make taxation more effective by increasing according to the incomes. In particular, by extending the tax return, we will reduce the indirect taxes with the potential of income increases and increase the direct taxes so that the tax will be spread in the base even more.”

Minister Albayrak said that another reform area is “Judicial Reform” and that this reform package, which is prepared with a comprehensive participation, will be shared with the public by the Ministry of Justice with the “Judicial Reform Strategy Paper”. Emphasizing that the vision of the Judicial Reform will be “trustworthy and reachable justice system” Albayrak said, law and economics are two complementing disciplines to ensure economic welfare.

Albayrak also explained a plan in logistics sector. Prepared with a view of increasing Turkey’s logistical advantages and competitiveness resulting from the strategic location,accelerating social and economical development and making Turkey a regional logistics base in international trade, the Logisctic Master Plan will be made by related Ministry and Turkey Wealth Fund.  

Treasury and Finance Minister Berat Albayrak said another step is “Export Master Plan”. In terms of export, the plan which will be explained in august by Ministry of Commerce, defining short- medium and long term export potential, a sustainable strategy will be launched to increase Turkey’s exports. Albayrak said, Strategies will be established and steps will be taken to implement these strategies in order to increase the ratio of imports to export in a sustainable way.

Another step taken in order to increase and strengthen the production, Albayrak said, “With this programme, our Ministry of Industry will launch strategies like managing R&D, investment and export from one point, supporting demand-supply components, produce medium-high and high-tech products.” Stating that this programme also includes localizing 300 products will be shared with public in May, Albayrak said another big reform step is in the field of Tourism, ‘Tourism Master Plan’.

“Within the framework of this plan, the goal of tourism is to reach 70 million tourists and 70 million liras in 4 years by increasing the number of tourists and destination in tourism as well as the number of tourists and the income per tourist. Within the framework of this plan, the gastronomy, faith, culture, golf, winter and congress tourism will contribute to the diversity of tourism and tourism income.”

Albayrak said, “With all this transformation for the big and strong Turkey, we will realize an economic transformation by export-oriented, technology production, competitive, value added good production and completing infrastructure.”

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