Infrastructure key for trade, enhances connectivity, says Simsek
Finance Minister Mehmet Simsek says Qatar, the United Arab Emirates, Türkiye and Iraq signed a deal on the Development Road project
Treasury and Finance Minister Mehmet Simsek said Türkiye invested heavily in infrastructure to enhance connectivity underlining that good infrastructure is key for development and trade.
Speaking at the Islamic Development Bank (IsDB) Group’s annual meeting and golden jubilee event in the Saudi capital, Riyadh, on Monday, Simsek said Qatar, the United Arab Emirates, Türkiye and Iraq have signed a deal on the Development Road project.
From Basra Port to London
He added that through the road project, “we are going to connect Basra Port to highways and railways, all the way to London.”
“Why start from Basra? Because I think one of the links of one of the possible missing connectivity was from Basra to Türkiye and Europe,” he stressed.
Mentioning the difficulties in Syria and other parts of the region, he said: “So you couldn’t consider another alternative. And it seems like it was a perfect match because we already have connectivity through Georgia, Azerbaijan, and Central Asia; there is a rail link.”
He underlined that trade is the engine for global growth and Türkiye’s growth.
Mentioning trade fragmentation or protectionism, he said these are significant headwinds.
“Türkiye has an advantage, because with fragmentation, friend-shoring and near-shoring are becoming new trends,” he noted, adding that Türkiye is probably one of the biggest beneficiaries of these new tracks.
Immediate neighborhoods
Highlighting that Türkiye is friends with the EU, which is one of the largest mature economies as a bloc, Simsek said the country also has very strong historic cultural trade ties with the Middle East and North Africa and is similarly friends with Central Asia.
“So, when you look at our immediate neighborhoods, which account for over 70% of Türkiye’s exports, our immediate neighborhood qualifies as friend and near,” he explained.
“We think we would benefit from trade fragmentation, which is undesirable,” he added.
Inflation
He mentioned Türkiye’s inflation agenda and said that to support disinflation, Türkiye put forward a credible fiscal framework.
“Last year, we front-loaded fiscal adjustment, so despite the earthquake, our fiscal position is improving,” he said, adding that the country’s debt-to-GDP ratio is about 29.5%, less than half of the global emerging market average.
So, restoring fiscal health, fiscal consolidation, and fiscal discipline are also this program’s key components.
He expressed that Türkiye also has a comprehensive structural reform agenda because monetary and fiscal policies may help it achieve the desired results.
“Our structural reform program is aimed at boosting productivity, enhancing competitiveness and therefore improving potential growth,” he underlined.
“We are at the early stages of this program, but it is working, and I think next year, this time, we should be in a position to talk about results,” he added.
Islamic Development Bank support
He said Türkiye is grateful for the Islamic Development Bank’s support and that the parties have just released a new country engagement framework, which includes financing up to $6.3 billion over the next three years.
“So we’re looking forward to strengthening, deepening, broadening our partnership” with the bank, he said.
He also said the bank is a great success story, with 50 years of outstanding service, helping reduce poverty, improve infrastructure, and development of member states.
He said Türkiye has received about $12.9 billion of financing from the bank.
“The Islamic Development Bank has been a great partner; it has helped the Turkish economy become more resilient,” he added.
Growing tourism
He said tourism is a significant sector for Türkiye, and last year Türkiye was the fourth-largest tourism destination in the world, after France, Spain, and the U.S.
He said Türkiye’s tourism journey began in the 1980s, but it has accelerated during the last two decades.
He added that the cities of Istanbul and Antalya were among the world’s top 10 tourism destinations.
According to Simsek, Türkiye and Saudi Arabia can cooperate in tourism because their seasons do not overlap.
“We have excellent human resources, entrepreneurs, and development capabilities. I know the Kingdom of Saudi Arabia has very ambitious tourism targets.
“So why don’t we support each other? We bring you tourists, help you develop the resorts, help you manage resources because our seasons are different, we can also provide human resource during your high season,” he noted.
Limited impact of conflicts
On the Ukraine and Gaza issues, he said so far, the impact of conflicts on the Turkish economy has been relatively limited.
He said that The Russia-Ukraine war had a significant impact on energy prices initially, which created a giant hole in the trade gap, adding that it was temporary.
“When it comes to the human tragedy in Gaza, the impact so far has been negligible,” he said, adding that Türkiye has a strong program and the Turkish economy is highly diversified.
He stressed that the impact usually comes as a risk premium, but the risk premium was contained because there was no escalation.
He added that as long as the conflicts do not escalate, they will likely have a negligible impact on the Turkish economy or the Turkish program.
Source: AA
