Türkiye has recently unveiled its Medium-Term Program for 2024 – 2026, a document that outlines Türkiye’s targets for inflation, unemployment, and economic growth for the next two years. The program signals Türkiye’s ambitions in the rapidly evolving world order. The program’s focus on energy, climate change, and technology offers clear routes and indications in that sense.
Among the program’s primary goals is to reduce inflation without sacrificing growth. As such, the program recognises the need to reduce domestic demand, increase external demand and high-value exports, and become a strong trade partner to many countries. However, the road ahead is fraught with challenges, considering the lasting effects of the COVID-19 pandemic and the Ukraine War. Against this backdrop, the program grasps the economic constraints while offering pragmatic policy solutions.
A Stronger Role in International Trade
The erection of barriers in the name of national security increasingly characterises the current economic and trade landscape. For example, the US and the EU are increasingly wary of trading with China in vital sectors. Thus, many nations are moving toward trading with trusted allies in critical industries, giving rise to concepts like “friendshoring” and “de-risking.”
This shift presents Türkiye with a unique opportunity. Leveraging its geographic proximity to the EU, its skilled workforce, and its prowess in strategic industries, including defence, Türkiye can strengthen its trade ties with the EU and the United States.
To this end, the program explicitly highlights its intent to foster trade relations with the EU, a vital trade partner and the source of much of Türkiye’s trade-related legislation. These policies involve harmonising legislation and simplifying procedures. However, Türkiye’s focus on the EU does not neglect other trade partners. There is no mention of de-risking with China, nor is there any focus on trading with certain countries or barriers against others. The reason is that Türkiye recognises the role of commerce in development and aims to extend existing trade relations while exploring all opportunities through free trade agreements.
Türkiye also aspires to be self-sufficient. Several nations, including the United States, aims to secure vital raw materials and manufacture essential products such as electric cars and semiconductors locally. Türkiye’s program aligns with this global trend by supporting domestic production of semiconductors, electric cars, and batteries, making self-sufficiency in critical industries a pathway to success.
Securing Energy Supplies and Fighting Against Climate Change
Today’s economic realities, particularly Russia’s war on Ukraine, have once again proved the importance of energy resources. Accordingly, Türkiye’s program emphasises the need for self-sufficiency and efficiency in energy production, recognising that these steps can lower energy prices, inflation, and production costs. Lower production costs can increase profits, bringing Türkiye closer to its export and growth targets.
However, the search for energy security, fuelled by the war between Russia and Ukraine, is undermining the fight against climate change. The Turkish leadership is aware of this issue, highlighting measures such as the finalisation of the National Emission Trading System, upgrading the Green Deal Action Plan, and implementing new taxes to fight climate change. This way, Türkiye aims to protect the environment while ensuring energy security.
Taking important steps to combat climate change is important for maintaining trade relations with other countries. Many countries are relocating their supply chains to environmentally responsible partners. Türkiye outlines measures regarding the EU’s Carbon Border Adjustment Mechanism harmonisation process to align with these policies, maintaining a crucial trade position with the EU. These actions will enhance Türkiye’s competitiveness and market position.
Advancing in Tech, Digital Transformation, and Data Protection
The second key to success hinges on digital transformation and technological advancement. Countries strive to expand their capacities and advance in the tech sector. The Turkish decision-makers recognise this fact and aim to bolster local manufacturing and technological expertise. Thus, a specific strategy is outlined in the program to transfer technology from the defence industry to civilian technology sectors. Emphasis is also put on the manufacturing of semiconductors and electric cars.
Moreover, a large chunk of today’s trade is no longer physical but online. E-commerce now holds a pivotal role in commercial relations, with e-export emerging as a critical component of Türkiye’s path to success. Consequently, Türkiye has outlined comprehensive policies to bolster its digital infrastructure, reinforce payment and logistics systems, and address disruptions and unfair practices within digital markets.
Tech, digital markets, and data are intrinsically linked. International business operations will not happen smoothly without effective data management and respect for privacy rights. The EU statutes inform Türkiye’s data protection framework. However, there is still work to do to reach the protection level offered by EU regulations. Türkiye seeks to align its legislation with the EU’s to enable business with both the EU and the global community.
A Promising Blueprint
The Medium-Term Program for 2024 – 2026 is a blueprint for Türkiye’s future. It is a comprehensive plan that addresses the heightened roles of energy, the fight against climate change, tech, and data in trade relations. Therefore, if executed successfully, it will undoubtedly bolster Türkiye’s economic and political influence worldwide, positioning the nation as a prominent player in the global economy.