New roadmap for the economy and tourism


Turkey has entered an economic crisis period that doesn’t look anything like the crises that have come before, but government and economic managers, those responsible for it, do not accept or name it.

News came out that President Recep Tayyip Erdogan exemplified China to AK Party officials at the party’s Central Executive Committee (MYK) meeting, telling them of China’s growth and Turkey’s comparative advantages because of its geographic proximity to the market. He used this to explain the economic roadmap for the new period.

The current situations in China and Turkey, which is ruled by AK Party, can’t be compared in terms of economic size and economic policy choices by the country’s management.

China came to its point of success with a 20-year strategy. But Erdogan says he can achieve this in six months. Plus, China has adopted nationalization policies, while Turkey has adopted privatization policies since President Turgut Ozal’s term.

On the day when Erdogan said this, he signed a TRY 1.7bn privatization deal, adding to the TRY 80bn in privatization he has initiated during his reign. This is enough alone to explain the difference between China and Turkey.

Apart from all this, let’s look at the policy that will be pursued for the economy, described as ‘the new roadmap’ and based on exports.

These statements have been widely reported in the foreign press as well. The details of these statements were comprehensively analyzed and published by Wall Street Journal (WSJ).

The rebound in tourism and growing exports provide support to the economy as a whole, which could prevent full-blown economic crisis for now, according to the analysis. That’s right. However, to overcome the crisis by meeting the current account deficit with the support of foreign exchange (FX) inflow, tourism may play a more important role than exports, which the party in power says form the basis of the new model.

An import-export ratio of 40%-80% should be reached by all sectors. Since a part of FX revenues earned from exports are used for imports, the net inflow to the Treasury from this revenue will remain low.

Unlike exports, more than 90% of revenues earned from tourism provides a net inflow to the Treasury. Tourism revenues are the FX earnings that have the highest net inflow to the Treasury.

Tourism is an in-situ export that doesn’t require high expenditures, unlike intermediate goods, raw materials, and freight. In this sense, tourism will play an important role in this new period. But how will tourism perform this function? It’s necessary to look at a speech made by Hakan Ates, CEO of Denizbank, which provides the highest number of loans to the tourism sector. The bank also has close relationships with sector stakeholders, including with accommodations. Ates delivered a speech about tourism in Turkey and demanded four key items to support the sector at the 11th International Resort Congress. If the sector is to reach its goals of USD 30bn in tourism revenue, 32.3 million foreign tourists, USD 800 average expenditure per visitor, an average of 11-night accommodation, and USD 72.7 revenue per visitor, these four conditions need to be met, Ates said.

Turkey may tolerate crisis for a while with the support of tourism: WSJ

The U.S.-based finance and business-focused newspaper Wall Street Journal (WSJ) published a comprehensive analysis/assessment about the recent developments in the Turkish economy under the title of ‘Turkey’s Economic Turmoil Sends Desperation and Inflation Soaring ’. In this, they analyzed the current issues faced by all sectors in Turkey. While tourism and exports could help, they said, it is not a long-term solution.

“There are signs of Turkey’s financial institutions may be able to withstand the pressure for a while longer, while the rebound in tourism and growing exports provide support to the economy as a whole that could prevent, for now, a full-blown economic crisis,” the WSJ analysis read.

Istanbul and Antalya ranked among the top 100 destinations

The UK-based market research company Euromonitor International has announced its 2021 Top 100 City Destinations. The Turkish cities of Istanbul and Antalya made the list, which is determined based on factors including the cities’ economic and commercial performances, tourism performance, tourism infrastructure, tourism policy and attraction, health and security, and sustainability. Istanbul ranked 20th and Antalya ranked 52nd on the list. Paris, the capital of France, was placed at the top of the list and Egypt’s Sharm el-Sheikh took 100th place.

Istanbul’s tourism performance corresponded to half of the city average on the index, while Antalya’s tourism performance nearly doubled its score. Eight of the top 10 cities were in Europe.

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