Back in 2011, Turkish President Recep Tayyip Erdoğan announced his vision for the country, which included making Turkey one of the top ten economies of the world and a vital player in the international trade arena by 2023. The “2023 Vision” targeted significant improvements in economic activities, energy, health care, transportation, and democratic reforms. The AKP government set major economic goals such as reaching a GDP of $2.6 trillion and an average per capita income of $25,0000, boosting annual Turkish exports to $500 billion, and lowering the unemployment rate to 5%.

At the time, these goals seemed somewhat feasible, thanks to Turkey’s expanding textile, automotive, and transportation industries, along with an increase in foreign investments, enabling the country to achieve relatively higher annual economic growth rates. This prompted the Turkish government to invest over $90 billion in building bridges, roads, airports, and other transportation infrastructures, and until 2011, the expansionary monetary policy of the FED allowed the government to sustain its economic policies.

However, after 2011, the FED decided to change its policy and announced that a new approach was needed to stimulate the domestic economy to recover from the adverse conditions of the global financial crisis. The main reason behind this was that the Turkish economy used its financial resources in industries with low productivity, resulting in high inflation as the inflation rate reached 25% in 2018, the highest level in 15 years.

In response, the Turkish government implemented a strange economic policy, increasing imports with relatively lower prices. However, this meant local producers were losing market shares and being forced to decrease their production levels. In other words, the economic policies were not well-thought-out by the government, creating inertia in the economy.

Recently, President Erdoğan declared that he is still insistent on the 2023 vision, despite the unemployment rate recording almost 30% and inflation being nearly 35%, as the budget and the international trade deficit remain high. The private-public sector cooperation projects are also placing a significant burden on the budget, while the Turkish Central Bank continues to suffer from a large amount of deficit.

The Ministry of Public Finance and Economy and the Turkish Central Bank have thus revised the annual goals several times now, and the updated targets are much far away from the announced targets in 2011 for 2023. Considering that less than two years are left to reach 2023, it is highly unlikely that Turkey will reach its previous vision. The political conflict, faltering international relations, and the US prosecution of Halkbank are just a couple among a large number of ambiguous situations in the Turkish economy. Dealing with just these conflicts alone will take several years, meaning the 2023 vision will likely not be met on time.

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