Deputy PM babacan reaffirms guarded economic policies

Deputy Prime Minister Ali Babacan reaffirmed on Saturday that despite the fact that there have been some expectations from certain sectors for the government and the central bank to loosen strict policies, the government would continue with its careful economic policies. Speaking to participants following a dinner hosted in Kastamonu, he noted that "today is the day to be cautious and well advised" and explained that if the successes that have been achieved in the last 10 years slow down as a result of such demands, the consequences would be heavier. Babacan underlined that if the country is better prepared for the difficult scenarios ahead, any consequences would affect the country's economy to a lesser extent. He commented: "Our economy grew by 9.2 percent in 2010 and 8.5 percent in 2011. We have created 3.9 million new jobs since the period when the global financial crisis was at its deepest while the unemployment rate heightens in many countries such as Spain. We should value what we have and remain guarded." Babacan stated that in 2011 Turks spent more than they earned but the government was taking measures to stop unnecessary spending to keep growth at about 4 percent in 2012. He said, "Yes, prosperity is increasing in Turkey but if people continue to take on debts, this will damage the reliability of the government," and recommended that people only spend as much as they have. He continued by explaining that in the last six months, problems have begun manifesting in developing countries as well and gave examples such as the declining growth forecast in China, the almost nonexistent economic growth in Brazil and the fall of the Indian currency against the dollar to one of the lowest levels in history in addition to a serious current account deficit (CAD) in the country. However, Babacan underlined that by following the right policies and by taking the appropriate measures, Turkey was not afraid to face any difficulties even under such circumstances in the global economy. The deputy prime minister mentioned that people had been requesting investments in many regions of the country and said that the government was working hard to meet these demands while keeping the budget balanced. In addition, whenever Turkish government officials pay a visit to countries in Africa, the Balkans and in Central Asia, Babacan said they receive a list stating those countries' needs. "In 2002, Turkey was on the list of countries that received foreign aid. However currently, we are one of the countries that others request help from. We gave out a total of $1.3 million in aid in 2011 and have so far contributed to development projects in 37 countries. We will continue to help as much as we can while contributing to development in these countries to help with their social, political and economical reforms. While many European countries have decreased the number of embassies in Africa, we are working towards increasing the number of our embassies from 12 to 34 by next year," Babacan said. Stating that the reforms that Turkey has experienced have set a great example for developing countries as well as for those who are experiencing economic distress now, Babacan stressed that Greece, which has received 240 billion euros in aid, has still not recovered despite all the aid. Pointing out that stagnancy caused by prosperity and perhaps some laziness have resulted in these countries facing difficult situations, he commented: "Being a member of the European Union has brought excessive confidence in thinking that membership resolves all problems. But the troubles have affected not only the EU but also the global economy as well. Our counterparts in many countries are very nervous due to the problems in Europe." He concluded his speech by emphasizing that the government has been working on different scenarios on what could happen in Europe and the world and is generating solutions for the future.