Recently, Turkish economist Neshat Gundogdu visited Azerbaijan. They say that the guest will be happy. We also hoped for a share from this guest and invited him to our editorial office. Thankfully, the scientist, who did not take our word for it, spoke to Publika.az over tea. We received the “share” we were hoping for one by one during the conversation. Come on, take your “share” of the economist’s valuable ideas.
Nothing but Azerbaijani food has been found in Turkey
Our interviewer did not give a very encouraging answer to the first question. The economist said that he did not come across Azerbaijani products and brands in Turkey: “I am not the user that capitalism wants. That’s why I don’t know the market. That’s why I don’t know anything about it. In general, goods with the Azerbaijani brand have not touched my life. Maybe there are people who use these products, if there were more of them. or if it was known, I would definitely see it. If there are such products, it would definitely be appropriate to strengthen them. Some foods specific to Azerbaijan are popular in Turkey. When they come, they say “buy this” and “buy that”. Unfortunately, I have not heard anything about food. If “If I don’t know, if it hasn’t touched my life, I hope I will come across it. There should be an increase from this point of view. If not, we need to work on it, and if there is, we need to expand the sale of that product.”
“Scissors method” was used
As we know, Turkish President Recep Tayyip Erdogan made changes in many ministries after the elections. We asked our guest to find out how these changes will affect the Turkish lira and the financial and monetary policy of Turkey. He commented on the reforms carried out as follows: “The Minister of Treasury and Finance, Mehmet Simşek, and the Chairman of the Central Bank, Hafize Gaye Erkan, are new personnel. President Erdogan made many statements in this regard. In one of his statements, he stated that we will become an administration that will be accepted by international markets. It is a pity. that in the last 5, even in the last 6-7 years, Turkey has faced heavy economic losses after the July 15 coup attempt. After that, the constitutional change created the impression that some democratic values in Turkey are being questioned. Considering that most of the world’s investments come to Turkey, especially from the West, this it was an important situation. We began to see that investments in Turkey were decreasing. Few dollars came to the country. Turkey is a country with a current account deficit. This means that exports are less than imports. Therefore, the scissors method was used. With these scissors, you have to bring hot money into the country through finance. .In general, risk tolerance planning is not a proper method.It is a temporary method. The right way is to ensure more exports and less imports. For this, it is necessary to develop and research the technology and the brand.
It is necessary to move away from high costs that harm production and use cheaper products. Failure to do so results in a current account deficit. To close this deficit, it is necessary to borrow money from countries with excess capital. There are large funds in the West, such as insurance, fund, and pension funds. People must first work for an efficient economy. It is necessary to get away from the habit of waste.
Eastern society has a wasteful culture, they consume excessively. This is the way that the states also encourage, they want society to grow through consumption. Because society cannot develop through science and education. Instead, he wants the country to grow through consumption and the economy to grow with it. It is not efficient, Western society does not do it at all. Instead, it tries to build an efficient economy. This brings the Turkish states and other societies to a higher level in the economic field. Another name for this is unnecessary competition. Turkey’s consumption-oriented economic model is similar in England and America, but America has spare money. When there is a current account deficit, it prints money and almost never causes inflation. Of course, over the past decade, inflation has arisen as a result of excessive money printing. There is also a monetary base of England. So why do we use such a method? This needs to be changed. For a more efficient economy, it is necessary to produce and market the most suitable product with available resources, away from the culture of waste. We need to create our own market and ecosystem as much as possible. It is not easy to do this, but it is obvious that there is a need to make efforts in this direction. I believe that there can be a success story in this regard.”
People will pay for it
Continuing his opinion on the subject, Neşat Gundogdu said that Turkey implemented it with a very bad model: “It devalued its currency, called it the “Chinese model.” . This also resulted from political choices. Unfortunately, many economists said that it should not be done, but they did not listen. It is very important for democracy to work properly. If it does not work properly, it will be stolen from the future of society. We have come from the time when the dollar was 2-3 lira to 30 lira. That is In the coming years, people will pay for the 10-fold depreciation of the lira due to the lack of proper policies.
There have been many criticisms against them, but these criticisms should be viewed from a realistic perspective. Statements such as “the Western world is in front of us”, “the world is against us”, “the world wants to overthrow us” are far from reality and create a situation that no one believes. Turkey has these problems. There is a deep-rooted democracy in Turkey, but democracy has not been fully adopted by the society.
That is, the future of the Turkish states and the Turkish Republic needs greater democracy, but there is a very fine line here. More democracy, not the colorful games of Soros, the country moving away from its values, someone defeating someone else with political maneuvers. More democracy means creating an environment of freedom that will enhance the well-being of the people. We must not fall apart here. The West can sometimes engage in cunning games under the name of democracy. That’s why we need to bring to us the democracy they live, not the democracy they see as suitable for us. This is not an easy task. They have reached this point through 300 years of war. We have not experienced the process of war culture. For example, Azerbaijan dealt with the problem called “Russian bear” for many years. Therefore, I know that this is not an easy task, but we have a goal, and we must try as much as possible for it.”
Everyone has a phone in their pocket, not a gun
Emphasizing that Turkey’s economy offers cheap labor to the world, the economist said that the way for Turkey to reach the $10,000 level is to develop the construction sector and sell it to the world. is different. Technology is needed to approach this figure. High technology must be produced. Turkey has done it, produced an electric car called “Tog”. The impact of that car on the economy will be in 15-20 years. Besides, Turkey has started to produce some of its own electric trains. . It does not export yet because there is a demand for its own use. As soon as it starts exporting, it will start bringing income. However, they will not bring a lot of income. For example, drones like “Bayraktar”, which is said to have played an important role in Turkey’s recent victory over Azerbaijan in Karabakh, are important technologies, but they do not bring money. Currently, mobile phones are developing the economy. Everyone has a phone in their pocket, not a gun. Everyone has a computer, a smart watch. It is necessary to be able to produce such products. But this market is so strong that… there are many big brands in America. They do very high-tech work and those brands have gained enough trust.
On the other hand, there are very powerful chip manufacturers. Chip companies in Taiwan, Vietnam and Singapore have become brands for years. These companies manufacture the processors of all phones. It is very difficult to break into such an established market. I don’t know what to do, but you need to enter this market. The first mover into the industry and the first to introduce the product will dominate the industry. This is called “dominant power in the industry”.
If we want more income, we need to increase the number of educated people in the country. For this, it is necessary to put forward serious programs. Not everyone can be a scientist or develop. But you will try to keep the average level of society as high as possible so that you can be a developing country. The way to become a developing country is to provide education and merit system properly. It is necessary to ensure that the trainee remains in the correct positions. In societies where the state is strong, the issue of dignity is very important. The West had a hard time overcoming this issue. Europe has many democratic mechanisms and can only survive in this way. In the vast majority of developing countries, the state is the most important shareholder of the economy. There is no economy without the state. It is necessary to transform it and move to a liberal economy. The problem here is that if you move too quickly to a liberal economy, companies that already have huge resources abroad will suddenly invade your country. For example, they will buy your most important institutions, companies. This policy should be so balanced that it moves the country forward slowly and steadily, and is directed towards the goal of freedom. Today, a state can reach such a point in 30-40 years, but not in 5 years. For example, for the Turkic world, Turkey may be closer to this goal, but other Turkic states are a little further away. Turkey may reach such a limit after 10-15 years. And Azerbaijan after 30-40 years. It is impossible to create a union between Azerbaijan and Turkey, where inflation is 60 percent on one side and 10 percent on the other. It is necessary to bring the percentage to the equivalent level.
This will bring the idea of TURAN closer
Expressing that the relations between Turkey and Azerbaijan have continued from the past to the present, our guest said that these economic relations between the two countries have further developed with the Baku-Tbilisi-Ceyhan pipeline and railway: “The recent meeting of President Ilham Aliyev and President Erdogan in Nakhchivan is an indication of the next stages. After there is peace between Armenia and Azerbaijan, a new trade route will be created in the Zangezur Corridor. This road will not be under the control of Georgia and Russia. It will become the most reliable corridor connecting the Turkic states directly. The transportation of goods and people will become easier in the coming period. Also, both oil and It is planned to have a natural gas pipeline as well. Along with this, it is planned to have a road and a railway line. If there is a high-speed train, it will be the most magnificent corridor connecting the Turkish states. This road will give a great boost to tourism. Through tourism, it will create a foundation for Turkish states to get to know each other. . This means great added value from an economic point of view, but more importantly, mutual relations will increase. We will get to know each other more, we will start doing more business with each other. Our relationship will improve and we will be closer to the idea of Turan, which is in all of us.
In this respect, Azerbaijan is at a more stable point than Turkey
In his conversation with us, the Turkish guest said that “currently the oil sector is in the forefront between the two countries” and noted that construction workers from his country come to Azerbaijan: “Oil, oil products and natural gas go directly from Azerbaijan to Turkey. Thus, the current volume actually exceeds the current limits within the maximum level. There is a chance and a way for it to develop further. The two countries should sit and discuss. They should reveal each other’s shortcomings and look at each other. Both should support each other. States, money, economy are different. At present, very serious money in Turkey crisis, high interest rates and inflation, but Azerbaijan is at a more stable point from this point of view. That is, to establish those relations, you need to be on an almost equal economic path. Otherwise, you must use reserve money. An example of this is the dollar. You put reserve currency and so on. Once currencies are operational, trade between two states always involves the interests of a third party, regardless of the field. As long as we have to buy dollars, Azerbaijan should buy other resources for the tenders it can do with dollars. Turkey is forced to borrow more dollars. Turkey and Azerbaijan should trade with their own currencies or, if possible, with another reserve currency determined by the Organization of Turkic States. If such a foundation is created, that is, a foundation that tolerates the loss of money is created, then Azerbaijan will be in many areas where Turkey can work. Currently, these areas have not progressed much beyond oil, natural gas, processed products and the contracting sector.
There are many lessons for its rivals to learn from Turkey
Calling the tourism potential of Baku excellent, our interlocutor pointed out that Turkey attracts tourists through sea, sand and cultural tourism. In sea tourism, Greece, Spain and recently Egypt have become rivals to Turkey. Currently, Egypt has become a threat to Turkey as a cheap holiday destination. But these 3 competing countries have many lessons to learn from Turkey. Turkey is very good in the service sector, which means that our people pay great attention to the satisfaction of our guests and tourists. Customer-oriented satisfaction of the service sector is at the forefront. In Spain and Greece, these indicators are very weak. The quality of infrastructure and hotels in Egypt cannot reach Turkey. That is why Turkey has its own uniqueness. This results in a tourism income that Turkey plans to gradually increase in the coming period. We are talking about an income of 60 billion dollars for this year, 70 billion dollars for next year, and 80 billion dollars for the following year. This is twice more than the current oil revenues of Azerbaijan. That’s why they say that tourism in Turkey is truly an “industry without a chimney”.
As for Baku, as I mentioned earlier, the potential is huge. The people are very good, the service sector is of course lower compared to Turkey, but it has a history. It is also open to sea tourism. There is an opportunity, but it needs to be developed and invested. The most important problem of Baku is that it can be accepted by the Turkish states, that is, it can become a destination there. All these Turkic states need to explain the Zangezur corridor to the Organization of Turkic States. First of all, you need to learn the nearby geography so that your goals increase. Relations between Azerbaijan and Iran have always remained at a certain level of control. But, for example, when more balanced relations are established between Iran and Azerbaijan, most of the future tourism potential of Azerbaijan can come from Iran. I think that the realization of the Zangezur corridor, especially the high-speed train, will be very useful for the history of Azerbaijan. Along with Baku, Azerbaijan has a very beautiful nature. It has beautiful greenery, mountains and meadows. It is very suitable for nature sports called trekking. Azerbaijan uses more than half of its tourism potential. For this, serious plans should be made and resources should be allocated. 1 million tourists come to Azerbaijan every year. There is a chance to increase this number by 3-4 times, maybe even more. Tourists from every country are different. There are those who don’t want to leave the room, and there are those who want to walk all day. For example, people with high incomes in Turkey, that is, Englishmen and Germans, prefer Mugla and Aydın. The Russians are coming to the shores of the Mediterranean Sea. For the development of tourism, it is necessary to fill the country with a high-speed train.
Turkey is a very mountainous region. The last time I talked about this with the Minister of Transport of Turkey. For example, the Black Sea region is very lacking in tourism. There is a need for a railway. The answer to my question was: Do you want to build a train line there?
“The mountainous nature of the Black Sea makes it difficult to build railways there. But still we made a plan. The cost of the implementation of the plan we are working on is 21 billion dollars.
Now let’s look at the other side of the issue. Will we be able to take 21 billion dollars from the tourism of that region? Of course not. When you make such an investment, you can take the income even after 100 years. Now there are inevitably investment advantages in countries with such a lack of resources and an inadequate economy. Current high-speed rail projects are mainly supported by financial resources provided by the beltway project. So, without those resources, perhaps those high-speed trains and rail renewal would not have happened. The same situation exists in Azerbaijan. But you can use the high-speed train in half of the country. More trains mean more domestic tourism. Maybe it can be strengthened even more with joint projects. Flights are already being prepared in Turkey. There is such a factory. But what they have prepared is for Turkey itself. Perhaps this can be achieved by working together with Azerbaijan and providing additional support. Again, it all comes down to money. The reason why we cannot do this and come together is because of political and other regional problems. We need to resolve these as soon as possible. We need to bring our economies closer together and stabilize as soon as possible so that we can make longer-term investments. Otherwise, we will always remain in such short-term investments.”
A common market should be established
Our interlocutor continued his conversation and added that both countries have shortcomings, for which they should come to the same table: “First, a common market should be established. A project should be developed and properly presented to the market. China has taken over almost the entire market. Like in Europe , Azerbaijan’s production value should be kept at the same level as whatever comes from China or abroad, so that there is a choice in the market. The only solution is to increase technology. The way to achieve this is through freedom. The way to achieve this is for people to continuously engage in research and development. The interest of society It is very important here. Unfortunately, I don’t see a mass of people interested in science either in Azerbaijan or Turkey. The vast majority of the mass is busy consuming the values produced by the West. Television, Internet, social media have become people’s lifestyles. In fact, we have no time to spend on them. The world we should think about things that will improve and improve ourselves. These are really tough jobs and young people are very ignorant about this issue. In fact, they are not aware that they are culturally exploited.”
When we try to fix something, we break something else
In the continuation of his comment, N. Gundogdu emphasized that inflation is the result of the deterioration of the balance of demand as a result of the increase in the price of products that cannot be produced under market conditions: “The price of all food products in the country is rising. First, you need to expand the infrastructure, and all of this should be within the plan. Develop greenhouses, pastures, encourage animal husbandry. it is necessary to do and go with such a model. Unfortunately, Europeans and Americans prepare very long-term programs and pay a lot of attention to multifaceted economic programs. They try to think comprehensively. And our program, plan is for the coming years. While trying to fix one thing, we break another thing. The population there are a number of reasons why the prices of fruits and vegetables, meat, and other foods, which it buys the most, are increasing. There is a huge burden on agriculture here. For example, Turkey has made great progress in greenhouse farming. For example, a kilo of tomatoes here varies from 1-3 manats in summer, and 6- It is 10 manats. This is not the case in Turkey. If it is 3 manats in summer, it is 4-5 manats in winter. The price increase is not much. The reason for this is the development of greenhouses.
Animal husbandry is completely related to grazing areas. Hotels and catering facilities cannot be built in those places. Conditions should be created for the territories to engage in animal husbandry only. Unfortunately, animal husbandry in Turkey is developing in the wrong direction. For example, we have large pastures in places like Erzurum, Kars, Trabzon, Riza. Cattle can thrive in those areas. But what did we do? We reduced the number of cattle in those areas. We started to develop in other parts of the country. We also use ready-made feeds. Ready-made feeds are both expensive and have different effects on the animal. Beef is widely used in Azerbaijan and Turkey. But our geography is not enough for the development of cattle. Our countries are suitable for the production of small cattle, but the society’s demand is for beef. So, it is necessary to meet the needs of the society. The solution of this is in the hands of the state. In other words, ingredients must be prepared to make sheep and goat meat attractive. If you can’t change the geography, you have to change the desires of the masses. We don’t have dollars anyway, and we pay for the grass that God has grown on the mountain. Countries do not take these issues seriously. At the end of the day, when inflation occurs, they ignore it by saying, “It’s America’s and the West’s game.”
