During the first TSKB Development Day organized by Türkiye Sınai Kalkınma Bankası (TSKB), Lopez stated that significant steps have been taken in Turkey’s growth over the past 20 years.
Lopez highlighted that Turkey has achieved an average growth rate of 5.4% during this period and mentioned that an additional $18 billion in financing is expected to be provided to Turkey, aside from the current available funds of $17 billion.
Lopez emphasized, “We can discuss three main points. The first is growth, and without growth, there can be no development. We need to ensure growth first.” He continued:
“The second point is the social aspect of work and inclusivity. We must ensure that growth benefits all segments of society, not just a select few. The third point is sustainability; the sustainability aspect that will support what we call green growth. Over the past 26 years in Turkey, per capita national income has quadrupled. In real terms, we can say it has increased fourfold over the past 20 to 30 years. This success must be acknowledged. We need to ensure that the achievements of the last 20 to 25 years continue in the next 20 years. We need to build upon this progress. It is not easy for investments to flow into more efficient and productive sectors in a high inflation environment. It may not always be easy to predict which sector is the best.”
“INVESTMENTS NEED TO FLOW INTO SECTORS THAT WILL MAKE THE ECONOMY EFFICIENT AND EFFECTIVE”
Lopez pointed out that investments are currently being directed towards sectors that can protect themselves, and he reminded that, in order to achieve growth in the economy, investments must flow into sectors that will make the economy efficient and effective. He mentioned that there could be short-term challenges related to this, saying, “I’m not talking about a year or two, but looking ahead, at a certain point, the effects of inflation will decrease. We need to be patient regarding this.” He emphasized that productivity and efficiency are key aspects that should be evaluated over a longer-term horizon concerning growth, stating, “To be competitive in global markets, you need to produce more and at a lower cost with the same inputs, labor, and capital.”
Lopez highlighted that the factor of efficiency in Turkey has slightly declined over the past 10 years and stressed the importance of an energy transition strategy.
Recalling that many countries were discussing growth until recently, Lopez continued:
“On one hand, there has been an emphasis on climate change issues. It is possible to navigate this process together. While working towards growth, it is also possible to work on energy transition issues and to succeed. Spain has focused heavily on renewable energy, particularly solar and wind energy, in recent years. Currently, electricity prices in Spain are about 40% cheaper than in many northern European countries. This is due to an oversupply of energy during low peak times, which lasts approximately three hours in the morning. Therefore, the fall in electricity prices is not something one can readily explain as being good for consumers. Consequently, there are companies that shape their investments based on this. From an energy perspective, Turkey is one of the leading countries, with an electricity generation capacity of approximately 105,000 megawatts today.”
Lopez stated, “We have launched one of the world’s first green funds in Turkey,” and added:
“These funds will be allocated to companies that will bring changes in production engineering. Of course, development banks will support the increased use of solar panels. I am not only referring to the establishment of solar power plants, but also to rooftop solar power installations. We expect countries to act consistently. Coordination is important here. We want to promote collaboration between countries rather than polarization, and to enhance their capability to adapt to challenges. There is a strengthening of coherence happening in Turkey, and in this context, there have been some challenges associated with inflation in Turkey. However, in recent years, Turkey has increased its per capita national income.”
Lopez noted that as countries become wealthier, the agricultural sector’s significance in the economy declines while the shares of the service and industrial sectors increase.
He mentioned that while employment in Turkey has increased by around 10% over the past 10 years, the agricultural sector has seen a decrease of approximately 9%. He stated, “While we see an increase in the quality of labor and employment in the industry, manufacturing, and service sectors, we observe a decline in the agricultural sector.”
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
