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Carefully managed housing market key to Turkish economic success: Deputy PM

Last updated: Tuesday, March 19, 2013 12:22 PM
Ali Babacan, Deputy Prime Minister of Turkey (right) shares a convivial moment at JEF on Monday with Saleh Kamel Chairman of the Board, Jeddah Chamber of Commerce and Industry.

 

Saudi Gazette report

 

JEDDAH — Turkey’s Deputy Prime Minister Al-Babacan opened the proceedings of day two and final day of the Jeddah Economic Forum on Monday by sharing his nation’s experience in development.

He emphasized the importance of housing development on the macroeconomic health of the country and the positive effects of the sector being properly financed, clearly and effectively regulated and with a mix of low cost and public housing forming a substantial part of development.

This, he said, was the formula that had seen Turkey through the world economic downturn.

He said: “The mortgage system was carefully designed and both clearly and strongly regulated. This developed trust in the system and a resulting stability.”

He added that during the period when banks were failing in the West, “not one bank failed in Turkey.” Babacan felt it was of the utmost importance for governments to produce lasting solutions. It was, he admitted, difficult for countries to develop plans when steering from crisis to crisis.“This breeds a lack of confidence and with no confidence there can be no investment and without investment there can be no plans.”

Babacan noted it was policy to ensure the state was strong, “because than we have trust and financial stability. This in turn attracted private investments.” These factors were an essential part of Turkey’s growth, he said. That growth has been spectacular, he said, pointing out that in the 10 years since 2002, largely industrial exports had grown from $36 billion (SR135 million) to $153 billion (SR574 million) and in the last three years, internal employment had risen by 3.7 million.

No nation could develop successfully, said Babacan, without social policies that addressed the basic needs. “Therefore housing issues must be addressed early on,” he said, adding that with over 50 percent of the world’s population now living in urban areas, another 1 billion, or 40 percent of those living in rural areas, will be living in cities.

“Urbanization will be a key issue, for right now one third of the non-urbanized world, 1 billion people, lives in slums and over the next 30 years, if no action is taken, that figure will rise to 2 billion.”

 
   
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