An increase in project approvals by the World Bank for Türkiye indicates that confidence in the country's economic policies has strengthened, according to a statement of a senior economist with the lender on Sunday.
Speaking to Anadolu Agency (AA), Sibel Kulaksız, senior economist at the World Bank Group, evaluated the bank's approval of $910 million in financing to support Türkiye's efforts to expand electric railway transportation and improve preparedness and management capacity for public health emergencies.
She emphasized that the bank does not see such projects only from an engineering perspective but with a multifaceted approach.
Kulaksız noted that many individuals with expertise in different fields, such as engineers, economists and social scientists, are involved in the projects at the World Bank.
She highlighted that each unit focuses comprehensively on how it can contribute more to the projects in its field and how to improve the welfare of the people living in the regions where the projects are approved.
Kulaksız stressed the importance of the Railway Development Project, saying, "This is a project that will benefit not only Türkiye but also other surrounding countries."
"The increase in project approvals by the World Bank for Türkiye indicates that confidence in economic policies has strengthened. The newly approved financing is an example of this. There will be some more projects in the coming period," she said.
The World Bank Group on Dec. 5 said it approved $660 million in financing to support Türkiye’s efforts to expand electric rail transportation, which it said would help improve the efficient movement of goods across the country, boost exports, create jobs and reduce greenhouse gas emissions.
"The Eastern Türkiye Middle Corridor Railway Development Project will help expand and modernize one of the oldest and outdated sections of Türkiye’s existing limited rail network," the bank said in a statement.
"It will replace diesel-powered trains and expand connectivity between Divriği, in Sivas province, and Kars, near the border with Georgia in the country’s northeast via a 660-kilometer (410-mile), fully electrified and modern railway line," it added.
Mentioning that Donald Trump, the incoming 47th president of the United States, is focusing more on trade policies, Kulaksız expressed expectations that during discussions between Türkiye and the U.S., the potential areas of cooperation between the two countries would be evaluated.
Recalling Türkiye's ambitious trade target with the U.S., she further said: "For Trump, an economy based more on agreements is crucial. In other words, we believe that it will be positive when we sit down with our leaders at the table and reach an agreement on sectors that will be beneficial to both countries and parties."
Türkiye-U.S. trade
"He looks at events from a businessperson's perspective," she said, referring to Trump.
"There will be sectors vacated by China. He will look at how other countries can benefit from filling these gaps. Especially in Türkiye-U.S. trade, there is a very big target. Many institutions are currently working quickly to reach it," she noted.
Furthermore, she said that when looking at trade figures as the World Bank "we see that the export and import figures between Türkiye and the U.S. have grown rapidly over the last 40 years, but the same products remain in the subcategories."
"Even the order of products in both exports and imports has not changed," she added.
"This shows us that Türkiye is specializing in the products it exports to the U.S. rather than diversifying. Is this a bad thing? No. This means we are doing what we do even better and becoming more competitive. We have traditional sectors that export and these figures show how successful they are," Kulaksız pointed out.
"However, new sectors are emerging. If we want to see Türkiye in the higher income group, we need to produce and export high-value products," she affirmed.
Moreover, the economist drew attention to the easing of tight monetary policy globally, with interest rate cuts gradually being seen in all countries.
She mentioned that prolonged tight monetary policies have had a negative effect on economic growth, stating, "With interest rate cuts, we have entered a period where investments will increase globally, and economic growth will be seen. We hope that the flow of foreign capital to Türkiye will accelerate, from a completely global perspective."
"This is a good expectation for us. Even in the slowest times, we saw around 3% growth. This country has seen 8% growth before, which is quite fast," she added.
'Economic growth hub'
While evaluating the global situation and when looking at growth while other countries have seen 1% or even negative growth, seeing 3% growth in Türkiye is "a very good picture," according to Kulaksız.
The economic growth in Türkiye has been tempered in the last two quarters amid a long period of tight monetary policy but officials have often reiterated the aim of achieving sustainable high growth, highlighting however also the need to lower inflation.
Kulaksız emphasized that Türkiye is a strong country in every aspect of the economy, but its full potential has not yet been fully utilized.
She concluded by stating that if this potential is effectively harnessed, Türkiye can reach the group of high-income countries.
"When we look at the numbers, we see that Türkiye has the potential to be the economic growth hub in its region," she said.
"Because we have human capital, our workforce, and the potential to develop alongside other countries. Economic literature shows us that if you grow together with other countries, you will reach much higher growth than you would alone and become a natural leader for countries with smaller economies. Because you also contribute to their development," she pointed out.