Great savings for investment and production

Great savings for investment and production

Doğu Perinçek, Vatan Party Chairman, held a press conference on 14 May 2024 and evaluated the Turkish government’s ‘Savings and Efficiency Package in the Public Sector’. Perinçek also announced Vatan Party’s ‘Radical Solutions for Savings and Investment’. Perinçek stated the following:   

What is savings?

Savings are the values that a country allocates to investment from its total production in a year. Just as a farmer allocates a portion of the wheat he produces to seeds for next year’s planting, a country allocates a portion of its annual production to investment. Public saving is achieved through the state’s economic policies, tax, wage and salary policies. 

Savings, even when achieved from the income of the rich, are ultimately the confiscation of the value produced by the laborer. Therefore, savings are nothing but the surplus value, the value remaining after the resources necessary for the laborer’s survival are provided in the form of wages, salaries, social benefits, etc. 

All models of development are ultimately implemented and successful on the basis of a country’s ability to save.

State officials should live simply and share the people’s life

The “Savings and Efficiency Package in Public Sector” which was announced by the government is positive with its regulations aimed at preventing waste and luxury in state administration. The program of the Vatan Party envisages that state officials should live simply and share the life of the people, especially the difficulties they face today. 

Türkiye is entering a difficult period in the economy and security. Under these conditions, the state administrators’ living in luxury, splendor and extravagance weakens the ties between the state and the people, increases the weakness of the state and leads Türkiye to greater difficulties.

However, the Government’s “Savings and Efficiency Program in the Public Sector”, as presented to the public, lacks the features to overcome the economic difficulties we face with a breakthrough in investment and production.

Türkiye’s saving ability

Savings is the portion of the values produced by a country that is not consumed and, thus, allocated for investment. We include the phrase “allocated to investment” in the definition of savings. This is because, as the famous British economist Keynes proved, saving eventually equals investment.

The simplest example of saving is the farmer who does not consume a portion of the wheat he produces and allocates it to seed for next year’s production, in other words, to investment.

Domestic savings are the primary source of investment

In Türkiye, which today faces the necessity of a Production Revolution, our interest in savings is due to the fact that it is the only source of investment. Undoubtedly, foreign credits are also a source of investment, but since they will ultimately be repaid by domestic savings, there is no other source of investment than domestic savings.

Our position to begin the act of production with savings is the key to the program ahead. A country invests as much as it can save, involves more people in production activities and produces.

In the everyday language of the people, the concept of saving is mostly used in the sense of avoiding extravagance (wastefulness). Preventing wastefulness undoubtedly affects total savings. But the real problem lies in the intervention in distribution and property relations.

Saving, of course, ultimately means directing the values created by labor to investment. But the property and distribution relations in a country determine how much of the values created by labor belong to those who produce those values and how much to the owners of capital.

Raising the savings rate to 40 percent

As a result, tax, wage, salary conditions and policies determine the savings rate. Today, it is necessary to prepare and implement a development plan that will increase the savings rate from 30 percent to 40 percent with the “Plan, Savings, Investment, Production, Employment and Equitable Distribution for the Production Revolution” program. State resources should be allocated to public investment and private investors should be encouraged.

What we really want to get to

What we really want to come to is Türkiye’s ability to save. We would like to draw attention to the fact that this ability is considerable with a few figures.

1- It is also known by public authorities that 500 billion dollars belonging to Turkish citizens are deposited in foreign banks. Savings are made by confiscating the income of laborers. However, this saving is transformed into investment in Western countries. Imperialist capital invests the savings of our nation and earns interest income. This resource should be brought to Türkiye and transformed into investment capital as soon as possible, without giving the opportunity to the sanctions of the Western imperialists. Thus, we can provide jobs and a decent living condition for millions of people.

2- A few months ago, Vice President Cevdet Yılmaz mentioned the need to direct the gold worth 300 billion dollars stored in bank vaults to the investment market. However, this need was not mentioned again, probably because it touched a nerve. 4760 tons of gold should be converted into investment capital by its owners. Gold kept by citizens as savings or ornaments will be excluded from these measures.

3- The extraordinary interest income and profits of banks, especially foreign banks, are another indicator of Türkiye’s ability to save. It may be said that bank earnings are already invested. This is not the case; some of it goes abroad as foreign bank earnings. On the other hand, the private investments fueled by the credit system of banks and the utilization of tax revenues as public resources within the framework of the plan create very different results in terms of development policy.

4- The savings of our Turkish workers and businesspeople in foreign countries are, as a result, the product of the labor of Turkish citizens, and even if they are not considered as savings of the country, they can participate in the investment resources of Türkiye as savings of the laborers of Türkiye. For this purpose, necessary incentives should be provided for the conversion of the 300 billion Euro savings in Europe and America into investments in Türkiye.

5- It is also imperative that a decisive practice of austerity be adopted with regard to the measures to be taken for current expenditures in state organs. It has been reported that the government has taken certain measures against extravagance. However, it is important whether the resources obtained in this way will be channeled back to consumption or investment. In any case, the simple life and public service culture of the state administrators and high level officials will contribute to savings, investment and efficient management of the economy in the country.

6- By reorganizing the tax system and focusing on direct taxes, both income distribution can be regulated, and new resources can be created for public investment.

Intervention in property and distribution relations with the aim of a production revolution

If we take into account the figures given above, it is seen that Türkiye has a strong savings reserve. Instead of turning to foreign banks and countries, the only fundamental solution is to utilize the opportunity to transform these savings into investments by encouraging private interests. However, in order to achieve this, interventions in property and distribution relations in the public interest are necessary. Türkiye has the ability to save and invest. But it needs a government to implement it.

Türkiye’s economic difficulties and security problems are intertwined. We have prepared a National State Declaration showing the way out of these problems. Its slogan is ‘Strong State and Productive Nation’. Today, a Strong State is needed both for our security and to get out of the economic crisis.

Türkiye has now reached a stage where the Production Revolution is obligatory. Türkiye can get out of the economic and political crisis it is in only with a National Government of the Producers. Vatan Party will be the key party of that government with its program and cadres.

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June 2024