Since the 1980s, Türkiye has been making large-scale privatization programs in order to fasten the economical growth while reducing the failings in the public sector. With these intentions, a transfer was made from state-owned businesses to the private sectors, which brought immense changes in several different areas.
It was even declared by the diplomats of the main opposition party of Türkiye, the Republican People’s Party, that from 2002 until 2018 207 companies out of 278 were privatized by the government. This has become a controversial topic with the fact that there are only 71 businesses left to the government itself and since the government gave up on their production, this problem became one of the most important reasons of the economical crisis Türkiye is experiencing. Moreover, considering the fact that the government gave great importance to several investments regarding making factories that focused on sugar, iron, paper, tea, electricity, coal production in the first years of the Turkish Republic; Türkiye entering a privatization policy affected many ineradicable companies.
Privatization mainly aims to reduce the share of the public sector and thus allocate the resources to goods and services to be produced by the private sector. In this way, it is aimed for the resources to be used more efficiently in the economy, production increased and growth accelerated.
To give out some examples, some of these privatized companies include Türk Telekom, TÜPRAŞ, ASELSAN, Sümerbank and more. Since all of these companies are influential in the Turkish economy and its economical status, them being privatized has also led to greater changes. For example, Türk Telekom was privatized in 2005 and as it plays a really important role in the telecommunication sector, it has led to severe economical impacts. Furthermore, large industrial enterprises such as Petkim, Turkish Petroleum Refineries Inc. (TÜPRAŞ) also affected Türkiye in a similar way.
First of all, privately managed companies have generally become more efficient. For example, the privatization of Turk Telekom led to significant improvements in the quality of service as well as technological infrastructure. With the more efficient usage of resources, the companies reached better status in the market as well as became more productive with the available sources. This led to a good usage of energy and eventually a save of money too.
Secondly, with the capitalization and capital market development as well as encouragement of the foreign capital, privatization has attracted significant investment, increasing the market depth.
Moreover, privatizations have generated significant revenues for the state budget, which have been used to reduce public debt. Investments, particularly in the telecommunications and energy sectors, have contributed to economic growth.
Despite all of the positive outcomes, when a social aspect is reached it can be seen that there have also been some layoffs and restructuring in the privatization process, which has had a negative impact on unemployment rates. Layoffs and restructuring can create significant stress on employees and their families. Other than this, looking from the economical perspective in some sectors where there is insufficient competition, prices have increased exponentially, creating a financial burden by creating extra costs on especially low-income-citizens as well as leading to a high inflation rate and an economical crisis. Generally, one can say that privatization led to price increases and that this increase will probably be higher in the continuing years due to the high inflation rate and problems regarding accessibility, once again a topic related to exorbitant pricing.
All in all, the privatization of companies in Türkiye came with some good, effective outcomes as well as some negative consequences to the citizens and the market. With these influential companies, a better economical status as well as a different state than we are in today might soon be seen, but since there are both good and bad sides to the change, time is the only thing that will reveal the long term effects.