As I have mentioned before, with an amendment made to the Central Bank Law in 2001, the primary objective of the Bank was set as achieving price stability and the Bank was granted the direct authority to draw up monetary policy and choose monetary policy instruments at its own discretion in order to achieve price stability. Achieving central bank independence is in fact a very important structural reform in the economy, but unfortunately merely passing the law is not enough in itself for its success. Therefore, the real challenge is to make sure that every section of the public is aware of the rationale behind independence and to create a common understanding of these reforms before their success can be realized. Although we have observed significant progress pertaining to independence, we are aware of the fact that there is still a long way to go and we know that there will always be room for improvement. . The criteria set by the European Central Banking System regarding central bank independence will be provide significant guidelines in this field. Another important point I would like to mention is that the more independent central banks are, the more transparent they become. Central banks share more information with the public about the design and implementation of policies and they attach great importance to having an efficient communication policy. Now let me draw your attention to central bank accountability and further consider the transparency issue. The provision of independence obliges central banks to explain themselves to the public.
In market economies, the aggregates that can be controlled by authorities are set as targets while designing the policies. In our country, under the current economic conditions, these aggregates include consumer price inflation and the ratio of primary surplus to national income. Other variables, such as the growth rate, real interest rates, and producer price inflation are the outcomes in this sense and can only be forecasted. That is why I believe that the difference between the concepts of macroeconomic targets and forecasts should be taken into account in the opinions expressed. Direct foreign capital investments and competition As I have mentioned earlier, in order to achieve high rates of sustainable growth, the domestic savings gap should be offset by external resource inflow, namely, direct foreign capital investments. Historically speaking, it is clear that Turkey has displayed poor performance in attracting direct investments despite its large domestic market, proximity to developing-strategic markets owing to its geographical position, developed infrastructure and young population. As a matter of fact, net direct foreign capital investments to Turkey in the 1995-2000 period amounted to US dollar 1 billion on average. This corresponds to only 4 per thousand / 4 %0 of Turkey’s GDP. The developments of the following years do not point to a lasting improvement in Turkey’s performance in this sense either.