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Turkey’s Economy After July 15: Treasury Handed Over to Erdogan, Citizens Suffer Consequences!

TANER DEMİR*

The night of July 15, 2016, which President Tayyip Erdogan called “God’s grace,” still remains unresolved. However, even a newborn baby could feel the effects of the new economic order established in Turkey afterwards. The Erdogan government seized control of over a thousand companies. The Turkey Wealth Fund, with a capital of 30 billion dollars, was attached to the Presidency. The Central Bank’s 128 billion dollars were spent by the Erdogan family. With 52% of the population approving Erdogan’s actions in the last election, they now see that it’s their turn to bear the consequences. They go to sleep with price increases and wake up with price increases.

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After the July 15 coup attempt, President Erdogan, from the AKP party, transitioned to a new economic model. Massive companies such as Boydak Holding, Koza İpek Holding, and Naksan Holding were seized under the system named “Family Company-Party Economy” by economists.

The key to Turkey’s treasury was handed over to Erdogan. The Turkey Wealth Fund was established less than a month after the coup. President Tayyip Erdogan issued the 1st Presidential Decree to appoint himself as the Chairman of the Turkey Wealth Fund’s Board of Directors. With the same decree, Turkish Airlines, Borsa Istanbul, Ziraat Bank, Halkbank, PTT, TCDD, and other massive institutions were transferred to the Wealth Fund.

They spent 128 billion dollars of the people’s money. To control the capital in Turkey, Erdogan appointed his son-in-law, Berat Albayrak, as the Minister of Treasury and Finance on July 10, 2018. Later, on September 12, 2018, he made him the Deputy Chairman of the Turkey Wealth Fund, which managed 30 billion dollars. The presidency was held by Tayyip Erdogan himself. The 128 billion dollars of the Central Bank were spent during Berat Albayrak’s tenure.

Boydak and Koza İpek’s assets were plundered. During this period, 2,761 institutions were closed down, and receivers were appointed to take over nearly 1,000 companies. Opposition capital was transferred to the AKP. AKP member Nurettin Canikli admitted in the Turkish Grand National Assembly records that Boydak’s assets were emptied. It was revealed that Melih Gökçek’s son also had a stake in the Angel’s Peninsula Hotel, owned by Koza İpek Holding.

Domestic and foreign investors are taking their money out of Turkey. Erdogan’s moves, such as appointing his son-in-law Berat Albayrak as the Deputy Chairman of the Turkey Wealth Fund on September 12, 2018, frightened foreign investors. Foreign capital inflows, afraid of having their assets seized, slowed down. Direct foreign investment, which was $12.2 billion in 2016, fell to $5.6 billion in 2019. After Berat Albayrak resigned, stating “the hoofprints are mixed with the tracks,” the economy did not stabilize. Due to Erdogan’s policies of “one day interest rates will go down, the next day they will go up,” the wealthy in Turkey started transferring their money abroad.

The people became poorer, and per capita income dropped to $8,000. Due to the “Erdoganism” established after July 15, the citizens became poorer. The per capita income, which was $9,056 in 2016, dropped to $8,000. According to the World Bank, the number of poor people in Turkey exceeded 11 million. According to the Turkish Statistical Institute, 17 million citizens are in need of social assistance. Despite civil servant salaries reaching 22,000 liras and the minimum wage reaching 11,400 liras, the people cannot make ends meet because everything keeps getting more expensive. Owning a home or a car has become a dream. Due to the interest rates reaching 2.50%, citizens cannot get loans from banks.

The exchange rate of the dollar increased from 2.87 TL to 26 TL. On July 14, 2016, the exchange rate was 2.87 TL, but due to the wrong policies of the Palace administration, it reached record highs. With Berat Albayrak’s appointment, the exchange rate soared to historical levels due to shocks in 2018 and 2020. Despite the Central Bank spending 128 billion dollars, as of July 2021, the exchange rate is 8.70 TL for the dollar and 10.30 TL for the euro. After Berat Albayrak left and the Deposit Protection Fund system came into effect on the evening of December 20, 2021, the exchange rate dropped to 11 TL. However, within a year, it was understood that temporary solutions were not effective, and the dollar rose again to 18 TL. The exchange rate, which remained at 19 TL before the elections on May 14 and 28, 2023, jumped to 26 TL within two weeks after the elections.

The price of gasoline increased from 4 liras to 34 liras. After the collapse in all areas, the freedom of people to own cars was also affected. The price of gasoline, which was sold for 4 liras in May 2016, multiplied every year on the anniversary of July 15. It first reached 10 liras, then 20 liras. On the 7th anniversary of July 15, with the signing of the increased Special Consumption Tax (ÖTV) by Erdogan, the price of gasoline exceeded 34 liras per liter.

25 out of 100 young people are unemployed. Due to the policies following July 15, the Turkish economy entered into a crisis and left millions unemployed. Although the Turkish Statistical Institute tries to keep the unemployment rates low, as of July 2023, 25 out of 100 young people in Turkey are unemployed.

The people’s inflation skyrocketed. The Consumer Price Index, which had remained in single digits for years, rapidly increased with the Family Company management model. People could no longer afford to eat meat and chicken due to the skyrocketing prices in markets. The price of cheese exceeded 300 liras per kilogram, and ground beef reached 400 liras. According to TÜİK, inflation reached 30% as of July 2023. According to ENAG, which measures people’s inflation, inflation is over 120%.

High interest rates are crippling the people. The Central Bank policy rate, which was 9% before July 15, reached record highs. Due to the interest rates reaching as high as 24% in the Turkish-style presidential system, 21 liras out of every 100 liras paid in taxes by the citizens went to interest. As of July 2023, while Turkey ranks below Congo with a 15% interest rate, it is expected to reach 20% with the interest rate increase to be made this week.

They impose taxes to the sound of the July 15 prayer call. The citizens who are forced to work with credit card and loan interest rates are getting poorer every day. Who knows, maybe that’s why the people living in Turkey celebrate July 15 more quietly each year, compared to the previous year, without even knowing what they are celebrating. Are they celebrating the deaths of 251 citizens whose killers are still unknown? The question remains unanswered.

However, one question has a clear answer. The Palace regime did everything under the guise of July 15. AKP leader Erdogan is now imposing price increases with the July 15 prayer call. What did the A Haber presenter say? “Give the anthem.” Just like him, the AKP leader says, “Give the tax, impose the price increase.”

*TANER DEMIR is an economy analyst and a columnist for Bold Media.

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