On the edge of the abyss

You don't need to be an economist to guess the catastrophe of the Turkish economic data of the last year, further accentuated by policies directly imposed by the presidency, which since 2018 has claimed total control over the Turkish Central Bank (meaning with three layoffs of governors and two of deputy governors, in less than 4 years), against the tide with respect to all the classic rules for containing an apparently irreversible and not only economic crisis. The Turkish lira has lost almost 20% of its value since the beginning of the year. These losses are strongly accentuated by the continuous reduction in interest rates, a maneuver aimed, according to the convictions of the President, to jugulate inflation, which in Turkey is one of the highest in the world, 19.6% in September, almost four times higher. medium-term objective set by the Central Bank. As if that weren't enough, at the end of October, the Financial Action Task Force (FATF) included the country in the list of nations lagging behind in the fight against money laundering and terrorist financing. This decision could have serious consequences for an economy that is already struggling to attract foreign investment. Being on the "gray" list means that the banking sector in the country in question is unreliable, putting investors at risk of illicit financing.

After all, the macro data speak for themselves, foreign direct investments fell to the lowest level, 5.7 billion dollars (about 4.8 billion euros) in 2020, against 19 billion 2007 dollars, when the Turkish economy was at its peak. With this economic framework as a backdrop, the country's symbolic city, Istanbul, continues unbridled urbanization as it prepares to swallow the last virgin spaces.

The surroundings of Lake Küçükçekmece, bordered by picnic areas, vegetable gardens and bucolic villages, are a snapshot of a disappearing city. The latest of President Tayyip Erdoğan's pharaonic projects, the Istanbul Canal, the most unreasonable, has already decreed its end. This 45-kilometer canal north-west of the city would open a new maritime route between the Sea of ​​Marmara and the Black Sea. The goal is to divert ship traffic from the Bosphorus Strait but also to create a new urbanized axis connected to the gigantic airport inaugurated. in 2018, with a new city of 1.5 million inhabitants. The canal and its concrete bed 300 meters wide and 20 meters deep will require the clearing of one billion m3 of earth, or 10,000 trucks per year for 4 years! A boon for the entrepreneurs in the construction sector who gravitate around the entourage of the presidential palace which, thanks to the more than 200 amendments to the law on the award of public contracts since 2008, have had the exclusivity of contracts without having to go through the calls for tenders.

But the rapid debt of the state towards the private sector, resulting from these large projects, will complete the economic beheading of the country. How do people live in this situation? On the verge of desperation that, despite the fear, begins to leak more and more into the public space. The most constant in recent months are the students who for weeks have held a garrison in the small square of the Mosque of Şişli, the central district of European Istanbul. They do not claim any political affiliation and expose a single message: "We cannot find accommodation", implied, in proportion to the financial resources or meager scholarships for those who have them.

Some have raised the alarm via social networks and the tamtam has also spread in a few hours to Ankara, Izmir, Diyarbakir and other provincial cities. The problem is not just the uncontrolled increase in rents, but general increases of all kinds: gas bills quadrupled, electricity and water costs doubled, up to basic necessities that have become luxury goods.

The timid street protests patchy (to avoid a brutal repression), for the moment have not had tangible effects, apart from a repeated government denial, seasoned with surreal reports of unspecified conspiracies. A "long Turkish winter" is expected.


Claudio Monge
NP December 2021