Not long ago, probably the most respected financial official in the Turkish Government, who also happens to be a Deputy Prime Minister, cautioned a roomfull of the country’s biggest capitalist insiders against borrowing too much foreign money. In fact, he warned, legal limits on such borrowing were about to go into effect.
Whoa! Many investors thought. Is this a signal Turkey’s public and private debt was getting dangerously overscale? Currency markets had already hinted at that conclusion, effectively devaluing the Turkish lira by 5% in just the month of March alone. So was the minister warning, don’t take on debt that could be about to take on even more devaluation damage?
President Recep Tayyip Erdogan went nuts, seeing in his minister’s advice a double-affront, first, running down Turkey’s economic prospects and two, contradicting Turkey’s head of state R T Erdogan himself. “There is a great achievement in growth, and while we are talking [about it], they say other things, Erdogan said,. “I’d show respect, But if you can’t, you go your way, we go ours.”
The explosion leaked, something of a new phenomenon for Turkey’s tightly-restrained news media. The quotation was cited in newspapers, and on radio and TV and the internet. My way or highway, sez Boss.
Not a pretty picture.
Nor was this even more explicit expression of Presidential entitlement considered Presidential-quality, as repeated by Mustafa Sonmez in Al Monitor: “The president was incensed about the central bank’s December rate hike, which, he said, was announced while he was abroad and ignored his instructions for a cut.
“And they call this one-man rule,’ Erdogan was quoted as saying. ‘What kind of one-man rule is this? We make decisions but they are not implemented.’”
My idea of one man rule, he seemed to be saying, is, I make decisions and you shut up, even if my decision is wrong.
This formula, even when exposed to the public, can work — when things are going well, but the President’s clash with his Central Bank over interest rates is another sign that for the Turkish economy things are going very badly.
Erdogan wanted rates kept low to encourage people, and enable government, to spend. The bankers’ reaction was – Sorry Mr President, but more spending, especially more pre-election public spending, is just what Turkey cannot stand. Not when Moody’s just dropped the national credit rating to a lower rung of junk level, not when currency exchanges are already cutting the value of the lira, not when annual inflation looks likely to surge from 10 to 15% or higher.
Without cheap money, the government has only one way to make voters feel uplifted, military victory, as loudly claimed for Turkish Army troops in Northern Syria. But war is expensive, and President Erdogan’s invasion, certain to extend for months, likely to extend for years, could, like his now-sidelined public works projects and social service expansions, soon be unaffordable for a government going broke.
Before those bad things register with the Turkish public, before people feel the effects of shrinking government spending, and understand the costs of the war in Syria, before the value of the lira takes another plunge and the cost of butter and jam and bread and lamb leaps upward would be a much better time to hold a Presidential election than after.
So, just last week, Recep Tayyip Erdogan suddenly announced national elections, for President and a Parliament, will move from their scheduled date in November 2019 to June 24 of this year. The move gives the incumbent leader a lot of advantages, but it does rather reek of panic and instability, the very un-Presidential qualities which have, in recent weeks, been more and more on public display.
Pinar Tremblay is a columnist for Al-Monitor’s Turkey Pulse and a visiting scholar of political science at California State Polytechnic University, Pomona. She is a columnist for Turkish news outlet T24. Her articles have appeared in Time, New America, Hurriyet Daily News, Today’s Zaman, Star and Salom.