Erdoğan seeks new scapegoats for economic collapse
Turkish President Recep Tayyip Erdoğan has a chronic aversion to ever admitting responsibility for any failure in foreign and domestic policy, despite the fact that he has been running the country for 16 years.
With 24.52 percent inflation for September announced on Wednesday – a 6.3 percent rise since the previous month – the president has yet again employed one of his favoured tactics, passing the buck for the struggle against inflation and price hikes to local administrations and the municipal police.
Erdoğan had previously blamed the weak lira and high inflation on economic attacks by foreign powers. This time he is pinning the blame on the large increase in the price of goods that has accompanied a nearly 40 percent slide in the lira on “traitors, opportunists and stockpilers”, inviting people to inform on those they suspect of partaking in such nefarious pursuits.
The president called for patience from Turkish citizens and the business and manufacturing communities at a parliamentary meeting on Tuesday, saying the current economic woes, which he insisted did not reflect reality, would soon be over.
“I will say one thing loud and clear: you will not provide any opportunities for stockpilers ... We can respond to the attacks against us through interest rates, currency and inflation by continuing to make sure our economy works,” said Erdoğan.
One way the people and local administrations could do this, Erdoğan went on to suggest, was to contact the municipal police when they noticed “extraordinary” price increases.
In the paranoid environment Erdoğan and his alliance partner, far-right Nationalist Movement Party (MHP) leader Devlet Bahçeli have fomented in markets and shops around the country, it is striking that, as shopkeepers are accused of treachery for raising prices, the true cause of the price hikes and those responsible have been forgotten.
Citing the lira’s falling value, state-run natural gas distributor BOTAŞ has imposed large, consecutive price hikes on gas in each of the three months since the June 24 elections, leading to a total rise of 30 percent for household and 48 percent for industrial customers.
Electricity prices have also been raised in each of those months, according to the Republic of Turkey Energy Market Regulator, with a total price hike amounting to 20 percent.
Yet when these hikes in energy prices, which are fundamental to every kind of manufacturing, are reflected in product prices, Erdoğan and Bahçeli declare those companies to be traitors.
“What kind of moral compass does it take to use the lira’s fall as an opportunity while our citizens are worried about getting food on the table? We must decipher whoever is stockpiling or sending our country’s wealth abroad,” Bahçeli said on Tuesday.
Not so long ago Erdoğan and Bahçeli had their sights on supposed “foreign powers” they said were attacking Turkey’s economy. Now they have turned their anger to the “traitors” and “enemies within” of their latest speeches so soon after the government announced a U.S. consultancy firm, McKinsey, had been employed in an important position overseeing the country’s economy.
And while the pair have insisted that the economy is, despite all contrary evidence, in fine shape, the number of Turkish firms to have filed for bankruptcy, including manufacturing and construction giants, has risen to 7,000.
After announcing a 53 percent contraction in manufacturing and sales in August, the Turkish Automotive Industry Association’s figures for September, announced on Tuesday, show that this has dropped to 68 percent.
Erdoğan’s administration has downplayed this grim economic tableau as a “problem”, and as the crisis reaches a stage where the cost of living and the number of companies entering administration have soared, it is simply trying to pass off the blame.
This effort has taken a new turn after the Financial Crimes Investigation Board recently opened an investigation into 417 people, mostly Iranian nationals, who have made money transfers to accounts abroad since last year amounting to almost 2.5 billion lira. The board says it has ordered the detention of the suspects as it investigates possible money laundering or terror financing.
On Tuesday, the same day the board’s investigation made headlines, the pro-government newspaper Takvim reported a list of names including some of Turkey’s leading business figures who have allegedly sent a combined $150 billion out of the country through offshore tax havens.
At the same time, rumours have been circulating that, in parallel to international credit rating agencies Moody’s and Fitch lowering Turkey’s credit rating and the ratings of 20 Turkish banks, the government may force banks to convert foreign currency accounts to Turkish lira.
As all this happens, one might assess the board’s investigation, the publication of this news in a government-friendly newspaper, and Bahçeli’s call to investigate those moving money abroad, as laying the ground for new operations against individuals and companies within Turkey, who will be painted as responsible for the country’s economic problems.
Just as Erdoğan warned in August, as the lira reached its weakest point, his government has backup plans for anyone who resorts to sending their money abroad.