Economist Meriç Köyatası evaluates the effects of the boycott: 'It showed the power of widespread protest'

12punto.com.tr

The effects of the consumption boycott held in Turkey on April 2 continue to be debated in economic circles. 12punto columnist and economist Meriç Köyatası emphasized that the boycott was not only an economic action but also a successful example of the youth's silent protest.

A TWO-DIMENSIONAL BOYCOTT

Pointing out that the boycott had two important pillars, Köyatası said, 'Young people protesting lawlessness and the administration brought this call to the agenda without needing a major organization, and they were successful. I evaluate this boycott not as an economic action, but as support and solidarity from a large segment of society for the youth's protest proposal. In this sense, the boycott achieved its purpose. The goal was not to collapse the economy; the magnitude of the power of social protest was demonstrated.'

Pointing out that the other pillar of the boycott was the call from the CHP, Köyatası divided this situation into two: 'First, the boycott of non-media products owned by pro-government media owners. Second, the boycott of products from companies that advertise on these media channels. I think the boycott targeting the advertising companies, in particular, will be more effective.'

THE 20 PERCENT SEGMENT CONTINUES TO CONSUME

Reminding that a large portion of the population in Turkey is below the poverty line, Köyatası said, '20 percent of the population receives half of the total income. This segment continues to consume. These 18 million people, consisting of upper-income groups from the old era and the wealthy close to the government, are actually fueling inflation. This segment is not participating in the boycott. The decline in consumption is largely the result of the erosion of purchasing power, not the boycott.'

TAXES ON ALCOHOL ARE EQUIVALENT TO THE DİYANET'S EXPENDITURES

In Turkey, alcohol and tobacco products constitute an important item in terms of tax revenue. Arguing that a boycott of these products would lead to limited tax loss, Köyatası said:

'According to 2024 budget realizations, total tax revenues were 7 trillion 304 billion 863 million liras. The tax collected from alcohol, at 104 billion 996 million liras, accounted for only 1.4 percent of the total. The 2024 expenditures of the Presidency of Religious Affairs (Diyanet) reached 97 billion 259 million liras. This brings the debate that those who drink alcohol are financing the Diyanet back to the agenda. On the other hand, the tax collected from tobacco corresponds to 4.23 percent of total taxes, at 309 billion 251 million liras.'

Köyatası stated that the high price hikes on alcohol products reflect a political approach. According to TUIK data, the highest price increase between 2003 and 2023 occurred in alcoholic beverages. The price of alcohol, which was 100 TL in 2003, rose to 3,422 TL in 2023.

HAS THE STAGFLATION PROCESS BEGUN?

Drawing attention to the signs of slowdown in the Turkish economy, Köyatası emphasized that official growth data does not reflect the reality. 'Stagflation is a situation where both inflation and economic stagnation occur at the same time. Technically, there must be a contraction for two consecutive quarters. Since TUIK data in Turkey is controversial, we interpret it through market signals. The decline in industrial production and purchasing orders points to a slowdown in the real economy.'

Touching on the effects of stagflation on households, Köyatası added, 'Unemployment is rising while purchasing power is falling. Normally, prices stabilize during a period of stagnation; however, high inflation continues in Turkey.'