Striking insights from Duran Bülbül: Deep crisis and social costs in the Turkish economy

Prof. Dr. Duran Bülbül states that the operations targeting mayors and the allegations of corruption that began on March 19 have turned into a political crisis. Noting that the Republican People's Party (CHP) has failed to manage this process correctly, Bülbül says that the CHP has been unable to take a clear stance against the corruption allegations and has reduced the issue to the unfair practices of the government. Emphasizing that the CHP should have established a commission to investigate the corruption allegations and presented a transparent report, Bülbül states that the party has not taken a step in this direction and has effectively fallen into a position of protecting corruption.

Bülbül explains with figures that this situation has forced the public to pay a heavy economic price:

“The Central Bank's 100 billion TL reserve melted away in one night. This brought an additional burden of 49,361 TL per person to 85 million citizens. Due to the rise in the exchange rate, external debt increased by 51 billion dollars (2 trillion 100 billion TL), which means a burden of 28 thousand TL for each citizen. Household debt increased by 500 billion TL, creating an additional cost of 6 thousand TL per person. In total, each citizen has become indebted by approximately 100 thousand TL.”

According to Bülbül, this burden has been reflected to the public through increased taxes, fuel, electricity, natural gas, and food prices. “The fact that agricultural product prices in the summer months exceed winter prices is an indicator of how this crisis has hit the public,” says Bülbül, emphasizing that the cost of corruption is being taken from the poor and realized as a transfer of wealth to certain segments.

TURKISH ECONOMY: TRANSITION FROM CASINO CAPITALISM TO A PRODUCTION ECONOMY IS ESSENTIAL

Arguing that the Turkish economy is built on a debt and interest-focused “casino capitalism,” Bülbül states that the level of prosperity will not increase without a transition to a production economy. “To compete globally, Turkey must focus on production in agriculture, industry, science, and technology. However, in recent years, we have turned into a consumption economy that lives on daily crises, exchange rate hikes, and interest rate increases,” he says.

Bülbül draws attention to the injustice in income distribution:

“10% of the population shares 90% of the gross national product. This also brings injustice in democracy and law.” Expressing that it is not possible to ensure price and economic stability in the short term, Bülbül says that Turkey's externally dependent (80% imports) structure will not improve without increasing exports. Stating that “the economy will not improve without raising transparency and democratic norms,” he emphasizes that the crisis has become a way of life and that this situation is a dangerous “disease.”

EXCHANGE RATE: STABILITY IS NOT POSSIBLE WITHOUT TRUST

Touching on exchange rate instability, Bülbül states that the Turkish economy is fragile due to its external dependence and its structure tied to politics. “The economy is a matter of trust. People should believe that prices, interest rates, and inflation will not change when they wake up in the morning. If this trust is not provided, the economy remains vulnerable to every event,” he says. Stating that earthquakes, fires, and social and societal crises constantly affect the economy, Bülbül assessed, “We must get rid of crisis policies. It is the duty of all opposition parties, unions, democratic mass organizations, associations, and everyone living in this country.”

Bülbül emphasizes that Turkey needs a “national development and economic model.” Otherwise, he stressed, global processes could leave Turkey facing even heavier costs.

“The events around us could emerge as a betrayal that will harm our multi-billion dollar economy and the lives of millions of people.”

CURRENCY INSTABILITY: BANKRUPTCIES AND UNEMPLOYMENT ARE LOOMING

Evaluating the effects of currency instability on small and medium-sized enterprises, Bülbül states that Turkey's production structure, which is 80% dependent on imports, triggers import-led inflation and cost increases. “Exchange rate hikes bring impoverishment and destitution. This will increase company bankruptcies, downsizing, and concordat processes,” he says. Emphasizing that unemployment is inevitable, Bülbül states that high taxes and deflation fuel this situation.

“We officially show inflation as low, but the public knows that the real inflation is two to three times what is announced,” says Bülbül, adding that economic policies should be regulated in a way that stops deflation, lowers taxes, and pulls inflation down in the long term. Otherwise, he states that the spiral of economic contraction, impoverishment, and unemployment is inevitable.