The plunder system is melting Turkey: The middle class has been destroyed, prosperity on the streets is an illusion

Beril Balkan - 12punto.com.tr

While the Turkish economy struggles with high inflation, deepening income inequality, concordats, and a wave of bankruptcies, the program implemented by economic management under the guise of a "return to rational policies" has fallen far short of its targets. 12punto columnist and economist Meriç Köyatası has shed light on the impasse the country's economy is in, the 'hot money exploitation' behind the scenes, and the reality behind the false perception of prosperity on the streets.

Köyatası stated that the current picture is unsustainable, emphasizing that salvation is only possible through a radical political change and a "public-oriented, planned" development model.

"THE RATIONAL PERIOD HAS MADE US MISS EVEN THE NEBATİ PERIOD"

Evaluating the 3-year period since the Mehmet Şimşek administration took office, Meriç Köyatası stated that inflation figures are far from the promised success. Reminding that as the Şimşek administration's program completes its 3rd year, total inflation in this period has increased by at least 216 percent even according to TÜİK data, Köyatası noted that the 3-year inflation during the Nureddin Nebati period—which they claimed was an inherited wreck and was criticized for irrational policies—was 182 percent. Köyatası emphasized that the period they claimed was a return to rational policies has created an inflationary destruction much greater than the previous period, and although both periods were failures, this latest period has turned into a complete disaster.

"THEY ARE ROBBING THE TURKISH NATION WITH 30 PERCENT INTEREST IN DOLLAR TERMS"

Stating that the implemented "suppressed exchange rate and high interest rate" policy has turned Turkey into a paradise for global loan sharks, Köyatası said that the country's resources are being transferred abroad. The experienced economist stated that an unprecedented concession in the world is being given to hot money to make foreign currency appear abundant domestically, noting that while dollar interest rates are around 4.5 percent globally, hidden or explicit interest rates reaching 30 percent in dollar terms are being paid to hot money in Turkey. Explaining that this method creates an illusion as if there is plenty of foreign currency, while in the background Turkey has been made to pay 25 billion dollars in interest abroad annually, Köyatası added that this is a massive exploitation mechanism established from abroad to the domestic market and is effectively the robbery of the Turkish nation.

"AS THE EXCHANGE RATE WAS SUPPRESSED, PRICE ANARCHY AND IMMORALITY BEGAN"

Arguing that keeping the exchange rate below inflation has destroyed the "value measurement" function of money, Köyatası said that pricing behaviors in the market have been completely corrupted. Stating that the Central Bank calls this situation a "disruption in pricing behavior," Köyatası expressed that in reality, people are being pushed toward immorality when setting prices, and there is complete price anarchy in the market. Emphasizing that this unrealistic exchange rate has wiped out the competitiveness of industrialists, exporters, and agricultural producers, Köyatası predicted that Turkey has now become an extremely expensive country for tourism as well, and that very serious problems will soon begin in the all-inclusive tourism model.

"WHY ARE MALLS AND RESTAURANTS FULL? TURKEY IS NOT POOR, IT IS A PLUNDERED COUNTRY"

Explaining the fact that luxury restaurants, hotels, and shopping malls are full despite news of bankruptcies and shop closures as a result of income inequality, Köyatası conducted a striking population analysis. Stating that the middle class in Turkey has been completely destroyed, with 80 percent of the population living below the poverty line, almost in the misery of an African country, Köyatası said that in contrast, the remaining 20 percent upper-income group has seized almost 48 percent of the national income. He stated that this segment corresponds to approximately 17-18 million people and that they lead a life at Belgian or Brussels standards.

Pointing out that the total number of tourism-certified beds in Turkey is 2 million and the number of chairs in luxury restaurants is around 1 million, Köyatası stated that this minority of 17 million could fill all the luxury hotels in Turkey, and even go on to vacation in Greece, Italy, and France. Reminding that Turkey is the second country in the world with the fastest-growing number of millionaires, the analyst stated that those crowds on the streets do not prove that the economy is doing well, but rather that wealth is concentrated in the hands of a small minority, while on the other side, one faces the reality of millions who collect trash in evening markets and are condemned to hunger on minimum wage.

FAILURE PREVAILS IN ALL MACRO INDICATORS

Stating that there is no positive picture in any of the basic macro indicators that should be looked at to measure the health of an economy, Köyatası said that Turkey has failed in all these areas. The economist, stating that price stability has been completely destroyed with inflation reaching 216 percent in the last 3 years, said that it is insufficient to present 1-2 percent growth rates as a success when Turkey, with a population exceeding 95 million including refugees, should be growing at a band of at least 5.5 to 7.5 percent annually.

Emphasizing that real unemployment rates on the employment side are not in the single digits as in the made-up data, and that broad-defined unemployment is hovering at 32 percent and youth unemployment at 35 percent, Köyatası added that domestic debt and the budget deficit have hit the ceiling, and the public debt stock has reached a level that will mortgage future generations. Touching on the issue of the foreign deficit, Köyatası stated that it is clearly seen that the current account deficit, which was targeted at 25 billion dollars at the beginning of the year, will not fall below 60-70 billion dollars by the end of the year.

PRESCRIPTION FOR EXIT: RULE OF LAW, NATIONALIZATION, AND PLANNED DEVELOPMENT

Underlining that no economic solution should be expected from the current political power, Köyatası stated that the first and most important step for Turkey to get out of this debt and exploitation spiral is for the government to change through the will of the voters and for the rule of law to be re-established. Stating that it is impossible for the economy to improve in an environment where the legal system does not inspire confidence, Köyatası argued as a second step that strategic assets handed over under the name of privatization, as well as hospitals, bridges, and highways under Public-Private Partnership projects with patient guarantees, should be immediately nationalized without paying any compensation.

Stating that the state budget should not be designed to enrich cronies but to protect citizens, social security, and social justice, the economist expressed that it is mandatory to urgently transition to a planned development model that will end dependence on imports in agriculture and industry. Concluding his words by emphasizing that Turkey actually possesses extremely rich resources, Köyatası stated that we have the potential to keep our 85-90 million people living in prosperity, and that our only need is to prevent these resources from being plundered and to use them solely for the benefit of the people.