Inflation is soaring in the country, the Turkish lira is collapsing and there are increasing signs of impoverishment of the population. At the same time, GDP and growth are on the rise. Experts assure us that the resilience of the Turkish economy is a puzzle. If Turkey frees itself from terrorist Islamist rulers, there is a great opportunity for sustainable development that the Turkish people truly deserve.
Talking about economics in Turkey is a bit like stepping into a ring with a masked opponent where all punches are allowed. You come out stunned and have the strange feeling of being completely disoriented. Turkish President Recep Tayyip Erdogan, who has been in power for twenty years, says it to anyone who will listen: you have to know how to “remain patient and maintain confidence” in times of crisis, because “we know what we are doing and we know how to do it.”
Finance Minister Nureddin Nebati, the third person close to the head of state to hold the post in two years, attempted a semantic explanation of the situation a month ago in Istanbul and in public, favoring “a heterodox approach” in a formulation that was convoluted to say the least, which, according to the former Türk Telekom board member, “represents an epistemological break with neoclassical economic thinking and is gaining ground with behavioral and neuroeconomic sciences.”
Viewed from above, the numbers actually make you dizzy. Since 2018, the country seems to have experienced only a succession of currency crises, each worse than the last. The Turkish lira (TL) has lost more than 28% against the dollar since Jan. 1. In 2021, it had contracted by 44%. The trade balance expanded by 430% in October. Inflation reached 85.5% over a year in the same month, the highest level in a quarter century, according to the Turkish Institute of Statistics. Specifically, this translates to a 117% increase in prices for transportation, 99% for food and 85% for housing. According to the Turkish Confederation of Trade Unions (DISK), these increases affect the lowest wages and precarious housing by 126% to 146%. In other words, a challenge knowing that more than half of Turkish workers are paid the minimum wage, i.e. 5,500 TL, less than 300 euros per month.
