Erdogan’s latest answer to Turkey’s woes – dig another hole

Turkey’s currency crisis may not be over. It’s perhaps time that Erdogan’s self-labelled “crazy projects” were.
Sunday 24/02/2019
Turkish President and the leader of Turkey's ruling Justice and Development Party (AKP) Recep Tayyip Erdogan delivers a speech during his party's campaign rally in Altindag district of Ankara, Turkey on February 20, 2019. (AFP)
Turkish President and the leader of Turkey's ruling Justice and Development Party (AKP) Recep Tayyip Erdogan delivers a speech during his party's campaign rally in Altindag district of Ankara, Turkey on February 20, 2019. (AFP)

Turkish President Recep Tayyip Erdogan may have finally lost his touch with voters.    

Amid Turkey’s worst economic downturn in almost two decades, Erdogan stood before a large crowd in Ankara and promised to build a canal through the city covering 3.2 million sq. metres of land. He didn’t say which river it would flow from.

With nationwide local elections coming March 31, Erdogan could be losing his once-unerring talent for gauging the mood of Turkey after winning vast new presidential powers last year and moving to a $600 million palace on a hill near the capital.

Turks are suffering from a sharp decline in living standards after Erdogan picked a fight last year with US President Donald Trump over an imprisoned US pastor, sparking a currency crisis that was already looming because of his populist economic policies.

So, promising to build a huge hole at great expense may not be well advised.

An index of life satisfaction published by the Turkish Statistical Institute (TUIK) reported that Turks say they are less happy than they have been since at least 2009, when the survey began. Meanwhile, Erdogan, while still Turkey’s most popular leader by far, has seen his job approval rating slide, a recent survey by Ankara-based pollster Metropoll indicated.

Local elections are a huge deal in Turkey and Erdogan knows it. He is campaigning on behalf of his ruling Justice and Development Party (AKP) every day, throwing flowers from buses, shaking hands with shopkeepers and kissing babies.

The March polls carry extra significance because they represent the first ballot box test of Erdogan’s popularity since June, when he enhanced his powers to become the most powerful leader in Turkey’s democratic history.

The president has also made himself head of the country’s sovereign wealth fund, taken away oversight of the biggest state companies from parliament and put Berat Albayrak, a young businessman married to his daughter Esra, in charge of the economy.

Erdogan used a failed military coup in July 2016 — it’s strongly rumoured he had prior knowledge of the intervention — to lock up Selahattin Demirtas, his most charismatic political adversary, on charges of supporting terrorism. Police and prosecutors, often hand-picked by the AKP, have arrested tens of thousands of people, including journalists, teachers and human rights defenders, accused of complicity in the coup.

It was no surprise that TUIK’s life satisfaction survey results said members of the state security services were the most satisfied people in Turkey. The next happiest were transport industry staff members — Erdogan has invested tens of billions of dollars in Turkey’s infrastructure with the help of his business elite, including an unfinished mega-airport in Istanbul, with loans guaranteed by Albayrak’s Treasury.

The survey stated that Turks who did not finish school have a relatively higher level of happiness. Perhaps, then, Erdogan spoke to those people when he took to the stage February 20 to announce the canal project.

Others may find the canal, an idea first raised by a mayor almost a decade ago, hard to stomach, given the likely expense.

Turkish food prices surged more than 30%, on an annual basis, in the  last month, a travesty that Erdogan and his son-in-law blamed on “food terrorism” rather than the currency crisis or government policy. Overall inflation is at 20.4% and more and more consumers and businesses are going into default since interest rates surged.

The price of imported goods such as mobile phones jumped after the lira plummeted 28% against the US dollar last year. Almost one-quarter of young people are unemployed.

The government has implemented a series of costly short-term measures in response, slashing taxes and using banks to restructure loans.

Let us hope Erdogan’s promise to build the Ankara waterway is an empty one — a canal he pledged for Istanbul ahead of general elections in 2011 is still to be built. No one with enough money has stepped up to fund it.

Such is the state of the Turkish economy that firms tasked with following up on Erdogan’s pledge would not be able to find the cash either. The country’s private banks are also short on spare funds. Unless, that is, Erdogan uses state-run banks., which he controls under the wealth fund, for the financing.

That opens another can of worms. Turkey can ill afford more misguided infrastructure projects. Government finances are only in the black thanks to a one-off profit windfall from the Central Bank of Turkey. Investor confidence in the country is still on very shaky ground.

As ratings agency Standard & Poor’s said, Turkey’s currency crisis may not be over. It’s perhaps time that Erdogan’s self-labelled “crazy projects” were.

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