Turkey’s Economy in Crisis
Share on Facebook Share on Twitter

 
Other articles
 

The words of Erdoğan that he used during his visit to England in May, that he would interfere more with the monetary policies were evaluated against the independence of the Central Bank. After Erdoğan's return, a team from the State's economy administration made another visit to the UK to compensate Erdoğan's words and pledged commitment to imperialist economic policies, meeting the global capital oligarchy. But this was not enough, finding its expression in the rapid depreciation of the Turkish Lira since May, the financial crisis pervades the economy of Turkey (as of this writing 1 USD had exceeded 7 Turkish Lira, the losses suffered since 16 May is just over 60%). In fact, because the debts are in the form of foreign currencies and because of the rapid depreciation of the TL, this crisis is a debt crisis at the same time. Turkey has a foreign debt of 455 billion dollars to be paid in the next year and 70% of it belongs to the private sector. In other words, this crisis, with the breakdown of the credit and payment chain, is likely to turn into a real economic crisis, that is, a recession in the near future. Let us remark from the beginning; this crisis is not only an outcome of capital exodus due to lack of democracy which especially grow apace with the new presidential system, nor is the result of the incompetence of the management of the economy alone, nor the result of friction experienced with American imperialism. This crisis is a crisis of the combination of the global capitalist depression and the crisis of the political regime in Turkey together.


What the New Presidential System Changed
The new presidential system, adopted last year on the April 16 referendum, was actually put into practice with this election on 24 June. The system has been continuing to protect the essence of the period in which the assembly lost its functions in the OHAL (state of emergency) for two years, the executive and the legislative integrated, the judiciary system acted under the control of the Palace regime. At the moment the parliament have no authority on approving the new statutory decrees or not, on contrary to how it was before. What this means that Erdoğan's orders become law. Dictator Erdoğan restructured almost all the state institutions, decide the number of ministries, chose them and held all the executive power of the state in his hands. There is a huge legal armor in front of Erdoğan to be tried in the new system too. Government budget expenditures, radio-TV broadcasts, higher education, military, economic management etc. all within the limits of Erdoğan's direct authority.


No need to elaborate more, the crisis of the regime since the 90's in Turkey's was tried to be overcome throuh subjecting the regime to a political islamist restoration intertwined with the economy programme for the financial-economical colonies. However, the point reached now is the loss of hegemony that the fascist dictatorship can not tolerate even the minimum requirements of bourgeois democracy. Fascist chef Erdoğan is faced with the passive or active resistance of more than half of the people, despite the fact that all the power in his hand, all the assaults, all the massacres, aimed at the physical extermination of all those who did not submit. Although it has reduced the influence of the social opposition, it has not digested. While Erdoğan is able to hold on to the hegemony crisis with political power, will he be able to do it when it comes to economic crisis? The place of economic crisis in social struggle will be meaningful at this point.


Why Now And Why It Will Grow

Let's take a look at some international political developments that the Turkish state has experienced in recent years: the gaining of the dictatorship an institutional-legal nature with the April 16 referendum and the June 24 elections, the cleric Brunson hostage bargaining issue (bargaining over Riza Zarrab-Hakan Atilla, detained in the United States while US citizen Brunson arrested for alleged involvement with Gülenist movement), the Halkbank case in the US, the acquisition of S-400 rockets from Russia, and the impending dead-end in Syria in the face of Idlib operation. No matter how much they play an aggravating role in the crisis, this crisis is a financial-economic crisis and its bases have been laid with AKP 's 16-year neoliberal policies.

When the AKP came to power in 2002, the country was struggling with the effects of the 2001 economic crisis. In this period, the AKP came to power as a practitioner of the economic and political integration to imperialism. Public assets and services were opened to plunder by the capital through privatizations. In most cases, privatized enterprises have not continued production, the institutes has been shut down for the sake of the land rentier. Trade unions have disempowered through introducing sub-contracting in every sector, Turkey has become cheap labor reservoir for the international monopolies. During the AKP period, industrial and agricultural productivity declined, and construction-derived investments were over-inflated. When the US depreciated the US dollar in the aftermath of the 2008 crisis, and these cheap dollars were shipped to thewhole world, countries like China and India used this to build a production economy while the AKP has developed an economy that is heavily dependent on imports. The share of the industry has decreased within the GDP. In agriculture, external dependence has peaked. After 2013, with the shifting of US monetary policy to tightening, this external dependence has begun to push Turkey. This situation developed as a tendency, of course, and during certain periods, the finance capital entered the country for rapid hits from the stock market, providing the economy with temporary relief moments. However, the financial capital funds throughout the process, retreated from countries such as Turkey and moved back to USA and European countries. And this has also accelerated the depreciation of the Turkish lira. Turkey, as the financial-economic colony of the US and Western Europe imperialism, has befitted this economic program. On top of all this, the expansion of war policies and military expenditures in Syria and the Middle East weakened the Turkish lira. The last five years have been a process in which the Turkish state has been defeated in its colonial policies of Kurdistan, especially Rojava.

As the Turkish Lira depreciated, it became impossible for the AKP to maintain its first period policy of low interest rate, low exchange rate and low current account deficit. A wing of the capital (TÜSİAD) basically wants to keep the foreign currency low, while the other wing (MUSIAD) wants to keep the interest rate low. But these two wings acted together in the regulations against the working class (mediation, hire of workers, transfer of severance pay to funds, etc.). Erdoğan, like Trump, seemed to live in the world of his imagination, proclaimed interest as the chief enemy of the economy in pursuit of advocating the interests of the class which he collects his political power. It is sometimes combined with a discourse that reaches up to the limit of threatening the capital movements, but later these have not turned into reality with compensatory explanations. He is aware that a possible restriction on capital movements is to dynamite the economy with his own hand.

Why is this crisis simply not easily overcome by an IMF program with or without the IMF? Why is this crisis actually a crisis of accumulation model and precisely because of this, there is no means to intervene in the hands of the AKP? In short, why will this crisis grow even bigger? With the awareness of the limits of the accumulation model they applied, the AKP/Palace regime has saved the system whenever it congested by transferring loans, incentives, grants to the capitalists through tax robbery and raising prices from the laborers. It has tried to breathe the economy with non-re-productive construction investments and during this period, it has tried to provide mass support through social care funds with political content and promoting individual consumption with the cost of debts. However, at the point where we come, the ability of the AKP to overcome the accumulation regime through expropriation of the laborers is severely limited. It is a regime of accumulation based on low rates applied so far. The 'coalition for economical growth', which has established with different sectors, not the hard ideological core has brought the AKP to power since the beginning. Therefore, the 100-day economical program announced after the election on 24 June, announces new construction projects and gives the message of 'pressing throttle'. But for the first time in 16 years, this formula has not been working. The next step in the debt crisis, which is now the currency crisis, is the banking crisis, and the interest rate policy which is now applied makes it inevitable. Such structural crises, of course, bring not only economic but also political and institutional changes.

Exit from the crisis
The powers provided by the presidential system will allow the Erdoğan government to destroy the burden of this crisis on the backs of the working classes and the poor. The established government is already almost entirely composed of bosses and company directors. A new stand-by agreement with the IMF is one of the possible avenues for laborers to put austerity packages into effect. Under the name of spreading the taxes to the base, the burden on the back of the working people, who already bear 70% of the tax burden, will be further aggravated.

Those responsible for the economic crisis are not the people. Erdoğan's recent "we are on the same ship" propaganda, which he insistently emphasizes, is to provide a political-ideological background in an effort to pay the cost of the crisis to the people. By mentioning about an economic war opened against Turkey, he is planning to produce enemy required for ideological consolidation. However, hundreds of companies in the wake of the bankruptcy filing for debt restructuring and tomorrow's possible unemployed people in these companies are creating a wave that is already devastating this ideological dispute. The Erdoğan/Palace regime wants to convince with the lies that with the three or five pennies in their pocket, the 65 million people living under the starvation level must overcome the hard days with unity against the economic war to the state. On the other hand, in the last few years, the biggest monopolies of the country have been eradicated from tax debts, the bourgeois sections which Erdoğan has raised with his own hands and based his social base, have been revamped with guaranteed loans from public funds, while the right to organize all kinds of strikes and the right to associate has been banned with the OHAL, vast working masses have lost their class gainings and also their jobs.

Progressive, revolutionary, democratic organizations, communists have to mobilize to tell the class content of the crisis to the public. It has to spread the political struggle against the economic crisis all over the country and turn it into an opportunity to throw the inertia on the social opposition. It has to put an economy program in front of the public which will increase the productivity for society and the productivity in industry and agriculture with employment and social prosperity. A democratic discourse free from its class content will open the gate of an IMF program-style neoliberal solutions for the payment of the crisis to the laborers. The struggle for an exit from the economic crisis and for a democratic popular power can not be torn apart. The class struggle and democracy struggle will be carried out jointly with the assemblies and initiatives to be organized starting from the neighborhoods, from the workplaces. In this period when workers, laborers, young people and women will feel more anxious about their future, there will be decisive agendas for political struggles, which are struggles against hikes, overwork, corruption, cost of living. It is the primary duty of the revolutionaries to organize the anger of the people to overcome the fascist state blockade.

 

 

Archive

 

2018
August July
June May
April March
February January
2017
December November
October September
2016
November October
September August
July June

 

Turkey’s Economy in Crisis
fc Share on Twitter

 

The words of Erdoğan that he used during his visit to England in May, that he would interfere more with the monetary policies were evaluated against the independence of the Central Bank. After Erdoğan's return, a team from the State's economy administration made another visit to the UK to compensate Erdoğan's words and pledged commitment to imperialist economic policies, meeting the global capital oligarchy. But this was not enough, finding its expression in the rapid depreciation of the Turkish Lira since May, the financial crisis pervades the economy of Turkey (as of this writing 1 USD had exceeded 7 Turkish Lira, the losses suffered since 16 May is just over 60%). In fact, because the debts are in the form of foreign currencies and because of the rapid depreciation of the TL, this crisis is a debt crisis at the same time. Turkey has a foreign debt of 455 billion dollars to be paid in the next year and 70% of it belongs to the private sector. In other words, this crisis, with the breakdown of the credit and payment chain, is likely to turn into a real economic crisis, that is, a recession in the near future. Let us remark from the beginning; this crisis is not only an outcome of capital exodus due to lack of democracy which especially grow apace with the new presidential system, nor is the result of the incompetence of the management of the economy alone, nor the result of friction experienced with American imperialism. This crisis is a crisis of the combination of the global capitalist depression and the crisis of the political regime in Turkey together.


What the New Presidential System Changed
The new presidential system, adopted last year on the April 16 referendum, was actually put into practice with this election on 24 June. The system has been continuing to protect the essence of the period in which the assembly lost its functions in the OHAL (state of emergency) for two years, the executive and the legislative integrated, the judiciary system acted under the control of the Palace regime. At the moment the parliament have no authority on approving the new statutory decrees or not, on contrary to how it was before. What this means that Erdoğan's orders become law. Dictator Erdoğan restructured almost all the state institutions, decide the number of ministries, chose them and held all the executive power of the state in his hands. There is a huge legal armor in front of Erdoğan to be tried in the new system too. Government budget expenditures, radio-TV broadcasts, higher education, military, economic management etc. all within the limits of Erdoğan's direct authority.


No need to elaborate more, the crisis of the regime since the 90's in Turkey's was tried to be overcome throuh subjecting the regime to a political islamist restoration intertwined with the economy programme for the financial-economical colonies. However, the point reached now is the loss of hegemony that the fascist dictatorship can not tolerate even the minimum requirements of bourgeois democracy. Fascist chef Erdoğan is faced with the passive or active resistance of more than half of the people, despite the fact that all the power in his hand, all the assaults, all the massacres, aimed at the physical extermination of all those who did not submit. Although it has reduced the influence of the social opposition, it has not digested. While Erdoğan is able to hold on to the hegemony crisis with political power, will he be able to do it when it comes to economic crisis? The place of economic crisis in social struggle will be meaningful at this point.


Why Now And Why It Will Grow

Let's take a look at some international political developments that the Turkish state has experienced in recent years: the gaining of the dictatorship an institutional-legal nature with the April 16 referendum and the June 24 elections, the cleric Brunson hostage bargaining issue (bargaining over Riza Zarrab-Hakan Atilla, detained in the United States while US citizen Brunson arrested for alleged involvement with Gülenist movement), the Halkbank case in the US, the acquisition of S-400 rockets from Russia, and the impending dead-end in Syria in the face of Idlib operation. No matter how much they play an aggravating role in the crisis, this crisis is a financial-economic crisis and its bases have been laid with AKP 's 16-year neoliberal policies.

When the AKP came to power in 2002, the country was struggling with the effects of the 2001 economic crisis. In this period, the AKP came to power as a practitioner of the economic and political integration to imperialism. Public assets and services were opened to plunder by the capital through privatizations. In most cases, privatized enterprises have not continued production, the institutes has been shut down for the sake of the land rentier. Trade unions have disempowered through introducing sub-contracting in every sector, Turkey has become cheap labor reservoir for the international monopolies. During the AKP period, industrial and agricultural productivity declined, and construction-derived investments were over-inflated. When the US depreciated the US dollar in the aftermath of the 2008 crisis, and these cheap dollars were shipped to thewhole world, countries like China and India used this to build a production economy while the AKP has developed an economy that is heavily dependent on imports. The share of the industry has decreased within the GDP. In agriculture, external dependence has peaked. After 2013, with the shifting of US monetary policy to tightening, this external dependence has begun to push Turkey. This situation developed as a tendency, of course, and during certain periods, the finance capital entered the country for rapid hits from the stock market, providing the economy with temporary relief moments. However, the financial capital funds throughout the process, retreated from countries such as Turkey and moved back to USA and European countries. And this has also accelerated the depreciation of the Turkish lira. Turkey, as the financial-economic colony of the US and Western Europe imperialism, has befitted this economic program. On top of all this, the expansion of war policies and military expenditures in Syria and the Middle East weakened the Turkish lira. The last five years have been a process in which the Turkish state has been defeated in its colonial policies of Kurdistan, especially Rojava.

As the Turkish Lira depreciated, it became impossible for the AKP to maintain its first period policy of low interest rate, low exchange rate and low current account deficit. A wing of the capital (TÜSİAD) basically wants to keep the foreign currency low, while the other wing (MUSIAD) wants to keep the interest rate low. But these two wings acted together in the regulations against the working class (mediation, hire of workers, transfer of severance pay to funds, etc.). Erdoğan, like Trump, seemed to live in the world of his imagination, proclaimed interest as the chief enemy of the economy in pursuit of advocating the interests of the class which he collects his political power. It is sometimes combined with a discourse that reaches up to the limit of threatening the capital movements, but later these have not turned into reality with compensatory explanations. He is aware that a possible restriction on capital movements is to dynamite the economy with his own hand.

Why is this crisis simply not easily overcome by an IMF program with or without the IMF? Why is this crisis actually a crisis of accumulation model and precisely because of this, there is no means to intervene in the hands of the AKP? In short, why will this crisis grow even bigger? With the awareness of the limits of the accumulation model they applied, the AKP/Palace regime has saved the system whenever it congested by transferring loans, incentives, grants to the capitalists through tax robbery and raising prices from the laborers. It has tried to breathe the economy with non-re-productive construction investments and during this period, it has tried to provide mass support through social care funds with political content and promoting individual consumption with the cost of debts. However, at the point where we come, the ability of the AKP to overcome the accumulation regime through expropriation of the laborers is severely limited. It is a regime of accumulation based on low rates applied so far. The 'coalition for economical growth', which has established with different sectors, not the hard ideological core has brought the AKP to power since the beginning. Therefore, the 100-day economical program announced after the election on 24 June, announces new construction projects and gives the message of 'pressing throttle'. But for the first time in 16 years, this formula has not been working. The next step in the debt crisis, which is now the currency crisis, is the banking crisis, and the interest rate policy which is now applied makes it inevitable. Such structural crises, of course, bring not only economic but also political and institutional changes.

Exit from the crisis
The powers provided by the presidential system will allow the Erdoğan government to destroy the burden of this crisis on the backs of the working classes and the poor. The established government is already almost entirely composed of bosses and company directors. A new stand-by agreement with the IMF is one of the possible avenues for laborers to put austerity packages into effect. Under the name of spreading the taxes to the base, the burden on the back of the working people, who already bear 70% of the tax burden, will be further aggravated.

Those responsible for the economic crisis are not the people. Erdoğan's recent "we are on the same ship" propaganda, which he insistently emphasizes, is to provide a political-ideological background in an effort to pay the cost of the crisis to the people. By mentioning about an economic war opened against Turkey, he is planning to produce enemy required for ideological consolidation. However, hundreds of companies in the wake of the bankruptcy filing for debt restructuring and tomorrow's possible unemployed people in these companies are creating a wave that is already devastating this ideological dispute. The Erdoğan/Palace regime wants to convince with the lies that with the three or five pennies in their pocket, the 65 million people living under the starvation level must overcome the hard days with unity against the economic war to the state. On the other hand, in the last few years, the biggest monopolies of the country have been eradicated from tax debts, the bourgeois sections which Erdoğan has raised with his own hands and based his social base, have been revamped with guaranteed loans from public funds, while the right to organize all kinds of strikes and the right to associate has been banned with the OHAL, vast working masses have lost their class gainings and also their jobs.

Progressive, revolutionary, democratic organizations, communists have to mobilize to tell the class content of the crisis to the public. It has to spread the political struggle against the economic crisis all over the country and turn it into an opportunity to throw the inertia on the social opposition. It has to put an economy program in front of the public which will increase the productivity for society and the productivity in industry and agriculture with employment and social prosperity. A democratic discourse free from its class content will open the gate of an IMF program-style neoliberal solutions for the payment of the crisis to the laborers. The struggle for an exit from the economic crisis and for a democratic popular power can not be torn apart. The class struggle and democracy struggle will be carried out jointly with the assemblies and initiatives to be organized starting from the neighborhoods, from the workplaces. In this period when workers, laborers, young people and women will feel more anxious about their future, there will be decisive agendas for political struggles, which are struggles against hikes, overwork, corruption, cost of living. It is the primary duty of the revolutionaries to organize the anger of the people to overcome the fascist state blockade.