Turkish Economy and Medium-Term Program (OVP): Economist says audacity of regime increases due to disorganized opposition

One of the prominent economists in Turkey, Economist Hayri KOZANOGLU has made important evaluations about the newly announced OVP (Medium Term Program).  While assessing the program (MTP) he said “It is understood that a serious tightening of the belt towards labor will be on the agenda in the coming period, and the already challenging borrowing (money) conditions will become even more difficult.”

Upon the question “Following the recent changes in the cabinet and economic bureaucracy, the government has presented a three-year plan with the MTP. How can we interpret the clear intentions in economic policies in Turkey when we look at the program?” the economist shared below evaluation:

ERDOGAN’S TEAM ARE TRYING TO CREATE A NEW NARRATIVE IN ECONOMY

“With the MTP, the Palace Regime (Erdogan) is trying to create a new narrative in the economy. Market-oriented economists who have criticized the ‘interest causes inflation as a result’ approach in previous years and some industrial chambers that have been cautious about these policies are also starting to align themselves. The era of Nurettin Nebati – Şahap Kavcıoğlu (former finance executives in administration) in which interest rates were aggressively lowered, and inflation went out of control, is being portrayed as a ‘parenthesis’ that has closed during the AKP government. Now, it gives the impression that safe waters have been reached with the market-friendly, internationally reputable, and highly experienced duo of Mehmet Şimşek – Gaye Erkan. However, Erdogan designs his economic teams according to the regime’s needs at that specific time. When Berat Albayrak (Erdogan’s son-in-law) left and Naci Ağbal (economist and a member of Ak Party) came, he too was removed from the shelf when his usage period was over. However, the strategy of keeping the exchange rate below 20 Turkish Lira until May 28 election day, sustaining spending with low-interest rates, and delaying excise tax and VAT hikes as much as possible paid off, and the election was won. Nebati (former Finance Minister) completed his mission, and Şimşek took his place. With the support of market-oriented sectors with a psychology of ‘Are we going to be in opposition for 5 years, we have no choice but to compromise,’ new openings are being made in the economy.”

DESPITE ALL CLAIMS GOVERNMENT ALLOCATING THE BUDGET TO INTEREST GROUPS

When we examine the content of the MTP, it becomes clear that, despite all the claims, the government is allocating the budget to interest groups. In the coming period, it is understood that a serious belt tightening towards labor will be on the agenda, and the already challenging borrowing conditions will become even more difficult. The disarray and demoralization of the parliamentary opposition in the legislature further embolden the Palace regime. Therefore, it is necessary for social opposition to be more effective, both individually and collectively, in workplaces and with mass demands, with labor unions, professional organizations, and citizen initiatives. The collective struggle of all labor segments has become a necessity, not a wish, in a period where attacks on labor are increasing.

TOO MUCH OF A DEMOCRACY NOTION SHOULD NOT BE IMPOSED ON FINANCIAL CAPITAL ISSUES

The absence of dimensions such as “judicial independence, separation of powers, press and media freedom” in the MTP is considered a shortcoming. In my opinion, this is wrong as it imposes too much of a democracy notion on financial capital (hot money). After all, developments are taking place within the framework of Biden’s “new world order” design. Following the White House’s directive to “I will give weight to China through Asia-Pacific and to Ukraine through Russia, resolve your own problems in the Middle East” as part of Biden’s strategy to neutralize China, relations with the Gulf Monarchies have softened.

SIMSEK’S CHALLENGE TO ASSURE RELATED PARTIES AT GOLDMAN SACHS HQ ON SEPTEMBER 19

A rapid financing package of $35 billion come from the World Bank (WB). Humberto Lopez, the WB’s Turkey director, openly stated that they supported policies that would stabilize the economy. All of this confirms that Erdogan’s securing Sweden’s NATO membership through financial bargaining with Biden is true. This also aligns with Biden’s strategy to assign a greater role to the WB in neutralizing China. If we were to ask whether international capital, devoid of concerns about democracy and freedoms, would have concerns about the future of its principal and interest payments in a country with an arbitrary one-man regime, the answer would be largely affirmative. Mehmet Şimşek’s “roadshow” in New York at the Goldman Sachs headquarters on September 19 should be evaluated as Erdogan’s efforts to provide reassurance to the segments he once labeled as “usurers / loan sharks”

SERIOUS BELT-TIGHTENING PERIOD FOR ORDINARY CITIZENS IN COMING PERIOD

The projection of a record 5.5 trillion Turkish Lira in interest payments from the budget in the next three years in the Medium-Term Program (MTP) indicates that, contrary to all claims, the Palace regime intends to allocate the budget to interest groups. It is evident that in the coming period, there will be a serious belt-tightening aimed at labor, and the already challenging borrowing conditions will become even more difficult. The disarray and demoralization of the opposition in the parliament further embolden the Palace regime. Therefore, it is imperative for social opposition to be more effective, both individually and collectively, both in individual workplaces and with mass demands, in cooperation with labor unions, professional organizations, and citizen initiatives. The outcry from retirees, who have been seriously disadvantaged as a result of the “July hike,” has even had an impact on the government bloc, leading Erdogan to admit that “This won’t work like this” (meaning a n adjustment should be made for retirees as well etc). We are entering a period where the collective struggle of all labor segments has become a necessity, not a wish, in the face of attacks on labor.

Excerpt translated/edited from article on BIRGUN.net by Esat Aydın