Millions of people are plunged into poverty with the currency crisis in Turkey, as Erdogan’s erratic monetary policy wrecks the national currency and sparks inflation.
The testimony of a 13-year-old girl, telling in front of her rag-picker father in tears that she reasons herself in the face of hunger and drinks water to persuade herself to have a full stomach spread like a trail of powder on social networks. It sparked cascades of comments of rare violence against President Erdogan and the AKP, the Islamic-conservative party in power for two decades. In Turkey, the government and the many media under its control are no longer able to cover up the explosion of hunger, misery and anger.
In Istanbul, long queues form daily in front of büfe selling cheap people’s bread, loaves subsidized by the town hall, sold for 1.25 Turkish lira (TL), or 8 euro cents. There are over 600 outlets that are failing to meet demand despite a nearly doubling of daily production from 800,000 to 1.5 million units.
Part of the middle class has increased its ration of bread, to the detriment of vegetables or meat, which have become overpriced. The prices sometimes change morning and evening, ”testifies an old man who is waiting his turn. It is not uncommon for convenience stores to close during the day to change the labels. People are suffering, ”echoed an electrician whose rent had just been increased to 2,000 TL (€ 136), swallowing up more than two-thirds of his monthly salary.
Poverty has been on the rise since the first pound crisis in 2018, amplified by a Covid-19 epidemic (80,000 deaths) which plagued tourism and the entire economy. According to the World Bank, 3.2 million Turks fell from the middle class into poverty in 2019 and 2020. The number of people living below the poverty line reached 10.2 million people at the start of the year, or 12 % Population.
Currency crisis in Turkey : the pound stings the nose
This was before the collapse of the past few weeks. As criticisms mount and his popularity grows – for the first time pollsters envision his defeat in 2023 – the brooding President has declared a war for economic sovereignty. ” He sacked two central bank governors in a matter of months and imposed several key rate cuts when Western countries considered the opposite. Erdogan claims to boost the competitiveness of Turkish companies and reconnect with Chinese-style growth. To swallow the pill to his electorate, he repeats that Islam condemns interest.
This policy has pushed the Turkish lira over the precipice: it has lost half of its value against the euro since mid-October, the cost of imports, energy in mind, increasing in proportion. Inflation officially measured at 21% is well over 50% according to private institutes.
As protests against the high cost of living have multiplied in recent days and the Tüsiad, the main employers’ organization, has called for him to return to proven economic principles, “Erdogan is turning heads. Last week, he announced an upcoming 50% minimum wage hike. On Monday, he called on Turks to return to saving in pounds rather than dollars or euros, promising that an obscure mechanism – which amounts to a disguised interest rate – would secure their investments against devaluations. The national currency suddenly regained the lost 11% … in a single day.
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