My readers’ comments told me that yesterday’s article was missing some details, so today I decided I should write a new one with more specifics. Obviously, a single article will not be enough to discuss everything as thoroughly as I would like to, but I’ll give it a try.
Let’s rewind: Turkey has been through great ordeals over the past decades. A new era that started with the capture of Öcalan, floods and the 1999 Marmara earthquake, 2001 banking crisis, Kemal Derviş’s coming to office and elections. This era was followed by the period of strengthening ties with the West, along with social cohesion and reconciliation between the years of 2002 and 2013.
Indeed, the 2002-2013 period has been the “golden years” for most of the society. Besides its sporting achievements, the social life in Turkey was making the international headlines. As a country where different cultures and beliefs have peacefully cohabited for ages, Turkey was being applauded, almost envied, by the international community at the time. Despite a few tragic events, such as the assassination of Hrant Dink, the country’s modernization movement continued.
By the beginning of 2011, the government and its Gülenist supporters started having strong differences of opinion and finally the tensions peaked with the Gezi Park protests in 2013. As for the country’s economy, it remained rather calm, with slight movements in USD/TRY exchange rate. However, the nefarious coup attempt on July 15th was the one incident that changed this stable trend, driving it into a sharp upward direction. The USD/TRY exchange rate, which constantly went up until the introduction of the KKM (FX volatility-hedged deposit scheme) in 2021, pretended to have some rest in 2022. But not long after, it continued to rise from where it left off. Holding on to around TRY 3 in July 2016, the duo has reached TRY 20 today. In other words, our national currency has experienced a seven-fold depreciation in the last six and a half years.
The country’s ineffective economic model, military operations against terrorist groups following after the failed coup attempt, high-speed train crash in 2018, terrorist attacks, government’s efforts to lower interest rates, high inflation, diminishing Central Bank reserves, turmoil in domestic politics, COVID-19 pandemic, deadly earthquakes the Russian-Ukrainian conflict have further worsened the situation in Turkey.
Whoever wins the elections, they must first start establishing social justice and peace, in lieu of immediately returning to orthodox policies. Even the bad economy should be among the medium priority issues.
A gradual return to market economy, a judicial reform, eliminating unequal and discriminatory practices towards people from different backgrounds, ensuring that the business world can once again muster its courage to face the government and show them the truth, and finally not making frequent changes to the legislation will definitely have a greater positive impact than a mere interest rate decision.