For the first time in elections held while the AKP has been in office, these elections have seen economic worries overtake political arguments. With the chain effect of rising inflation, exchange rates and interest rates creating concerns about an imminent crisis, this has lent an economic tone to the messages being given to the electorate in the political arena. Not many people may know this, but Selin Sayek Böke is not the first person from the Böke family to embark on politics in the CHP. Her mother, Dr. Füsun Sayek, also stood as a CHP parliamentary candidate for Hatay in the 1995 elections but did not succeed in getting elected.
*With there being obvious economic measures for halting the rise in the exchange rate, did the dollar have to reach 3.92 for these to be implemented?
Absolutely not. The Turkish lira has risen from 3.02 to 4.75 against the dollar since the proclamation of the state of emergency until today and has lost 57% in value. This is a state of emergency devaluation. Just this year, the Turkish lira has depreciated four times more than its peer currencies. This means that the blame lies with us. This means that the problem is the palace regime and its legal and economic mindset. Exchange and interest rates and inflation are a result of this. If you are in office for sixteen years and take no steps to reduce the country’s dependence on foreign savings you will then harm the country’s international trustworthiness and create risk. You have no right to open holes in the roof of the house and then complain about getting wet when it rains.
*Increasing interest rates is no longer curbing exchange rate rises. How is trust in the markets to be instilled?
There is one way and that is a change of power and the end of the state of emergency regime. They have destroyed institutions out of political concerns. There is a need for new politics and governance to instil trust in Turkey. The state of emergency and the presidential system that makes the state of emergency permanent must go. Without democracy, independent institutions operating on a meritocratic basis and justice, there will neither be an inhabitable country nor a functioning economy.
*Did the messages Erdoğan gave to foreign fund institutions in the UK contribute to the rapid rise in the dollar?
That particular visit by the AKP General Chair to the UK served to confirm a number of things that had happened. The dollar stood at 4.31 when Erdoğan set out for London. Then came the lunch closed to the press and talk amounting to “I am the single man and I determine everything” on a TV interview. The dollar rose to 4.92. Erdoğan’s speech was a proclamation of dictatorship. The foreign investors who heard this commented, “Turkey is not an investment grade country.” It was not only the exchange rate that paid the price. Mehmet Şimşek and the Central Bank governor promised to raise interest rates on the second London visit and as a result the interest rate was increased by 4.25 points.
The end of the road is near
*Despite the high current-account deficit, the appearance was given of a strong economy. Has the hot money dried up?
Global liquidity is declining. Its effect on Turkey will depend on the choice we make on 24 June. The governing party’s order is an order based on rulelessness, the state of emergency, institutional collapse under the single man and debt without production. If this governing party and order continues, we will come to the end of the road in the economy and an economic crisis in the sense we are familiar with will become inevitable. On top of this, we know very well that the Palace’s bill, whether with or without the IMF, will be made out to the working classes. Citizens will be left to shoulder the painful remedy and the economy will go into sharp descent. When in fact we can rescue the Turkish economy without going into crisis. A soft transition may be possible in the economy with our people-orientated development programme.
*Inflation is stuck in double figures and the current-account deficit is rising. By the end of the year, 93.5 billion dollars in foreign debt must be repaid. What are the measures that the government must urgently take faced with this?
Steps must be taken to achieve macroeconomic financial stability and escape from the interest rate-exchange rate spiral. Exiting the state of emergency regime and transitional steps to a strengthened parliamentary democracy will speedily halt the bleeding. In the process, interest and exchange rates and inflation will be reined in. At the same time, monetary and fiscal policy must be set within an institutional framework. For example, an end must be put to the Wealth Fund implementation which is a parallel Treasury. Regulations must be made in the Public Procurement Law, which has been filled with holes to support rentier capital, that will put an end the to the waste of public resources. There must be a speedy start to reforming production and constructing a welfare state. Reforms in production and the welfare state will both spark off comprehensive development and bring about macroeconomic and financial stability.
Turkey has the resources
*The Economy section of the CHP’s election manifesto is detailed and ambitious. How will it be possible to achieve these pledges against a background in which the economy is giving the alarm about us “going bust?”
Turkey has the resources. The problem is that the governing party uses these resources to further its own rule, not for the country. If it goes on like this, these resources are also close to depletion. The problem is that a certain class preference lies at the heart of the Palace regime’s economic policy and this preference is for rentier capital and not productive forces and labour. The steps that will be taken to instil trust will be lifting the state of emergency regime, transition to parliamentary democracy, ending the Wealth Fund implementation and rescuing the public procurement law. In place of tax amnesties, giving incentives in the form of zero-interest loans to manufacturers and small businesspeople who pay tax and insurance contributions. Our programme is a programme that will both increase resources and incentivise secure employment, and side with labour and productive forces.
*What is the message you attach most importance to as the poll draws near?
There are tasks that fall to all of us to enable us to take this sharp bend safely. Regardless of how we take this bend, we will continue to struggle to construct a democracy founded on the values of freedom, equality, peace and secularism. Change of such magnitude has started in Turkey that nobody can now stop this change.
It will be worse than 2001
*Many large companies are restructuring their debts. Bankruptcies are said to be in the offing. Are we experiencing a crisis similar to 2001?
All crises resemble one another in a way. Current-account deficit, high foreign debt and excessive construction. All consequences of the economic structure set up by this governing party. If, this time, we roll over the precipice, it will be tougher than 2001. As opposed to 2001, this time companies and millions of people are indebted. This time, there will not only be blockage in the arteries, there will be a blockage that will spread into all the capillary vessels of the economy. We must halt the rush to the bottom.