June 1, 2023

While the economy is always seen as the most prominent of Erdogan’s electoral problems, this is largely not true.

Many of Erdogan’s critics forget the very bad situation of the Turkish economy before the Freedom and Justice Party assumed power, as the Turkish lira was the lowest currency in the world in terms of value, as the dollar was equivalent to about one million and 350 thousand pounds, and less than that at times before the monetary and economic reform that took place. The party has done.

They also ignore that Turkey has gone through a series of successive crises over the past years, such as the tension with Russia over Syria, then the failed military coup attempt and terrorist operations, especially those that took place in Istanbul, and the tension with America, and finally the Corona pandemic, and the Ukrainian crisis, many of which weighed heavily on Most of the countries of the world, especially that Turkey is a tourist country, are severely affected by such crises.

On the other hand, the Turkish economy performed the best among the G20 during most of the pandemic, as it achieved the highest growth among the G20 countries after China.

This was achieved through highly flexible management of the pandemic represented by strong health care, and flexible but firm closures at the height of the pandemic targeting mainly non-working groups such as the elderly and students, while providing full care for the elderly and keeping the economy open, especially tourism, and then implementing almost complete closures only on long holidays. For most citizens and residents, but not for tourists, to stop the spread of the disease while maintaining tourism, which led to a large infection rate, but a low death rate, and this is similar to the German model in dealing with the pandemic, but without major closures, as implemented by Berlin.

Turkey was also a major source of health and medical products during the pandemic to the countries of the world, while most Western countries suffered from a shortage of masks and other medical supplies, which China prevented from exporting for a while.

As for the lira crisis, which was the biggest problem for the Turkish economy (and the point on which his opponents are betting), Erdogan insisted on his refusal to raise the interest rate. So that it does not affect economic growth, workers and companies, and most of the world’s economists, and many of his country’s economists, disagreed with him.

Erdogan went ahead with historical interest cuts on the Turkish currency, while providing guarantees to those who keep the lira in banks to compensate him if it declines, and this led to a reduction in interest from more than 20% to less than 10%, which is a historic achievement for the economy. Because high interest rates are a spiral from which it is difficult to break, slowing down economic activity and increasing the debt burden.

After the lira declined significantly at the beginning of last year and before, the Turkish currency has recently stabilized despite the effects of Ukraine’s economic crisis and the blows it received from many strong currencies during the last period, including the euro, the pound sterling and the yen.

As for the repercussions of the large depreciation of the lira on the purchasing power of citizens, Erdogan has dealt with it through a large increase in wages, which was represented by three increases to the minimum wage in two years, which brought it to about $ 450, which is the highest in the history of Turkey and exceeds many Eastern European countries such as Romania and Hungary, and if taken into account The purchasing value of the dollar, its value may probably increase, because Turkey is cheaper. Indeed, the Turkish per capita GDP according to the purchasing power of the dollar in the country (which is the most accurate measure) is greater than Greece and slightly less than an advanced Western European country such as Italy, according to a report by the International Monetary Fund. for the year 2023 “IMF”.

All this was achieved with significant growth and a remarkable increase in exports and tourism thanks to the reduced interest, which is managed in favor of the productive economy, and despite some expectations of the possibility of a limited depreciation of the lira after the Turkish elections, but it will not likely be significant; Because the economy has passed the stage of worrying about this issue.

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