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Since Turkey’s Justice and Development Party has been in power, social welfare has been an important tool for the government. And recipients of that aid, says an analysis by the Al-Monitor news site, “have become an important element in the AKP’s electoral force.” So perhaps it was not surprising that in the run-up to presidential and parliamentary elections, President Recep Tayyip Erdoğan’s party authorized a new $5.5 billion social benefits package. But Turkey’s economy is heading into troubled times, and analysts expect Turks will eventually pay dearly for the injection of so much new cash into the economy. A key question is whether the largess can even gain the AKP traction against a united opposition. “It’s economic populism on steroids, and it indicates Erdoğan and the AKP are exhibiting growing signs of panic,” says Fadi Hakura, head of the Turkey Project at Chatham House in London. “The $5 billion package announced by the government … may solidify its voter base,” he says. “But I don’t think [it] will be able to attract wavering voters that are now moving to the opposition camp.”
At the end of April, and despite Turkey’s economic malaise, President Recep Tayyip Erdoğan’s ruling Justice and Development Party authorized new twice-yearly payouts of 1,000 liras, about $225, to retirees.
The payouts are part of a social benefits package worth more than $5.5 billion, widely regarded in Turkey as a transparent election ploy by the AKP ahead of a hotly contested June 24 vote.
But not everyone is impressed.
Mehmet, a pensioner with gray hair and a goatee, says he’s happy to receive the retiree bonus, but adds the “election bribe” will not erode his support for the opposition.
“The government is nervous, afraid it might lose,” says Mehmet, who asked that a pseudonym be used amid tensions in Turkey’s polarized society.
The bonus “is good and it definitely helps, but it’s not going to change where Turkey is heading, its future,” he says, speaking above the cacophony of tweeting parakeets inside his wife’s Istanbul pet shop. “In this day and age, who doesn’t want free money? It won’t change my vote.”
For some analysts, the irony is not lost that the government largess is meant to affect an election held 18 months early to protect Mr. Erdoğan and the AKP from the anticipated political fallout from a declining economy in the presidential and parliamentary vote. The move signifies a degree of panic, they say, and appears to be a calculation that the price of victory is worth digging the country even further into a fiscal hole.
Analysts expect Turks will eventually pay dearly for the injection of so much new cash into the struggling economy. In April and May alone, the Turkish lira fell 24 percent against the dollar.
'Growing signs of panic'
But another question is whether the handouts can even gain the AKP traction. The party has ruled Turkey relatively unchallenged since 2002, but polls show that a united opposition might disrupt the AKP’s majority in parliament, and that Erdoğan may be forced into a surprise second-round runoff.
“It’s economic populism on steroids, and it indicates Erdoğan and the AKP are exhibiting growing signs of panic,” says Fadi Hakura, head of the Turkey Project at Chatham House in London.
The president and AKP emphasize achieving high growth rates – such as 7.4 percent GDP growth last year – while ignoring that Turkey’s economy can’t sustain such growth, he says.
“If that means pumping five-plus billion dollars into an overheated economy, then so be it,” says Mr. Hakura.
“Erdoğan wants Ferrari growth rates with resources equivalent to a mid-size Audi,” he adds. “It temporarily can reach Ferrari speeds, by spiking the gas and playing around with the engine, but ultimately the car will overheat and break down, and that’s something Erdoğan and the ruling party does not seem to appreciate or understand.”
Pro-government media praised the AKP’s “election package” as “good news for 81 million” – every person in the country. But one antigovernment newspaper noted that the AKP after 16 years of rule had “not abolished poverty,” and yet announced the spending surge ahead of elections. Another declared: “Favors for the bosses; bribes to the public.”
The International Monetary Fund warned on April 30 – the day the AKP rolled out its pre-election benefits plan – that Turkey’s economy is “showing clear signs of overheating,” and that monetary policy “appears too loose.”
Yet Prime Minister Binali Yıldırım promised that same day to find the cash by a host of measures, from re-zoning 13 million buildings to aspirations of an increase in tourism this summer.
“We have no issue with the funding of this package,” he stated.
For AKP, welfare a key tool
Opposition parties have also made big, unaffordable promises, with the main opposition Republican People’s Party (CHP), for example, suggesting that bonuses for pensions be raised 60 percent on top of the AKP payment, to make it level with a monthly minimum wage.
But even though only the AKP is in a position to deliver tangible cash benefits before the vote, the impact is not clear.
“It will be effective among a certain group, like the bottom of the social-economic ladder,” says Mehmet in the pet supply shop.
Mehmet doesn’t count himself among the needy. But his family, which in the past ate red meat once a week, can now only afford to do so once a month. Prices keep rising, but not salaries – a fact that forced him from his profession four years ago.
The welfare state has expanded quickly throughout the AKP era. Family Minister Fatma Betül Sayan Kaya said the AKP had created a “silent revolution,” with social assistance expanding 23-fold, from 1.4 billion liras in 2002 to 39 billion liras in 2017.
The new AKP election package weighs in at a further 24 billion liras.
“Ever since the AKP came to power in 2002, welfare assistance has been the strongest card of the government, enabling it to connect with various sectors of society from children, students and the elderly to the handicapped and the jobless,” the online news site Al-Monitor wrote in an analysis. “Recipients of such aid have become an important element in the AKP’s electoral force.”
That is no surprise to Mahmut Karaman, a real estate agent and AKP supporter on the Asian side of Istanbul.
“There have definitely been more [pre-election] promises than before, and some – like the pensioner payouts – should have been done before. They waited to the last minute,” says Mr. Karaman, adding that customers have far less money and less motivation to buy or rent these days, amid the economic uncertainty.
Chatham House’s Hakura, who predicts Turkey will face a “major economic crisis” within five years if it does not re-tool the economy, says Turks “are attuned to populist economics pursued by various political parties at election time.”
“The $5 billion package announced by the government … may solidify its voter base,” he says. “But I don’t think [it] will be able to attract wavering voters that are now moving to the opposition camp.”
Still, many believe in Erdoğan
But there are many AKP true believers, despite the current downturn.
“I’m one of the people who suffered most. All our business is in dollars, but I am not at all disturbed,” says Osman Şahin, who runs his family’s coffee company and remembers when, as a boy nearly 20 years ago, Erdoğan patted his head while his father sacrificed a sheep for Erdoğan, who was then-mayor of Istanbul.
Mr. Şahin says the cost of raw materials has doubled, forcing him to raise prices. He employs 150 people.
“We truly believe in Erdoğan,” he says. “He’s really a person who has done some good.”