Suphi bear the heavy weight of his shopping. Several kilograms of potatoes, tomatoes and onions, the father of a family in one of the mobile stalls, picked up, built up since a few days in Istanbul and Ankara. The government makes fruit and vegetables to sell at prices that are far lower than those in the supermarket. President Recep Tayyip Erdogan wants to end the “Terror” of the rise in food prices, and before the local elections in March, points. However, if the state is to the vegetable grocer, then things must be bad.
Also, Suphi is dissatisfied. He has to use money saved at the vegetable cart on Istanbul’s Taksim square, to the employees of the municipality to the customer. “But you have to be standing in line to buy vegetables, it’s not pretty,” he says. Some of the customers must be sent to the state sale several hours stalls have to wait. After years of economic upturn, the Turks had actually thought that such times would be over.
The fruit and vegetable prices have risen sharply because of the devaluation of the Lira has risen in the past few months, the seed, pesticides and the transportation of the goods from the fields to the consumer. Also severe weather in the growing areas contributed to the price increase: In January, food in Turkey were more than 30 percent higher than in the previous year. Overall, Inflation is at 20 percent. Erdogan is between the dealers, the debt: “We are those who teach a doctrine which spread the food terror,” says the President.
critics of the government, however, speak of a fundamental crisis in Turkish agriculture, which had been weakened in recent years by ill-considered privatisation. The price of land to rise to stop of agricultural products, want onions, the government is also more grain and meat import – that in turn will hurt domestic suppliers.
Erdogan against increase in interest rates against Inflation
Long years had rates of economic policy, the figurehead of the Erdogan government: a fairy tale growth, a construction boom, huge infrastructure projects like bridges and airports, as well as a new level of prosperity for millions who could afford to suddenly own apartment and a car. However, Ankara has funded the recovery in the years of low global interest rates, cheap credit, and government-related corporations drop billions in government contracts. Rising interest rates, tried to government intervention in the work of the Central Bank and domestic political conflicts have the consequence that many investors from Turkey to turn away. Tensions with the United States accelerated the fall of the Lira.
Because Erdogan railed publicly against an increase in interest rates to combat Inflation, so they were the guardian of the currency, under pressure from the President to September, with the increase in the key interest rate to 24 percent. In the meantime, the exchange rate of the Lira has recovered somewhat. However, each of the markets as the hasty-rated reduction in interest rates could bring the currency into trouble again. According to a survey conducted by the Agency Bloomberg with economic experts, the Turkish interest rates will remain until the end of the year at a level of about 20 percent. For many companies this means additional difficulties. Even solvent firms do not invest more, because they can’t afford loans. Unemployment and private debt are rising, the high lending rates and cuts in government spending in the construction industry. Consumer confidence has suffered, many avoid major purchases. Sales of new cars broke within a year by almost 60 percent.
For Erdogan comes at a bad time. His government party, the AKP, have to fear at the municipal election in the capital, Ankara, to the majority; in Istanbul, the AKP has also problems. In a new survey, 70 percent of voters said they were with the economic policy of the government dissatisfied.
Turkish companies on foreign currency debt of more than $ 200 billion. Some of the prestigious projects of the government are to billion tomb. Delays in the commissioning of the new Istanbul airport, for example, mean that the state must pay the companies a lot of money: Instead of the contractually stipulated six to seven million passengers, the new airport had been used to act in January, only 90 000 travellers. Financial, politically, Ankara is in a quandary. In view of the value of the Lira, the Finance Minister, and Erdogan has decay son Berat Albayrak-in-law, set out the government’s strict spending discipline. Therefore, the money for generous spending programmes are missing.
But measures such as early Central Bank Transfers, or the state’s vegetable sales would not have the desired effect, said economist Emre Deliveli: “The government will have to go to the International monetary Fund.” Erdogan has been seeking help from the IMF excluded. However, an IMF program is not only fresh money available, but is the strength, the confidence of the markets – then what the credit rating upgrade, argues Deliveli.
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Whether or not the state vegetable stands for Erdogan can bring about a boost in the election campaign, is also not sure. Mehmet, who runs the store in the vicinity of Taksim square, a vegetable, says quite clearly: “The ACP I choose” – although he was for ten years a member of Erdogan’s party. Mehmet has to buy his tomatoes on the market for 75 Euro cents a Kilo, but the state vegetable trade offers them for 60 cents to the consumers.
