One would think that those who ask “Crisis? What crisis?” would soon realize that the magicians who turn stones into gold are the stuff of fairy tales. But I would not bet on this: too much of this society is in the grip of a very serious disease called fanaticism.
When the elections are over, regardless of who has won, we will find the following picture before us:
We have been completely deprived of the Rule of Law and the notion of justice.
Our education system is moving backwards.
We are farther away than ever from joining the European Union.
We have significant problems with refugees.
State positions filled with without regard for merit are unable to serve the public.
The middle class has vanished because of a gradually deteriorating income distribution.
We are facing a 100 – 120 billion dollar earthquake and disaster bill.
We will need to modernize 6.5 million houses (for earthquake preparedness).
We are putting new burdens on the budget, which is expected to reach a deficit exceeding 5 percent of the GDP.
The Central Bank’s net reserves, excluding swaps, are around negative 40-45 billion dollars.
Our foreign debt stock has reached around 450 billion dollars.
How to liquidate the Wealth Fund, whose liabilities are unknown, is a problem in itself.
An inflation rate of around 50 percent (probably twice as high in reality), with a consumer community that contributes negatively to inflation, because it constantly escapes depreciating money by spending the money it receives, rises like a mountain before us.
There is a huge burden of currency-protected deposits that needs to be liquidated.
We have a large (read: real) unemployment rate of around 22 percent.
We have a current account deficit of around 5.5 to 6 percent of GDP, of which we are trying to finance the half with money of unknown origin (a significant portion of the net errors and omissions item).
The country’s risk premium (CDS premium) has risen above 500 basis points (above 300 basis points is considered extremely risky.)
We have to bear the cost of a dollar interest rate that has reached 10 per cent in foreign borrowing.
There are unbelievably inflated house sale prices and hyped up rents.
The banking sector does not know what to do, due to new regulations and verbal instructions, issued every day.
Foreign capital is not coming into the country, except for house purchases or portfolio investments.
The low central bank policy rate, which is the source of many problems, cannot be corrected quickly, because it is set well below inflation.
Spending promises that seem impossible to keep have been made and continue to be made (most recently the pledges of free natural gas to households).
There are many more problems to be added, but I think even these are enough to show what kind of a dead end awaits this country after the elections.
We have experienced three major crises in Turkey starting from 1980. The 1980 foreign exchange crisis, the 1994 crisis caused by keeping interest rates below inflation, and the 2001 banking crisis.In addition to these, we have also seen the effects of external blows such as the 2008 global crisis and the pandemic crisis.
The crisis we are going through today is unlike any of these crises.
First of all, people do not realize that there is one. If you say there is a crisis, they ask “Crisis? What crisis?” They refer to the spending spree in shopping malls, intense traffic on the roads, full restaurants and cafes, and the number of people going on holiday.
A similar situation is observed in Argentina, which is right in the center of its own crisis. The peak in consumption, fueled by the flight from the constantly and rapidly depreciating national currency, is perceived as a sign of prosperity.
Not recognizing the disease is the most dangerous part of it.
In previous crises, we were aware of the disease, and with the support of IMF programs, we managed to cure it in a short time by taking measures. Since we are not aware of the disease our job this time is much more difficult.
Moreover, in addition to our economic straits, this time there is a crisis that lies beyond the economy.
Nobody wants to listen to the facts. Instead they wait for a miracle to come along and save the system: oil and natural gas reserves will be discovered, the Gulf countries will give us money… we can mine minerals “with the expiration of the Treaty of Lausanne.”
In a society waiting for a miracle, there is no end of buyers for these dreams.
One would think that those who ask “Crisis? What crisis?” would soon realize that the magicians who turn stones into gold are the stuff of fairy tales. But I would not bet on this: too much of this society is in the grip of a very serious disease called fanaticism.
This article was translated by FTP from Mr. Eğilmez’s blog.
The views and opinions expressed above are the author’s and do not represent those of the Free Turkish Press.
