Tomatoes and pomegranates have experienced the same price increase. It has to do with the higher cost of transporting them from the south of Turkey to Istanbul. “Gasoline, labor costs, everything has become more expensive,” says Azat. For a long time he tried to keep the price low, but now he had no other choice. “I had to.”
A young woman, a civil servant at the municipality, leaves the lemons. “It’s just too expensive,” she says. “They say we should eat vitamins right now because of the pandemic, but who can afford it?”
Turks have the lira crisis of 2018 still fresh in their minds. A trade war with the United States then led to a currency crisis. Foreign investors lost faith in the Turkish government. Purchasing power fell sharply, the government sold subsidized vegetables, fruit and bread on the street.
Conflicts lead to a decline in confidence
This year it is also diplomatic quarrels that have not helped the lira. Erdogan is at odds with the EU over gas and oil discoveries in the Mediterranean; a conflict with Greece over maritime borders that is running high. Erdogan has been criticized for Turkey’s involvement in conflicts in Libya, Syria and Nagorno-Karabakh. Brussels previously threatened with sanctions; this week the call for an arms embargo.
It reduces confidence in the currency. In addition, doubts about the independence of the central bank, which also played a role in the crisis of 2018, have not disappeared. For years it has been believed that the bank’s boss cannot do anything without the president’s consent.
“President Erdogan is someone who does not like to listen to others. We see him as a leader who believes only his own truths,” said economist Selcuk Gecer. “That has led to a wrong economic policy, which is now heading for an unprecedentedly deep economic crisis.”
The fact that Erdogan put the bank manager on the street when the lira had fallen to a record low does show that the crisis is now being taken seriously, says Gecer. “Economic problems lead to the loss of voters. After the previous crisis, the opposition won the largest cities in the country. That had everything to do with the economy. Erdogan is certainly aware of that.”
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