Agricultural Turkey rapidly becoming importer of farm goods

MUSTAFA SÖNMEZ – Hürriyet Daily News, December/15/2014
Inflation is continuing to be a major issue for Turkey; consumer inflation at the end of 2014 will be between the 9 and 10 percent band. The biggest headache in inflation is food inflation, with steep hikes in food prices being the biggest complaint of the low and middle income classes, which constitute the predominant segment of the population. The reason for this is that kitchen expenditures constitute 35-40 percent of the total budget of this segment.

Also with the onset of a drought this year, the prices of certain vegetables and fruits have become non-affordable. It is an accepted opinion that agriculture is being neglected and adequate support is not being provided for agriculture from the general budget. As a result, Turkey, which used to boast that it was self-sufficient, is rapidly becoming a food-agriculture importer. It is experiencing “food supply insecurity,” alongside energy insecurity.

Turkey has a significant and major agricultural potential. According to Turkish Statistical Institute (TÜİK) data, as of end of 2013, there was 38.4 million hectares of agricultural land, 14.6 million hectares of which grassland, with the remaining 23.8 million hectares being used for agricultural production. There is still an important agricultural potential in Turkey despite the rapid loss of farm land in favor of residential and industrial developments. However, the agriculture sector, where 20 percent of the active population works, has not been modernized. The agriculture sector’s growth rate in 2013 was 3.5 percent; its share in gross domestic product was 7.4 percent. In 2014, there will be no growth in agriculture; instead, there will be a shrinkage – albeit of 1 percent, meaning agriculture’s share in the national income could even stay at around 7 percent.




Although the agriculture potential is so high, food in Turkey is among a number of hard-to-obtain goods, as some food products have seen some of the highest price rises. The food sector stands out in consumer inflation; as of November, their annual price hikes reached 14 percent, while the “producer prices” of industrialists in the food sector have increased nearly 19 percent. This also means there will be new price hikes in the coming days for the consumer in food.

The prices of fruit and vegetables, especially the prices of legumes, has followed a very high course together with the effect of a dry season. Industrialists who process fruit and vegetables and produce such products as tomato paste, jam, canned goods and packaged legumes have increased their prices nearly 57 percent in the past 12 months.

Similarly, the monthly price hikes of those firms selling salami, sausages and packaged meat goods are close to 17 percent in the past 12 months.

Dairy producers who produce products such as milk, yogurt, butter and cheese, on the other hand, have raised their prices more than 14 percent in the past 12 months, exceeding the producer price index (ppi) by six points. While the flour industry and vegetable/animal fat producers increased the price of the fat they have been producing by around 9 percent, not going below the average ppi, it is also seen that the price hikes of bakery goods have also remained above the average.


One of the most important reasons for the high price increases in agriculture is the extreme abuse of prices by middlemen between the producer and the consumer. The extensive differences between the prices in the field and the prices on the counter never decrease, and public authorities cannot introduce an effective control/regulation over them.

There are major differences between the producer prices of agricultural products in October 2014, as TÜİK has monitored, and particularly the prices the consumer pays, which TÜİK also monitors as part of its Consumer Price Index. According to this, in agricultural products, especially ones that have low supply, in other words low production because of the drought, the price difference between the field and the counter varies between 150 and 200 percent.

According to TÜİK findings, this difference has reached 200 percent in citrus fruits. For instance, one kilogram of lemons in the orchard is 1 Turkish Lira but when it reaches the counter, this price becomes 3.5 liras, making the difference in between almost 257 percent. Mandarin oranges, which are 70 kuruş in the orchard, are being sold to consumers at 2 liras, a difference that exceeds 200 percent. While locally grown bananas are sold for lower than 2 liras in the orchard, its counter price is 5 liras, a 180 percent difference.

One of the most consumed vegetables, the tomatoes had the producer price of 1.2 liras in October 2014, while it was sold at the counter for a price of 2.5 liras, a 110 percent difference.

When the food supply is inadequate, naturally, prices climb and food inflation pulls the general consumer inflation upward, and it looks as if fighting it is not so easy. One way to counter this is – even though its cost is not low – is importation. With the resort to vegetable and animal product imports, officials are increasing supply in an attempt to curb inflation. While it once boasted that it was self-sufficient, Turkey has now become a food importer in recent years with its food importation in the first nine months of 2014; during the January-September period, the figure neared $11 billion. While in the first nine months of 2013, $9.9 billion in food imports were conducted, this year’s exports exceeded $10.6 billion. Despite the dollar exchange rate climbing more than 20 percent in one year, the fact that food imports rose 6 percent instead of decreasing highlights the dependency in food.

The most important factor in the increasing dependency on food imports is the negligence of the food and animal husbandry sector.

For example, agriculture experts have drawn attention to the fact that animals in Turkey have fallen from 85 million to 41 million in 30 years. With the effect of policies downgrading animal husbandry, the extraordinary hike in meat prices which started in 2010 cannot be curbed.

The Justice and Development Party (AKP) government that decided to control the hike in meat prices with imports, subsequently decided on April 30, 2010, to allow the import of live animals and meat. The import of red meat, which was banned as of 1996, has restarted. After the permit to import, almost 4 million cattle, sheep and goats entered the country, with the bill in foreign currency exceeding $4 billion.

HDNLivestock processors such as Banvit and Koç stopped production on grounds that there was no opportunity left for locally produced meat to compete with imported meat, thus making the animal husbandry sector further dependent on imports.

Several studies and analyses show that one of the most strategic sectors of this century is agriculture and will continue to be so. Once more, the crucial importance of agriculture politics for countries has been proven. To meet the food needs of the world population, which is expected to exceed 9 billion by 2050, current agricultural production should be doubled. In the past decade, even though demand for food increased 20 percent, food production capacity only increased 8 percent. Obviously, food supply is not meeting the increase in food demand, resulting in the growth of the food supply problem.

Turkey’s population has increased 30 million in the past 30 years. It will be 85 million in 2023, 100 million in 2050. Turkey’s agricultural policies should be reviewed and shaped. For this, more protection for agriculture is needed, such as the support it deserves from the general budget, but the reality if just the opposite.

The share of agricultural support payments should be a minimum of 1 percent of the national income, according to a law from 2006. But in practice, this was not applied. Transfers from the budget to support agriculture were around 0.5 percent and 0.6 percent. In the 2015 program, the amount allocated for agricultural support was 10 billion liras. This is 5/1000th of the gross national product – a woefully inadequate amount.

If the law had been applied since 2007, the resources allocated for agriculture would have neared 100 billion liras in the 2007-2014 period. It did not happen. Agricultural support in these years remained at 55 billion liras. Thus, about 45 billion liras have not been channeled to agriculture, despite the law. The consequence of the support that was not allocated has come back to bite in the form of a decrease in production, erosion in agriculture and dependency on imports.

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Who wins and who loses as crude oil prices plunge?

Mustafa Sönmez – Hürriyet Daily News, December 8 2014

With the crude oil barrel price falling as low as $80, the benefits that energy-importer Turkey will enjoy are being exaggerated, as the country’s overall energy bill is climbing rapidly.
The average world price of crude oil per barrel, which was around $112, has fallen to around $70 within a couple of months, and questions such as “Why did this happen, who will win, who will lose?” have started to be asked more frequently. In the OPEC meeting held the other week, no decision came out about restricting production to curb the fall in prices. Immediately after the meeting, the price went down to $68, its lowest level in the past four and a half years. Talk is that oil barrel prices may even go below $60 in the first half of 2015.








One scenario for why the price of oil has dropped is as follows: “Against the United States’ energy investments, this is the defense of the Arab world.” The U.S. oil industry’s initiatives in areas such as fracking, hydraulic-fracking and tar sand oil extraction are causing concern for oil exporters. At the top of the concerned countries are oil producers and exporters such as Saudi Arabia and Gulf countries, the economies and orders of which are based on the U.S.’ dependency on oil. Developments force them to not only take defensive measures, but also counterattack.

While the U.S. was importing 60 percent of its energy consumption in 2005, today this rate has gone down to 21 percent. Economic shrinkage is also effective in this drop, but the main reason is that the U.S. has increased its energy production. With new oil fields and new techniques, the U.S. has increased its daily production of petroleum liquids to 7.5 million barrels. In 2020, the production is expected to reach 14.2 million barrels. In this case, U.S. production will exceed the production of Saudi Arabia and Russia. These developments affect the equilibrium of the energy market.

Saudi Arabia and Gulf countries continue to lower prices to protect their markets. An answer to the question, “But to what extent?” is as follows:

The decision-making countries in OPEC are defending themselves by lowering the price of crude oil below $80 per barrel, which is considered to be the “break-even price” of American companies that operate in hydraulic-fracking. In other words, it is the limit for them to continue production profitably and exporters will continue to lower prices.

Associating the price fall with political motivations is the second scenario that attempts to explain the sharp fall in oil prices. According to this scenario, the U.S. and Saudi Arabia-Gulf countries are lowering oil prices to put pressure on Russia and Iran, which have taken the role of global and regional players. It is being argued that by lowering prices, a blow is made to their most important economic resource: oil.

Russia has lost nearly $100 billion this year because of oil prices; its economic growth, for this reason, is not expected to exceed 0.5 percent.

Meanwhile, this move by the U.S. and its allies is highly beneficial to energy-addicted countries such as Japan and China.

At 18 percent, the trade of fossil fuels accounts for a significant amount of world trade volume. According to World Trade Organization (WTO) data, these commodities have a more crucial importance in certain regions. For instance, in 2011, global exports reached more than $17 trillion, of which energy products accounted for more than $3 trillion, a share of 17.8 percent.

Energy is vitally significant in certain regions. For example, Middle East countries, which have a 7 percent share of world exports, accomplish two thirds of their sales through energy products. The Russia-led CIS has a 4 percent share of world trade, owing nearly 60 percent of it to energy. With $750 billion, Africa has a 3 percent share, 55 percent of which belongs to energy.

It is apparent that regionally, the Middle East, CIS and Africa, which obtain between 55 and 66 percent of their income from energy, will be hit by the fall in oil prices. Not every country in the Middle East will be hurt equally. Saudi Arabia and some of the Gulf States are resilient to this decrease, but the same does not go for Iran and Iraq. It is a reality that Russia has taken a heavy blow because of the fall in energy prices.

Dominant blocks and energy

It would be best to take a look at wealthy countries and country groups to see how they would be affected by the fall in energy prices. The European Union’s energy import bill for 2011 exceeded $992 billion. The EU has an exportation of $451 billion. In the end, the EU is a net importer of energy worth $541 billion.

The EU obtains 33 percent of its energy imports from within, 8.5 percent of which comes from Norway. The EU supplies nearly 28 percent of its energy demand from the CIS. Africa has a share of 12 percent and the Middle East around 10 percent.

The U.S.’ annual energy import bill is $464 billion. But it also has an annual exportation of nearly $130 billion. It is a net energy importer of $330 billion annually.

ffThe U.S. obtains 23 percent of its energy imports from Canada and about 10 percent from Mexico. It also imports 16.5 percent of its energy from both Africa and the Middle East. Russia has a nearly 6 percent share in the U.S. market. The U.S.’ annual energy bill of around $300 will indeed decrease with the drop in prices.

Two powers that will be positively affected by the price fall are Japan and China. Both of these two giants import energy worth $275 billion every year. They will probably benefit from price falls with low inflation, high growth and a strengthened current account balance.


On the other hand, with the crude oil barrel price falling as low as $80, the benefits energy-importer Turkey will enjoy from this are being presented in an exaggerated fashion. Turkey’s crude oil and natural gas consumption has rapidly increased over the past few years and in association with world price movements, the bill which was $8 billion in 2003, became $36 billion in 2013. The total energy bill combined with coal and other energy imports climbed to $54 billion in 2013, and its share in total imports to 21.5 percent. Of total imports, the share of crude oil and natural gas imports rose to 14 percent in 2013, after coming in at 11 percent in 2003.

In the period between 2003 and 2014, Turkey’s average crude oil bill has been $11 billion annually and its natural gas bill $13 billion, accounting for an average total of $24 billion annually. This corresponds to an average of 13 percent of Turkey’s imports yearly.

According to Turkish Statistical Institute (TÜİK) data, in 2013, when the crude oil barrel price was $110, Turkey’s crude oil and natural gas bill was $36 billion and it had a 14 percent share of the $252 billion total imports.

In the first nine months of 2014, the bill for crude oil and natural gas has reached $25 billion, with the average crude oil barrel price being $107 during the first nine months of the year. By the end of 2014, the bill is expected to be $32 billion. This would mean a decrease of only $4 billion in the oil-natural gas bill, even at the expected growth performance of 3 percent.

Despite this, when it comes to the consumer, there is no question of a decrease in gasoline-diesel, natural gas or electricity bills. Electricity and natural gas prices were increased by 9 percent at the beginning of October.

There is no decrease in gasoline and diesel prices to the extent experienced in the world because of the concern in Turkey that the indirect taxes collected over petroleum products would decrease.

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Redaksiyon Dergisi’nin Kasım 2014 sayısına  verilen Röportaj  (Söyleşi:Aslı Aydın)

Soru: Önce Soma sonra Torunlar… İş cinayetlerinde artık rakamlar korkutucu boyutlara ulaşıyor. Yetersiz düzeyde işçi sağlığı ve güvenliği tedbirleri olduğunu biliyoruz, ancak bu tedbirlerin hala sağlanmıyor oluşu, ölümler pahasına inşa edilen bir düzenin varlığından söz ettiriyor. Önce bu düzeni, yani AKP’nin “yeni” emek rejiminden bahsetmekle başlayalım mı?

Mustafa Sönmez- Bunun AKP’ye özgü bir emek rejimi olduğunu söyleyemeyiz. Bu, neoliberalizmin koyulaştırılmış emek sömürü rejimidir. En az ödeyerek en fazla artığı elde etmek… Bunun için işçiyi örgütsüz tutan, ant-sendikal bir yaklaşım, işçinin yasal bütün haklarını budamak, onun işverene maliyetini -vergi ve sigorta primi gibi maliyetler dahil, tüm maliyetler- en aza indirip kâr oranını olabildiği kadar yükseltmek… Bu rejim, 1980 sonrası Türkiye’de ve dünyada her yerde uygulanmak istendi ve isteniyor. Direnen ülkeler, yapılar var, direnemeyenler var. Türkiye’de direnişin beli 12 Eylül ile kırıldı. DİSK kapatıldı, Türk-İş 12 Eylül’e payanda yapıldı, Anayasa’da örgütlenmenin, toplu sözleşme, grev hakkı fiilen kullanılamaz hale getirildi. İşçi, işçinin kurdu yapıldı. İthalat daha çok libere edildiği için içerideki işverenler, “verimlilik, rekabet gücü” sağlamak adına işçinin ensesinde daha çok boza pişirmeye başladılar. İthalatın kontrollü olduğu ithal ikameci dönem pek öyle değildi. Hem özel sektörde hem devlette işçilerin örgütlenmeleri, hatta toplu pazarlık yapmaları bu kadar sıkıştırmıyordu işverenleri. Dış dünya ile entegrasyon, kıran kırana rekabet, patronları anti-sendikal duruşa adeta zorladı da ve siyaset, bunun iklimini yarattı 12 Eylül ile ve bu kurumlaştırıldı 1982 Anayasası ve onun çerçevesinde çıkarılan yasalar ile. AKP, bu rejimi miras aldı ve birçok şeyde olduğu gibi, müellifi Dünya Bankası-IMF’nin tam da isteğine uygun icra etti.

Son çıkan torba yasa ile AKP’nin taşeron çalışma biçiminde ısrarının devam ettiğini görüyoruz. İş cinayetleri ile özellikle toplumda büyük bir tepki oluşmuşken niye taşeron çalışmaya AKP bu denli ihtiyaç duyuyor?

-AKP, önceki hükümetlerin yarım bıraktığı neoliberal inşayı tam gaz, tek parti olmanın sağladığı avantaj ile, dış dünya konjonktürünün taşıdığı elverişli rüzgarlarla sürdürdü, sürdürmeye çabalıyor. Başlatılan ve AKP rejimine devrolan süreçlerden biri özelleştirmelerdi. Özelleştirilmek için tezgaha çıkarılan ve özelleştirilmeye hazırlanan kuruluşlarda en önemli şey, personel kalemini cazip tutmak. Bunun için daha devlet elinde iken esnek emek rejimine geçişin hazırlıkları yapıldı, özelleştirme sonrasında ise işverenler kesme-biçme işine girişip tensikatlara, sendikasızlaştırmalara, esnek rejim uygulamalarına geçtiler. Madenler bunun tipik bir örneğidir. Kamuda iken madenler işçilerin en örgütlü, dolayısıyla sosyal hakların en iyi durumda olduğu kurumlardı, iş cinayetleri de bu kadar yoğun olmuyordu. Özelleştirmeler sonrası ip koptu. Taşeronluk, neoliberalizm için emek maliyetlerini en aza indirmenin imkanını sunuyor ve ana kural değişmiyor; kâr ve sermaye birikimini azamileştirmek. İşçiler buna direnmedikçe, hem özelde hem devlette bunu hem işçilere hem beyaz yakalılara uygulamak ana kuraldır. Dünya rekabet kılıcı ensede çünkü ve biriktirmek zorundalar yoksa düşerler, adeta bisiklet üstünde pedal çevirmenin zorunluluğu gibi bir şey…
Taşeron çalışma şimdi kamuda bile var. Üstelik oldukça yaygın. İş cinayetlerinin dışında işçileri önümüzdeki dönem nasıl bir iklim bekliyor? Kimi görüşler yaratılan iklimini 19.yy’ın kölelik düzenine benzediğinden yana.

-Kamuda esnek rejim yine bir Dünya Bankası şablonu. Amaçlanan, kâr değilse de, sağlık, eğitim, adalet vb. kamusal hizmetleri en ucuza mal etmek, kamu hizmetlisini en ucuza çalıştırıp bütçeden personel gideri ve SGK primlerini, kamu bina ve alet-edavat giderlerini en azda tutmak, hatta hizmetin finansmanına hizmet alan yurttaşları da katmak… Bunu yaparsanız ,diyor Dünya Bankası, bütçeniz daha az açık verir ve bu sayede daha az kamu borçlanması, bu sayede de faizlerin düşük seyri ile bütçede faiz harcamaları da düşer ve sorunsuz bir bütçe ile sisteme müdahale imkanlarınız daha çok artar. AKP, mali disiplin adı altında 11 yıldır hep bu öğüdü yerine getiriyor. Bu rejimi, anlayışı, 19. yüzyılın kaba birikim rejimine benzetmek çok gerekli değil. Bunun başka türlüsünü kapitalizm yapamaz zaten. Buna ilkel birikim filan derseniz, o zaman hedef ilkel olmayan birikimi savunmak mı olacak? Kapitalizm bunu uygulamaya mecbur. Her yerde emekçi iliklerine kadar sömürülmek isteniyor ama bazı ülkelerde henüz izin vermiyor çalışan sınıflar, fark burada. Türkiye’de 12 Eylül ile birlikte zemin oluştu, toparlanamadı, örgütlenemedi, engel olamadı işçi sınıfı, diğer beyaz yakalı sınıf da aynı çarka kapıldı şimdi. Bundan vazgeçemezler. Taşeronlaşmayı, emeği en ucuza mal edecek her uygulamayı hem kamuda hem özelde deneyecek, bunun “yasal düzenini” inşa etmek isteyecekler. Kaçamazlar bundan, dünya rekabetinde de zayıflar, özürlüler, çok geriden geliyorlar ve rekabeti emek üstünden kazanmak istiyorlar.Ucuza memur,ucuza işçi, ucuza teknisyen,beyaz yakalı, öğretim görevlisi ana hedefleri.. …

Türkiye’de güvencesiz istihdama yani en düşük maliyetli istihdama ihtiyaç duyan sermaye birikimi bugün hangi alanlarda yoğunlaşıyor?
AKP rejimi 2003’ten bu yana dış para girişine dayalı içe dönük bir büyüme çizgisi izliyor. Düşük kur-yüksek faiz aralığından giren yabancı para, ağırlıkla konut-otomobil-eşya alımı için tüketici kredilerine, KOBİ kredilerine dönüşüyor, konut üretiminin başını çektiği bir çark döndürülüyor bu parayla, ithal ürünlerle dolu AVM’ler inşa ediliyor tüm yurtta. Burada inşaat çekişli bir büyüme, tüm sanayiyi, hizmetleri de şekillendiriyor. En çok iş cinayetlerinin yaşandığı inşaat zaten riskli bir işkolu ve arsa temini-imar izni kolaylıklarında öncelik alan, kayırılan AKP korumasındaki irili ufaklı işadamları bu kulvardan birikim sağlayarak rejimle bütünleşiyorlar. İnşaatın özellikle emek-yoğun aşamalarında hem düşük ücretli hem de iş güvencesizliğine ses çıkarmayacak örgütsüz emek istihdam ediliyor. Bunlar çoğunlukla ve geleneksel olarak Kürt emekçi gruplardan oluşuyor. Geleneksel çavuş ve onun hemşehrisi, akrabası, aşiretlisi Kürt emek grupları ve en çok da iş cinayetlerine bunlar kurban gidiyorlar. Keza, enerji, Türkiye kapitalizminin dışa bağımlı olduğu ithalatın dörtte birini oluşturan bir kalem ve burada da ithal ikamesine gitmek zorunlu hale geliyor,yerli kaynaklara dayalı enerji üretimi özendirilirken linyit yakan santraller ile linyit madenleri ilişkilendiriliyor ve linyiti en ucuza mal etmek için maden işçisini en ucuza sömürmek gerekiyor, hem de fazla iş güvenliği önlemine,aracına, yatırımına gitmeden. Enerji için HES’ler üstünden doğa da katlediliyor.

İnşaat,madencilik iş cinayetlerinin en yüksek olduğu ama aynı zamanda ücretlerin de düşük olduğu sektörler. Türkiye, ihracatta ancak ucuz emeğe dayalı sektörlerde “net ihracatçı”; yani ithalatı geçen ihracatı var. Bunlar da tekstil-konfeksiyon,gıda,deri, mobilya gibi sektörler. Bu sektörlerde de irili ufaklı birçok işyerinde, sendikasız, esnek çalıştırılan emek kitlesi var ve özellikle kadın emeğinin payı artıyor. Sağlık, perakende,eğitim, yine kadın emeğinin arttığı sektörler ve erkek ücretlerinin bir dilim altında hep ücretler…Kadınların toplamda yüzde 51’i kayıt dışı çalıştırılıyor, tarım dışında da toplam kadın çalışanların yüzde 30’unu buluyor kaçak çalıştırılan kadınlar…

Ekonomik getirisinin yanında havaalanı, köprü, kanal projeleri gibi bu yatırımlar üzerinde AKP’nin bu kadar durmasının sebebi ne?

İstanbul, AKP rejimi için tepe tepe satılacak bir “meta”. Dünya pazarlarına entegre olmada İstanbul’un taşı-toprağı, lojistiği, doğal ve tarihi varlıkları paraya tahvil edilmek siteniyor 1980 başlarından bu yana. Bunu en hunhar ve barbarca yapan AKP. İstanbul’un rantı en yüksek kısımlarını, bir kısmı rüşvet biçiminde kendisine dönen inşaat yatırımlarına açıktan sonra sıra İstanbul’un kuzeyine, ormanlık alanlarına, su havzalarına geldi. Burada 3.köprü,havaalanı, kanal vb ile devasa bir iç yatırım alanı açıyor yandaşı sermayedarlara. Bunlar kamu yatırımı gibi ama Kamu-Özel Ortaklığı isimli, neoliberalizmin yeni bir imtiyaz sistemiyle hayata geçiriliyor. Kamu, arsayı sağlıyor, finans temin etmede güvenceler veriyor ve bitişte hizmeti almayı taahhüt ediyor; karşılığında yapımcı yerli-yaabancı firmalara tesisi 49 yıllığına işletme hakkı tanıyor. Bu tür projeler, özellikle yandaş sermayedarın partner olduğu yatırımlar. Dolayısıyla AKP’ye rüşvet biçiminde geri dönüşleri olan, yandaşları iyice güçlendiren projeler. Tükenen inşaat pazarına soluk penceresi olacak projeler…

Yağmaya, talan ve daha katı bir sömürüye dur demek için nasıl bir mücadele örmek gerekir?

-Neoliberal rüzgar ile kırdan kente göç hızlandı, nüfusun dörtte üçü kentlere yığıldı. Bu, konut talebinin artması demek. Ayrıca, mevcut yapı stoku sağlıksız, depreme dayanıksız. Konut sahipliği ülke kültüründe yerleşik bir değer. Bütün bunları değerlendiren AKP rejimi kamu arsalarını ve imar izinleri yetkilerini bir koz olarak kullanıp inşaat odaklı bir büyüme süreci başlattı iktidar olunca…Kamu arsa stokunu tahsis yetkisi ve ruhsatlar sayesinde istediği burjuva kesimlerini palazlandırırken buradan üretilen rantların bir kısmını da rüşvet havuzunda toplayıp örgüt olarak ve kişisel güç olarak kendilerini güçlendirdiler. Bu zamanla öyle boyutlara ulaştı ki, İstanbul başta olmak üzere büyük kentleri yağmaya vardırdılar işi. Ancak bu yağmaya toplumsal direniş, Gezi sürecinde ifadesini buldu ve Gezi ruhuyla birçok yerde kent yağmasına karşı mücadeleler sürdürülüyor. Rejimin ise bu yoldan geri dönme şansı pek yok, yağmayı sürdürmekte ısrarlı olacaklar. İşte burada özellikle alt ve orta sınıftan kentlilerin kamusal alan olarak kenti, kamuya ait arsaları, parkları, kamu varlıklarını savunmaktan başlayan ama onu aşarak kamusal olanı sahiplenip kamu çıkarı odaklı bir üretime ve onun üstünde yükselen yeni bir hayat tarzı için mücadeleyi yükseltmesi gerekiyor. Burada da çok yönlü, çok bileşenli bir mücadele söz konusu. Bu mücadele, yağmayı sürdürürken işçi sömürüsünü koyultanlara karşı sendikal mücadele ile de iç içe geçecektir, çevreye duyarlılık gösteren orta sınıfların direnişleriyle de. Amaç, insafsız kapitalizmi terbiye edici bir hatta takılıp kalmak olmamalıdır. Bunu ancak sistemi reforme etmek isteyen sosyal demokratlar hedefleyebilir. Asıl amaç bu reformizmi aşıp kapitalizm karşıtı, kâr ve birikimi değil, toplumsal çıkarları önde tutan, herkesten yeteneğine göre katkı alınıp emeğine göre pay verilen sosyalist bir toplumsal düzeni inşa etmeyi uzun erimli olarak hedeflemek ve bunun mücadelesini vermek olmalıdır.

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Wages in Turkey set with orders from on high despite objections

MUSTAFA SÖNMEZHürriyet Daily News/ December/01/2014
As the year nears a close, one of the constants on Turkey’s agenda is the question of the minimum wage and pay rises for civil servants.

While the minimum wage is determined by a commission that meets in December to decide the twice-a-year adjustment, civil servants’ wages and pensions are decided again in the month of December when the annual central budget comes up for discussion in Parliament.

The segment of wage earners, who total 17.2 million, and the retired, who number in excess of 10 million, have long complained about not being able to participate adequately in this critical decision-making process. Even though it looks like a constitutional right, among the total number of wage-earners, only 1 million of them are members of a union and can negotiate their salaries through collective bargaining. Civil servants are organized under different unions but laws do not allow them to stage a strike. Workers’ unions, on the other hand, have several obstacles to overcome to recruit members, including several thresholds. Also, high unemployment and practices that do not protect workers keep them away from trade unions.

The minimum wage has an “indicator” characteristic that concerns general fees and the level of salary. It gains importance, however, because it is used as a measure in several criteria.

The unions for workers and civil servants, justifiably, complain that these decisions which are extremely important for them are imposed upon them and that they are written in government programs before they are even negotiated. For example, the page 69 of the 2015 program published in the Official Gazette on Nov. 1 announced that the “minimum wage will be raised at a rate of 3 percent in January and July 2015.”

In the 2015 program, pay rises for the retired and civil servants were also outlined as follows:

“Pensions are slated to be raised according to the previous six-month inflation estimate, 3.45 percent and 3.63 percent in January and July, respectively. According to the clauses of collective contracts signed with civil servants, the wages of civil servants and pensioners are slated to be raised at a rate of 3 percent in January 2015 and with the inflation difference expected to total 0.63 percent [in January] and 3.63 percent in July.”

These expressions are enough to make trade unions angry. “What is the point of having commissions meet and forming trade unions?” they frequently complain.

As a matter of fact, the minimum wage should be discussed and decided within the framework of the Minimum Wage Commission. Even though this commission is dominated by government, bureaucracy and employers’ unions, trade unions still criticize the fact that the minimum wage is announced without being decided according to rules.

EU comparison

The minimum wage has been set at 5.5 and 5.3 percent in 2014 with a net of 846 Turkish Liras for the first half of the year and 891 liras net for the second half of the year. If what has been planned is put into practice, then the net minimum wage in the first half of 2015 will be 918 liras, rising to 946 liras in the year’s second half. When converted into euros at the average exchange rate for November, the wage will equal 330 euros net.

untitledEurostat said the minimum wage in 2013 in Turkey was 416 euros. This is only 28 percent of the minimum wage in countries such as Belgium, the Netherlands and Ireland.

The Eurostat data show that in many Eastern European countries, the minimum wage is lower than Turkey. According to 2013 data, the lowest minimum wage is in Romania and Bulgaria at 160 euros, just 38 percent of Turkey’s. However, the 416 euros of minimum wage for Turkey stands for the gross minimum wage. When insurance premiums and tax cuts are deducted from this gross figure, then in 2013, the minimum wage earner was left with just 790 liras in pocket, or 312 euros according to the average exchange rate of 2013.

In Turkey, there are officially almost 3 million unemployed, and there are 2.5 million more unemployed but they are not counted among the unemployed because they do not meet ILO norms. The number of those who do not even have an income equaling the minimum wage is closing in on 6 million. Add to this the housewives who total nearly 11 million and who do not earn anything by doing housework. At a minimum, there are also 2.5 million illegal, unregistered and non-insured workers.

Taking share from growth

The ruling Justice and Development Party (AKP) government has boasted that it has raised the minimum wage – together with all salaries – above the level of inflation since it came to power in 2003.

untitledFigures seem to confirm this. However, when one mentions inflation, the first objection is the question, “which inflation?” One reason is that the consumer inflation declared is an average and does not take into consideration the relatively higher inflation that salary-wage earners experience. This is the first objection to this. Raises should be made according to calculations based on the inflation of the wage-earner.

The second objection concerns whether the increase in welfare provided by economic growth is reflected in salaries and costs.

The Development Ministry, on page 134 of the 2015 program, shows the real net income increases of public workers, private sector workers, civil servants and minimum wage earners. While the annual increase in national income with fixed prices in the 2005-2014 period reached 4.3 percent, what happened to the annual income increase of the civil servant, worker and minimum wage earner? Or shall we ask it this way: has the working class been able to have its share from the economic growth?
The number of public workers that are members of a union is almost 500,000 and they are mostly under Türk-İş unions. Their real incomes have, instead of increasing every year, decreased 0.2 percent during the period 2005 and 2013. These public workers, mostly in transportation, municipality, irrigation, energy and mining branches during the AKP period, have become poorer, let alone gaining any share from the increase in national income.

The wages of private sector workers during the 2005-2013 period seem to have risen by an average of just 0.4 percent annually against inflation. However, the national income pie, during the same period, increased 4.3 percent every year. In other words, from the growing pie, workers who are the real producers of the pie have taken almost no share.

The net rise in the incomes of minimum wage earners in these nine years has been 2.3 percent, thus again remaining 2 points behind the annual increase in national income.

The net incomes of civil servants who are 2.5 million look as if they have increased 3.7 percent yearly. As a result, the Development Ministry is saying that the real salary increase of the civil servants is the one closest to the rise in national income.

TÜİK stated that the number of salary/wage earners in Turkey in total employment in 2013 is 17.2 million; this means two-thirds of the employed. A minimum 2.5 million of them are illegal, unregistered workers. The Finance Ministry says the number of those who work for minimum wage is 5 million. The real number of minimum wage earners, when one takes into consideration tax and premium evasion tricks, may come down to 3 million. When you deduct the 2.5 million civil servants, then the biggest segment is private sector workers, the ones who have taken no share from the growth, those who have openly become poorer during AKP years.

The AKP regime seems to have adjusted only the general level of the minimum wage to bring the general wage to a certain level. However, since general wages are not too much higher than minimum wage, it can be said that workers have not benefited from the felicities of growth.

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AKP rejiminde asgari ücret

Asgari ücretli son on yılda ne kadar fakirleşti? Türkiye asgari ücret uygulamasında dünya liginin neresinde? Asgari ücret ekonomik büyümeden payını alabiliyor mu? AKP döneminde işçi sınıfına yönelik saldırıdan asgari ücret nasıl etkilendi?
22 Kasım 2014′te DİSK Çalıştayı’nda gerçekleştirilen sunum.
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Construction forges ahead in debt, industry left behind

Mustafa Sönmez – Hürriyet Daily News, /Nov.24.2014

The Central Bank announced last week that, as of end of September, the Turkish private sector’s long-term loans have reached $164 billion. Indeed, this is not even the entire outstanding external debt, but only a part of it. Alongside long-term debts, the private sector also has short-term debts of $112 billion, while the public sector has $108 billion long-term and $18 billion short-term debts, totaling $126 billion. This means that Turkey’s total outstanding external debt is approaching $402 billion, a burden that is more than 50 percent of Turkey’s national income. Also, 40 percent of these loans have to be renewed and paid back within 12 months, which imposes a significant amount of fragility and pressure on Turkey’s economy.

For a country with a domestic savings rate of only 15 percent, it is essential to find external sources, or in other words, use others’ savings for its growth. But isn’t it also an important question where the source of this debt is taken from, and whether it is used properly or not?

The private sector owns 69 percent of the outstanding external debt, or $402 billion of it, while the public sector has the other 31 percent. In order to understand the source of this debt, how it has been used and whether it has been used properly, it would be appropriate to look at the sector analyses of the external credits that the private sector has obtained.

sapikoThe composition of the private sector’s long-term loans indicates a source mostly from the construction and service sectors, more than production sectors. Almost 39 percent of the long-term loans were used by banks. Other financial institutions, (insurance companies, holdings, etc.) have used nearly 9 percent of credits. Financial institutions offer these loans that they obtained externally as loans to domestic consumers and firms. Consumer credits have a share of nearly 40 percent, and most of them are used on mortgages. The fact that the sector which uses the most credits is the construction/real estate sector does not come as a surprise, especially to those living in Istanbul. Mortgages provided by banks are accompanied by loans offered to the construction-real estate sector, which make up 7.7 percent of credits.

While the construction sector and its complementary real estate sector share 7.7 percent of the total outstanding long-term external debts of the private sector, transportation firms, predominantly civil aviation firms, have nearly a 7 percent share in loans. The rapidly growing Turkish Airlines (THY) is also growing with considerable external debts. Energy firms that use external financing for privatized electricity distribution and power plants have a share of the long-term debt stock approaching 6 percent. On the other hand, manufacturing firms have stayed below 14 percent in the usage of external long term credits. Ten years ago, this sector was using up to 30 percent of all loans. As can be seen, loan usage for the manufacturing sector has dropped significantly; on the other hand, the construction sector has shined. As a matter of fact, we can also see this reflected in the contributions of the two sectors to Turkey’s Gross Domestic Product figures. In 2003, the contribution of the manufacturing sector to national income was nearly 18 percent, but it then began to decrease. By 2013, it had gone down to 15 percent (this year, though, it is expected to be 16 percent).  Meanwhile, the construction sector and its complementary real estate sector have risen considerably in their contributions to national income. In 2003, their contribution was 12.5 percent, which increased in the following years to 15 percent, catching up with the added value of the manufacturing sector.

Why construction? 

The ruling Justice and Development Party (AKP) government has prioritized the construction sector, making it a phenomenon, especially in Istanbul. The Housing Development Administration (TOKİ), reporting to Prime Minister Recep Tayyip Erdoğan, became an important institution in 2003. When the General Directorate of Plots Office, which managed all public plots, was merged with TOKİ without taking one lira from the budget, TOKİ became the possessor of an incredible asset. There was only one thing to do now: To offer the most prestigious plots with the highest returns to contractors. “Build luxury houses. We will provide the land, you will build it. We will share the income in half,” was the general calling, and this offer was taken up immediately. Ağaoğlu, Varyap, Kuzu, Aşçıoğlu and the like started rapidly building luxury houses in areas such as Ataşehir, Ataköy and Bahçeşehir in Istanbul. In turn, TOKİ built buildings in Anatolia with the income generated by them. As a result, throughout 13 years of AKP government, nearly 600,000 TOKİ units have been built, in addition to numerous mosques, stadiums and even police stations.

Banks further fueled the sector with their home loans. When homes started to become more than just accommodation and began to generate income, the popularity grew.

Construction-oriented growth has increased the number of people voting for the AKP government. One can see the effect of a booming construction sector reflected in the AKP’s voter base, which has inflated from 30 percent to 50 percent. While construction motivated the manufacturing sector, producing cement, bricks, glass and fittings, it also created employment opportunities in both sectors. Jobs were created for the unemployed, even though they were unsecured and paid minimum wage. Despite the risk of falling victim to a workplace accident, when one more person was able to find a job in households, the sympathy of the voter also increased.
Most importantly, construction created the opportunity for the AKP to make its own bourgeois. Big holdings such as Limak, Cengiz, Kolin, Kalyon, Maya, Torunlar and Çalık, names we hear frequently in both private and public infrastructure investments, have grown fat thanks to increased construction during the AKP era.

It is not a coincidence that in addition to construction, these firms have also won many other privatization tenders, especially in electricity distribution grids and power plants.

Even though construction has carried the AKP and its leader Recep Tayyip Erdoğan onwards and upwards, today it has become a problem. The reason is that construction is a domestic sector; it does not generate much foreign currency. Only $3 billion worth of foreign currency are obtained annually from construction, whereas Turkey’s exports are nearly $150 billion, and this is mostly provided by the manufacturing sector. As the foreign currency-generating industrial sector lagged behind, sectors that are not engaged with foreign currency, such as construction or civil aviation, have caused Turkey to stumble through the problem of a foreign currency deficit. This chronic current account deficit, which has reached 6-7percent of national income, has left the situation very fragile.

Now, strategies are being developed to make the neglected and offended manufacturing sector stand on its feet again, but it is not quite certain yet by what method or how long it will take for those who got accustomed to the sweet earnings of construction to transform into industry, and how this transformation can be encouraged.

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Economic distress in Russia to have toll on Turkish economy

MUSTAFA SÖNMEZ – Hürriyet Daily News, Nov. 17. 2014

It is considered an indication of the new crisis in Russia that the devaluation of the Russian ruble against the American dollar reached 23 percent between Sept. 1 and Nov. 11.

ttThe dollar, which was 37.3 rubles on Sept. 1, gained value to reach 39.5 rubles by the end of the month. In October the dollar rose 10 percent more, hitting 46 rubles by Nov. 11. The dollar, which went up 23 percent in just 70 days, is driving the Russian economy into a corner.

Zero growth

In a statement the other week, the Russian Central Bank admitted that the Russian economy may face the reality of “zero growth” in 2015.

According to the Russian Central Bank, in the event that the sanctions against Russia continue and the average price of oil remains $95, then in the year 2015, the Russian economy will have zero growth.

Other scenarios are depicted as such: In the event that the average oil price stays above $84 in 2015, the Russian economy will shrink 0.7 percent. For the Russian economy to grow 0.5 percent in 2015, the average oil price must hit $105.

The outflow of capital has been influential in the meltdown of the ruble against the dollar. Both the foreign capital that had entered the country and Russian capital continue to escape. It is reported that net capital exit from Russia, which is going through instability because of the impact of economic and financial sanctions against it and the sharp drop in oil prices, has reached $128 billion in nine months.

The acceleration of the net capital outflow that totaled $61 billion over all of 2013 has caused the Russian currency ruble to devaluate rapidly. The decrease in oil prices also contributed to this process and the Russian Central Bank had to increase interest rates four times to curb the drop in the ruble. At the same time, the indicative interest rate has been increased from 5.5 to 9.5 percent. As a result of all these developments, the Russian economy has been halted in its tracks.



Russia, which entered a recession in 2009 because of the global crisis, is now facing the threat of a new recession as the fruit of the foreign policy of President Vladimir Putin, who is ruling the country in a one-man regime.

In the process that started with the annexation of Crimea and continued with military operations resulting in the de facto split of Ukraine, Putin’s support in Russia climbed but his vulgar display of power took the Russian economy to the point of standstill.

Russia had an economy which was based on oil and other energy resources to a great extent but it is a country that benefits from international capital movements to turn the wheels of its economy.

With harsh fluctuations in politics and with sanctions, foreign capital lost its appetite and departed. The Russian rich accompanied this escape. With the anti-American and anti-Western discourse he resorts to frequently recently, Putin is trying to maintain his popularity in Russia. What he will do now is a topic of curiosity and concern.

Impact on Turkey

The impact of Russia’s crisis on Turkey has started to decrease Turkey’s exports and hit its tourism. Moreover, in the eyes of the international investor, Russia and Turkey are in the same region and have similar geopolitical risks. They believe that, for this reason, distance should be kept. This has become a new rationalization for the loss of the appetite of the capital owner and it will affect Turkey negatively.

zzzRussia is a net exporter to Turkey; it earns a lot of foreign currency from Turkey, reaching $17 billion to $18 billion annually. Turkey needs to sell more goods to narrow this difference, but it looks as if the crisis will make this very difficult.

While exports to Russia between January and September 2013 were $5.1 billion, in the same period in 2014, they went back to $4.5 billion. This year, because of the excessive devaluation of the ruble against the dollar, it is impossible to reach the same level of last year’s total exports to Russia, which were worth $6.9 billion.

The economic shrinking will also negatively affect Russia’s tourism expenditures.

The highest number of tourists comes from Germany and Russia to Turkey. The numbers have been rapidly increasing in recent years. In the period between January and September 2012, around 3.3 million Russian tourists came to Turkey; this figure went up 4.1 million in the same period in 2014, nearing 14 percent of the total of 30 million incoming tourists.

Russia is a hopeful market for Turkey. The increase in the number of incoming tourists was 17 percent last year. This year even if this went down to 9 percent, the increasing trend is continuing. Turkey is likely to be affected negatively pretty much by the shrinkage of this market. However, it looks quite possible that Russia will cut down on its tourism expenditures because of the extreme valuation of the dollar – something that will negatively affect Turkey’s tourism.untitled

Another negative effect the Russian crisis will have on Turkey stems from the fact that they are in the same region.

The accelerated loss of reputation because of the geopolitical risks Russia has taken primarily affect capital inflow negatively, and rapid outflows have torn down the ruble. Turkey, in the eyes of foreign investors, is regarded as a country in the same region as Russia. And when the geopolitical risks Turkey has taken in the Middle East are taken into consideration, Turkey is perceived as a country with increasing risks in terms of capital investment.

This is an important factor that may cause a decrease in the capital inflow that Turkey desperately needs.


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Enerjide (eşe dosta) özelleştirme

Türkiye’de enerji sektöründeki özelleştirme uygulamasından kimler karşı çıktı? Enerji üretim ve dağıtım kuruluşları kimler arasında paylaşıldı? Havuz medyası enerji işinin neresinde? Devlet enerjiden çekilirken özel sektör istenen yatırımı yapıyor mu?

15 kasım 2014’te Ankara’da Türkiye Barolar Birliği’nce düzenlenen “Enerji ve Hukuk” konulu sempozyumda gerçekleştirilen sunum.

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Turkey’s exports unable to catch the dollar’s wave

Mustafa Sönmez – Hürriyet Daily News, November/10/2014

The U.S. dollar has been gaining value since May 2013 in all developing countries, including Turkey. The dollar, was 1.86 Turkish Liras between January and September 2013 before rising to an average of 2.16 liras, a 16 percent hike. It is normally expected that this would affect both exports and imports. It would have been expected that exporters in Turkey would have made use of this sharp hike in the dollar to increase exports. Likewise, the expensive dollar would be expected to deter imports. Well, what actually happened in the first nine months of the year?

We can see that the dollar did not quite facilitate exports, or not as much as expected, and that the increase was limited. The January-September 2013 exports figures only increased 5.5 percent in the same period in 2014 to become $118.5 billion. It could be said that despite the 16 percent increase in the dollar, the fact that exporters were only able to increase their exports by 5.5 percent is a result of the inertia of the exporter, its muscle relaxation and its bone loss.

The expensiveness of the dollar only decreased imports 4.2 percent. In the first nine months of 2013, imports were $187.5 billion, rolling back just $8 billion. This shows that Turkey’s dependence on imports is not a flexible one while also showing that the dependence of imports has largely solidified.

The result? Turkey’s foreign trade posted a $75 billion deficit in the first nine months of last year. This year, the deficit only decreased to $61 billion, in other words, increasing exports by 5.5 percent and restricting imports around 4 percent have only been able to shrink the deficit by $14 billion. This means narrowing the foreign trade deficit nearly 19 percent. However, because the contribution of tourism and other foreign currency-generating activities was not sufficient to finance the deficit, the foreign currency deficit neared $30 billion in the first eight months of the year.

According to the medium term program (OVP), exports will total $160 billion this year. Imports, on the other hand, will complete the year as $244 billion. This means a foreign trade deficit of $84 billion. This deficit could be lowered to $46 billion with tourism and other foreign currency-generating activities. The OVP expects $810 billion national income this year. If this estimate proves correct, then the planned current account deficit will correspond to 5.7 percent of national income. This figure was a very high one in 2013 at 7.9 percent. Even though it has been possible to create a 2.2-point drop in the current account deficit with a modest growth rate of 3 percent, it still looks as if it will continue to be the most important issue causing Turkey to be categorized as fragile.

Effect of gold

In light of the developments experienced especially in past years, while analyzing Turkey’s foreign trade it has become a must to include the “effect of gold” into the analysis. As a tool for paying, Turkey’s scrap gold exports and imports with Switzerland affect foreign trade data and equilibriums to a significant extent. This has especially been influential in the foreign trade balances in the period between 2011 and 2014.

Because Turkey was not able to pay for the natural gas it imported from Iran with foreign currency due to the embargo, this situation produced the formula of payment with gold. The gold trade with Switzerland, which was also an issue in the Dec. 17 and 25 graft investigations, has affected foreign trade figures. According to Turkish Statistical Institute (TÜİK) data, while Turkey imported gold worth $14.4 billion from Switzerland between 2011 and September 2014, it returned – that is, exported – $4.2 billion in gold, resulting in a foreign trade deficit of $10.2 billion.

In the first nine months of 2014, exports appear to have increased nearly $6 billion compared to the first nine months of 2013. One third of these exports come from reselling gold to Switzerland. When this happens, the increase in exports – when gold is excluded – falls two points to 3.6 percent. Again, in the first nine months of this year, what looks like a fall of $8 billion in imports is related to the decrease in the import of gold from Switzerland.

While gold worth $6 billion was imported from Switzerland in the first nine months of 2013, imports went down to $1.4 billion during the same period. Thus, gold imports decreased $4.5 billion. Consequently, what looks like a total decrease of $8 billion in Turkey’s imports is actually only $3.5 billion when gold is excluded, a decrease of just 1.6 percent.

Therefore, when the effect of gold is taken into account, it can be seen that the appreciation in foreign currency actually has produced much fewer exports, and that it did not decrease imports as expected. In terms of the Turkish economy and foreign trade, all of these are not considered as healthy signs.

Middle East in exports

What kind of a regional panorama do the exports present? Turkish exporters, who were not able to take advantage of the increase in foreign currency, were only able to near $119 billion. What is the situation for EU markets and did the Middle East markets grow?

The regional analysis of exports shows that Turkey’s exports even decreased, let alone increasing its exports to regions dominated by Muslim populations. From the regions in this category, exports to Near East and Middle East was $26.4 billion dollars in the first nine months of 2013; in the same period in 2014, there seems to be a decrease of over $400 million. Turkey’s exports to North Africa have also decreased nearly $300 million to $7.3 billion. Exports to other African and Asian countries have also decreased up to $300 million.

The decrease in exports to these regions is expected to continue in the coming months as well. It is estimated that the wars in the Middle East and the fall in oil prices will continue to affect negatively the exports to these regions.

Exports to Iraq, a country that has become Turkey’s second biggest market, fell $500 million in the first nine months to $8 billion; there have been drops also in exports to the United Arab Emirates and Saudi Arabia. Turkey, in this period, seems to have increased its exports to Israel by $300 million.

In North African markets, on the other hand, exports to Egypt have decreased $100 million, and in the Asian markets, exports to Iran  decreased almost $1 billion.

European markets

There was also an increase in exports to EU and non-EU countries in Europe in the January-September 2014 period. Exports to the 28 members of the EU increased 12 percent when compared to the first nine months of 2013, nearing $52 billion. It is meaningful that at a time when the EU is going through a recession, exports to this market increased 12 percent.

Exports to Germany, which is the biggest market for Turkish exporters, also increased $1.4 billion in nine months to reach $11.5 billion. This is important. Also, exports to the third biggest market, the United Kingdom, also increased $1.1 billion to $7.5 billion. This is also important. Exports to other markets, to Italy, for instance, look like they were limited to $400 million and to France $200 million. It is appropriate to remember the partnership of these two countries in the automotive production chain with their Fiat and Renault companies.

Exports to non-EU European countries generally increased 15 percent to $12 billion. But again, in this region, exports to Russia dropped $600 million. It can be said that Russia’s restriction of imports due to falling energy prices has had an impact in this, as well as the rapid devaluation of the ruble.

The increase in exports to Switzerland in the non-EU European zone is noteworthy. In 2013, these exports were not even $1 billion, but they exceeded $3 billion this year. There is an increase of approximately $2.3 billion in exports.

This increase is related to the scrap gold sent to Switzerland. At a time when the payment of the natural gas imported from Iran was done with gold and a figure such as Reza Zarrab emerged, gold imports from Switzerland went up to $6 billion in 2013. Then there was some kind of a return of this gold in 2014 when this payment style lost its popularity, although there was an increase in gold exports to Switzerland to the tune of $2.3 billion.


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Turkish households lose their appetite for spending on loans

Mustafa Sönmez    

November/03/2014, Hürriyet Daily News

Turkish families’ dependency on credit card spending has been slightly decreased compared to last year, according to official figures.

Turkish society was introduced to features such as using consumer credit from banks and loans through credit cards mostly after 2003, with the phenomena quickly becoming a fixture in our lives.

The Turkish economy rapidly borrowed externally as financial corporations sourced nearly one-third of their resources as credit for consumer families.

HDN This lending boosted the domestic sale of houses, vehicles and durable and indurable products, mainly white goods. To put it in another way, the borrowing by households became one of the building blocks of the growth paradigm based on the domestic market that went on to soar from year to year. From September 2004 to September 2014, the loan stock of total households increased nominally at a rate of 1,306 percent. However, a recalculation of this for inflation shows that there was an increase of 48 times in real terms. Those who borrowed one in 2004 are now borrowing five. The total credit used or the debt stock has increased almost five-fold.

However, in the past 12 months when the economy stagnated, there has also been a significant slowdown in consumer loans. The dimensions of the consumer loans that appear in the form of consumer credits as house, vehicle and general-purpose personal finances, and as cash credit through credit cards, exceeded 345.5 billion Turkish Liras (155 billion dollars) as of September 2014, but when inflation is taken into account, there was a 1 percent decline compared to the previous year. This means a decrease in demand for an economy that is growing based on the domestic market and also means a slowdown in its motor of growth.

According to Banking Regulation and Supervision Agency (BDDK) and the Undersecretary of Treasury data, the cumulative debt of households nominally increased 8.1 percent to 345.5 billion liras in the 12 months between September 2013 and September 2014. However, when the 8.9 percent consumer price index is taken into consideration, it can be seen that the debt stock of households in reality have fallen around one point. In other words, households have lost their appetite for borrowing in the past 12 months starting in September last year. They have not increased their debts; they have opted to reduce them.

HDN Vehicles first to be avoided

The type of bank loan consumer families avoided the most was automobile or vehicle credits. The demand for vehicle credits that constitute only around 2 to 3 percent of the total debt stock of households went down rapidly. In the past 12 months, vehicle credits decreased 17 percent. When inflation is taken into consideration, the decline is 24 percent.

Demand for vehicle credits not only declined in bank loans but also in loans that were offered by the finance agencies of auto sale firms. As a result, a significant drop was experienced in car sales. Turkey’s automobile and light commercial vehicles total market went down 19.2 percent to 473,000 vehicles in the January-September 2014 period compared to the same period last year. Car sales went down 19 percent to 367,000 in the same period year-on-year. The light commercial vehicle market also decreased 20 percent to 107,000 units in the first nine months of 2014 compared to the previous year.

Escape from the credit card

With interest rate hikes and administrative restrictions introduced, borrowing through credit cards also fell significantly. Credit cards debt stock, which was around 82 billion liras in September 2013, went down 10 percent in September 2014 to 74 billion liras. When inflation is taken into account, the decline is 17 percent. Those who borrowed through credit cards refrained from adding to their debt as a result of increasing interest rates. They also reduced their credit card debts by using personal finance credits which are consumer loans.

Thus, the drop in the burden on credit cards occurred also because people were covering them with personal finance loans which cost less because of lower interest rates.

Transferring high interest rate credit card debt into consumer loans naturally increased the debt stock of consumer credits. In household borrowings, personal finance credits, which correspond to the biggest slot at 44 percent, increased rapidly.

With this method, which means paying a debt with a debt, the debt stock of credit cards decreased 8 billion liras nominally in 12 months, while the stock of general purpose loans went up from 123 billion liras to 145 billion liras, an increase of 22 billion.

HDN Careful in mortgages

While they did not eschew borrowing for houses, consumer families acted much more carefully in comparison to previous years.

In the past 12 months, the mortgage stock went up from 106 billion liras to 120 billion liras, increasing 13 percent nominally, but when calculated with net inflation, one sees that the real increase is 4 percent.

Mortgages to buy houses went up especially in the third quarter of 2014, and as a result of this, mortgaged house sales when compared to the second quarter went up 28 percent. House sales, which went down rapidly in the first two quarters of the year, increased in the third quarter. As a result, the number of houses sold in the first nine months of the year exceeded 831,000 units. In the first nine months of 2013 though, 862,000 units were sold. The drop in sales for the first nine months stayed at 3.6 percent.

The decline in house sales has especially been seen in mortgaged house sales. With the increase of interest rates, the demand for mortgages decreased, pulling down mortgaged house sales. During the January-September 2013 period, while mortgaged sales neared 361,000 units, they fell to 275,000 units in the same period of 2014, recording an almost 24 percent decrease.


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