Europe’s big eggs in Turkey’s economic basket(Al-Monitor, October 6, 2018)
ARTICLE SUMMARY Economic concerns lie at the heart of Turkey’s moves to repair ties with…
Wary of his sagging popular support and economic turmoil ahead of elections next year, Turkish President Recep Tayyip Erdogan appears ready to shower “election candies” on various segments of voters at the risk of wrecking public finances.
Turkey’s next presidential and parliamentary polls — in June 2023 at the latest — are looming as the toughest challenge yet to Erdogan and his Justice and Development Party, in power since November 2002, as popular grievances grow, fueled by an inflation topping 80% and its many social ramifications.
In a pledge likely to become a centerpiece in his re-election campaign, Erdogan announced on Sept. 13 that the state-run housing agency TOKI would build half a million new homes for low-income families over five years, including 250,000 homes in the initial two-year phase. The investment value of the plan, involving also the construction of business offices, is about 900 billion Turkish liras ($49 billion), he said.
In a country where 42.5% of families are not homeowners, housing has grown into a grave problem for low-income groups amid a massive increase in prices and rents in the past couple of years. Erdogan’s housing project, based on subsidized prices and payments extended over 20 years, attracted about 3.5 million applications in less than a week, according to officials. Buoyed by the demand, Ankara is now considering a similar project for middle-income groups.
Erdogan put the price of a two-bedroom apartment at 608,000 liras (about $33,000), including a 10% down payment and 240 monthly installments of 2,280 liras ($123) – less than half of the minimum wage, which is the pay of nearly half of employees in the country. Subsequently, however, TOKI clarified it would raise the monthly payments twice a year, taking into account public-sector pay rises in the preceding six months. This means the installments would be more or less indexed to inflation and the cost of the apartments is likely to grow.