Treasury borrowing aggravates Turkey’s interest rate woes (Al-Monitor, June 28, 2017)
Summary Ankara’s pressure on banks to lower interest rates has taken a menacing tone, but…
Mustafa SÖNMEZ – Hürriyet Daily News February 2 2015
Following any lost elections, they even scorned AKP voters by saying, “They have sold their vote for coal and bulgur.”
What actually were the AKP’s “social welfare” programs? Would it be correct to say they were at such a dimension to be able to hike the votes to this extent? A ministry was founded in 2011 specifically to deal with this business, named the Family and Social Policies Ministry.
What is the truth? Is the AKP “charitable” to an unusual extent? Or, is it that the propaganda and publicity of it is more than what is actually happening? For example, when compared to the social expenditures of EU and OECD member countries, where does Turkey stand?
It is a right
A template has indeed been developed to measure the public social expenditures of countries.
In this template, a definition has been made which says social protection encompasses all interventions by public or private bodies intended to relieve households and individuals of the burden of a defined set of risks or needs, provided that there is neither a simultaneous reciprocal nor individual arrangement involved.
Data related to social protection expenditures and income in Turkey and several other countries is measured according to the standards set in the manual of The European System of Integrated Social Protection Statistics (ESSPROS).
The ESSPROS manual categorizes social aid under eight categories of risks and needs. These are sickness/health care, disability, old age, survivors, family/children, unemployment, housing and social exclusion.
To define expenditures, there are these items: Pensions paid to the retired, survivors, the handicapped, unemployment payments, sickness and health care, pharmaceuticals, rehabilitation, accommodation costs, funeral aid, birth aid, maternity leave costs, vocational course expenditures and contributions to vocational course participants, among others. The data is collected from establishments and organizational records, as well as through questionnaires for municipalities, foundations and associations.
Where does Turkey stand?
Turkey’s social expenditures in 2013, on this basis, have neared 13 percent of its national income. It was around 8 percent in 2000. In other words, there has been an increase of 5 percentage points in expenditures. However, this is not unique to Turkey; it is the same almost everywhere else in the world. OECD puts the average for its members as 18.4 percent in 2000 and 21.7 percent in 2013.
The dimensions of public social expenditures vary according to the “social features” of different countries. For instance, France leads the group as a country that has increased its social expenditures to 32 percent of its national income, while Turkey, Korea and Chile are not even half of France, with expenditures around 10 to 12 percent of their national incomes. That means, despite the “charitable” policies the AKP seems to have adopted, Turkey is behind several EU countries in social expenditures and exactly 10 points behind the OECD average; almost 12 percent to 22 percent.
Several factors play a role in the differences in expenditures by nation. It can be seen that social protection is high in countries where the “social” principle is prioritized in its constitution, where equal distribution is considered important and where lower classes have the habit of struggling for this. Besides, it is also important whether or not the population is covered by social security and whether they contribute to social expenditures. In countries where unrecorded activities are low and social security is high, social expenditures can be high as a result of premiums paid. When there is no premium, indeed, social spending is also low.
The reason Turkey is left behind in this area is because both the number of those who join the workforce and the number of those who pay a premium are low. Participation in the workforce is only half, meaning only half of those who could work are employed.
As a matter of fact, when we look at 2013, out of the social protection aid that reached 216 billion Turkish Liras ($114 billion), salaries of pensioners and survivors make up 48 percent. For health expenditures, the rate is 30 percent and unemployment aid is only 1 percent.
According to this template, almost half (41.1 percent) of the expenditures for social protection in 2013 was financed by the state. This was followed by 27.7 percent from employers and 25.2 percent from the premium contributions of other people within the scheme of protection. Other incomes were 6.1 percent.
What about the AKP-invented ones?
During the AKP regime, with a huge usage of external resources, an economic growth of an average nearing 5 percent has been experienced annually, but research reveals that a large enough share has not been allocated to the wage/salary earners from this growth. Besides, despite this growth, social expenditures have also remained short and according to international definitions, it was 10 points behind the OECD average, at only 13 percent.
When we say social expenditure or “social protection” here, it is generally understood as the contributions provided by establishments known as “Fak-fuk-fon” founded by the Family and Social Policies Ministry and/or health care provided to the poor who hold a “green card.” These are included as social expenditures and amounted to 215 billion liras in 2013, but in total this, together with AKP-invented aid, constitutes a small slice (almost 10 percent, 20 billion liras, $10.5 billion). This corresponds to a bunch of aid amounting to 1.2 percent of the national income. Another measure would be that the total in 2013 was only 4 percent of the central budget.
The biggest portion, 34 percent, of this 20-billion-lira aid budget coordinated by the Family Ministry is made up of free health care. The “green-card” holding population who receives free health care from the state and who has to prove it with an income test is around 8 to 9 million. The overwhelming majority of them are Kurdish-origin people from the east and southeast. A premium payment of nearly 5 billion liras (almost $2.5 billion) is transferred to the Social Security Corporation (SGK) from the central budget.
The elderly and the handicapped who are paid 230 liras ($115) every month are the second-largest group benefiting from social aid. The money spent for home care of the needy is another significant item. Another one is the aid from the Social Aid and Solidarity Fund, commonly known as Fak-Fuk-Fon, managed by province governors and district governors. The aid from this fund has many forms and can be home furniture, education, rent, clothing or coal aid. Scholarships for needy students and municipal social aid have the least share in social aid programs.
A matter of propaganda
How come aid that constitutes only 1.2 percent of the national income makes so much noise? How come it looks as if it has such an important place and an important impact on voter behavior?
The AKP regime, while distributing social aid from a very limited portion of the budget, which is financed by the taxes of people, presented them as a favor, as an alms-giving of the AKP regime, not as the obligation of a social state, despite the fact that this aid was inadequate at only 1 percent of the national income.
Certain opposition bodies and writers, instead of defining this aid as a “right” and criticizing its scarcity, could not go past criticizing that it is being presented as “alms.” They somehow opted for almost humiliating those who have received these “alms,” instead of recognizing the neediness of those who receive this aid and that most of this aid, which stays at 1 percent, has not reached the poor.
Moreover, instead of criticizing the AKP’s efforts to transfer the gratitude of those who receive aid into votes, they criticized those who have received aid for voting for the AKP, and they did this without any existing scientific data.
The “policies of alms-giving” were used almost as an excuse for their failures, those who were not able to develop alternative and more effective social policies against the AKP regime. Its scarcity and deficiency have not been criticized adequately.
In fact, it could have been revealed that social aid was much lower than it looked and it could have been explained how a more just and equal distribution should have been provided; however, this was not able to be done.