turkish lira

In late November, Turkey’s currency, the Turkish lira, crashed, sending the country into an economic crisis and state of desperation. The crash is the latest shock to Turkey’s economy, which has been on a gradual decline for two years. As the crisis escalates, opposition leaders and citizens are taking to the streets, calling for President Recep Tayyip Erdogan to step down, and demanding change.

For several years, Turkey’s economy has been riddled with instability due to the unorthodox economic policies of President Erdogan. The president insisted on intervening in the country’s monetary policies and has adamantly advocated for low-interest rates, hoping to boost exports and competition. However, economists warned that such actions could spark inflation, unemployment, and poverty, decrease growth in the long run, and ward off foreign investors. 

In August 2018, Erdogan’s obsession with low-interest rates played a part in a financial crash, sparking chaos and desperation. Although the country recovered somewhat, Erdogan has insisted on maintaining low-interest rates, often replacing policymakers who challenge his views. This year alone, Erdogan has removed three central bank governors from their roles. In early December, he also fired the country’s finance minister. Today, the Turkish people have little confidence in the president’s policies. 

The consequences of Turkey’s ongoing economic woes are profound. This year alone, its currency lost over 45% of its value. Almost 20% of this drop in value has occurred over the past few months. The inflation rate is approximately 20%, although Erdogan has lauded that the central bank cut inflation rates three times this year. Recent reports depict seemingly endless lines outside bread stores and gas stations, farmers defaulting on loans, and rising unemployment rates. Indeed, Turkey is dependent on imports to produce goods such as food and textiles. As such, the currency crisis is directly impacting the price of consumer products. For example, the cost of tomatoes soared by 75% in August, compared to last year.

Additionally, prices of critical goods have skyrocketed, and there are shortages of essential imported medicines and medical equipment. “Everything is so expensive,” Sevim Yildirim told the BBC at a local fruit market. “It’s impossible even to cook a main course for a family with these prices.”

Turkey’s opposition parties called on the population to take to the streets and demand change. However, while Erdogan’s approval rating continues to slide, elections will not take place until 2023, and the president continues to rule with a heavy hand. According to Turkish law, demonstrations can only occur if sanctioned by the government. Media channels and outlets must also follow government guidelines. Over the past year, Erdogan’s administration has cracked down on dissenters, including those protesting the country’s economic decline and those advocating for greater social freedoms in the increasingly repressive nation.

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