The Process of Change in Turkey's Economic Policies from the Republican Era to the Present
Mehmet Tomanbay evaluates the process of moving away from a planned economy, the fractures of 2018, the Protected Currency-Concerted Deposit scheme, and the fund scandal.
The changes in Turkey's economic policies from the Republican era to the present, the process of moving away from a planned economy, the 2018 fractures, the Protected Currency-Concerted Deposit application, and the recent stock market and fund scandal are discussed.
Changes in Institutional Structure
The understanding of economic management shaped with the Republic was based on an institutional structure that was guided by science and reason, valued the public's role and planning, relied on strong institutions and the rule of law, and aimed for a fair distribution of the generated wealth among segments of society.
The Process of Moving Away from Planning
During the AKP government, significant turning points occurred that changed the structure and approach of economic management. With these transformations, the Republic's institutional and planned economic management was gradually abandoned in favor of an economic approach also referred to as 'nas' economics.
The 2018 Fractures and Decisions
The currency shock and crisis in 2018 increased fragility in financial markets and drove up annual inflation. With a statutory decree issued in July 2018, the authority to appoint and dismiss officials at the Central Bank was transferred to the President.
Protected Currency-Concerted Deposit Scheme
In December 2021, the Protected Currency-Concerted Deposit (KKM) scheme was put into practice. The currency protection provided by KKM to high-deposit holders, the cost it imposed on the public, and the deterioration it caused in income distribution increased poverty and economic inequalities.
Fund Scandal and Stock Market Losses
The fund scandal in the second half of September triggered a new economic problem. Some of the funds established by portfolio management companies registered with Borsa Istanbul collapsed due to manipulative transactions leading to a liquidity crunch.
Total Loss and Crisis of Confidence
New Party General President Özgür Özel announced that the total loss increased along with the funds placed under liquidation. The issue evolved from a mere liquidity problem into an economic, legal, and political crisis of confidence.