Erdogan Announces Salary Hike as Part of Bid To Remain in Power
Turkey will be holding presidential and parliamentary elections this year as the country remains mired in ongoing economic troubles
Turkey’s President Recep Tayyip Erdogan announced an increase in pensions and salaries for civil servants, his latest attempt to spend big in order to win in this year’s national elections, expected to be his toughest challenge yet to hold onto power.
In a speech to civil servants on Tuesday, Erdogan announced that there would be a 25% increase in all pensions and salaries for civil servants.
“I would like to give the good news that we will apply the salary increase rate of civil servants, civil servant pensioners and all other retirees as 25%,” Erdogan said, according to Hurriyet Daily News.
He’s trying to create a temporary release and postpone all the problems until after the election
The president ended 2022 by announcing an expensive early retirement program and earlier boosted the minimum wage by more than 50% and introduced a scheme to provide inexpensive loans and subsidize utility payments, all of which will likely amount to several billions of dollars a year.
“He’s going to do everything in his power to win the elections,” Bulent Gultekin, a former governor of Turkey’s Central Bank, told The Media Line.
“The reason that he’s doing so poorly [is] because people are doing poorly economically,” Gultekin said.
Erdogan’s party had planned to hold presidential and parliamentary elections on the same day in mid-June, but could move them forward. The spokesperson for Erdogan’s ruling Justice and Development (AKP) Party told reporters this week that the party is considering moving the date forward slightly because the current date falls during summer vacation, when citizens will be traveling and could be away from their primary residences on Election Day.
While Erdogan’s approval rating has recently improved, polls suggest that he would still face a very tight race, or possibly be beaten by several politicians supported by six opposition parties that have formed a coalition to try to push the president out of power.
A survey conducted by Metropoll in December found that 52% of respondents do not approve of Erdogan’s handling of his job as president.
That included 18% who support his Justice and Development Party and 32% of supporters of his coalition partner in parliament.
Erdogan’s decrease in popularity is mostly blamed on the country’s embattled economy, which has experienced massive inflation as Turkey has kept interest rates low, opposing orthodox economic policies.
The official inflation figure is reported at 64%, although it has been over 80% since August.
Many, including some of Erdogan’s supporters, are skeptical of the government’s statistics and a group of independent economists believe the real number for December was 135%.
The skyrocketing inflation has made everything from food to taxi rides much more expensive.
Gultekin, who is now a professor of finance at the University of Pennsylvania’s Wharton School, said that an increase in wages is not a problem because they need to catch up with inflation, but that the government should work to decrease the number of people working for minimum wage.
“He’s trying to create a temporary release and postpone all the problems until after the election,” Gultekin said.
“The problem in Turkey is the structural issue with the current bizarre economic policies,” he added.
He says that the early retirement program will be a major burden on the budget in the long run.
The scheme is expected to cost about $13.5 billion in the first year and is expected to increase in later years, according to a source cited by Bloomberg.
It will have huge deficits that our children will probably have to compensate for. It’s going to put a huge pressure on the younger generation in the future.
Cem Çakmaklı, an assistant professor of economics at Koc University in Istanbul, also has concerns about the long-term consequences of the early retirement program.
“It will have huge deficits that our children will probably have to compensate for,” he told The Media Line. “It’s going to put a huge pressure on the younger generation in the future.”
Çakmaklı also agrees that the minimum wage needs to increase, which could benefit the economy because it will increase consumer demand and provide more tax money.
However, he believes that both the policy and the early retirement program could backfire on the government.
Çakmaklı said that the income for people who did not earn minimum wages would not increase at the same rate or be high enough to properly deal with inflation, meaning that many would not benefit and could end up feeling left behind by the government’s policies.
A similar scenario could occur for those who do not qualify for early retirement because they miss the cut-off dates for eligibility.
“There is also the other side of the coin. I don’t think that other people will be happy about this,” he added.