From Editor-in-Chief
Among the political events that have marked the past two weeks, Devlet Bahçeli’s threatening announcement of a list containing the identities of 154 individuals stands out. It is understood that those included in the list by name and surname are people who do not share the same views as the MHP regarding the murder of Sinan Ateş, the former President of the Grey Wolves’ Hearths, and the way the investigation and prosecution were conducted, or who imply that there is a connection between this murder and certain executives of the MHP.
Indeed, Bahçeli stated: “[These individuals] have made great injustices, slanders, lies, contempt, and accusations against the Nationalist Movement Party. The total number of these people is 154. (…) We find it difficult to accept them, but we are closely monitoring them. The list here is a compilation of who spoke when, at what time, on which program, how they spoke, with whom they spoke, and what insults they directed at the MHP. This file is in our hands. When the time comes, this file will be put into action. (…) We do not even accept engaging with them, but we will certainly confront them within the legal framework.”
Although Bahçeli appears to be referring to a legal reckoning, this incident still reflects the grave situation of press and freedom of expression in our country and is discouraging in terms of Turkey’s chances for democratization. Furthermore, considering the established belief within the MHP that even presenting different views, let alone openly criticizing them, is a matter of courage, Bahçeli’s statement is also alarming.
Another prominent incident is the acceptance by the ruling majority in the legislative committee of the bill proposing the “extermination” of stray animals, disregarding the opposition’s objections and contrary public opinion. If the bill, known in the public as the “Extermination Law,” becomes law, metropolitan municipalities, provincial municipalities, and municipalities with a population exceeding 25,000 will be required to establish animal shelters by the end of the year to care for and rehabilitate “stray” animals until they are adopted. Given that President Erdoğan instructed his party group to finalize this issue before the parliamentary judicial recess, it can be confidently expected that this bill will be accepted in Parliament without significant changes.
However, it is not unlikely that many municipalities, either to avoid the significant burden it would bring or – primarily AKP municipalities – due to their definite dislike of animals, may evade their responsibilities and take the shortcut of euthanizing the animals. The most concerning point here is that when it comes to issues related to stray animals, the first thing that comes to the AKP government’s mind is not to seek a humane and civilized solution but to think of exterminating the animals, which they see as the source of the problem. If the logic applied to dogs for public order and security issues were correct, the same “easy solution” would need to be used by people who disrupt public order and security!
Another source of concern regarding the issue of stray dogs is that the government might be using this opportunity to turn the anti-animal atmosphere it has spread into a campaign against “luxury-loving, elitist” animal lovers, who are typically assumed to be CHP supporters, creating hostility against them within its own base. This atmosphere can be used as a stepping stone to conclude that the views of animal lovers (and the CHP) on other (political) issues are also not worth considering.
The ruling party’s “my way or the highway” stance, which disregards any criticism and suggestions on this matter, is highly discouraging and even alarming for the country’s hopes for democratization. It is disturbing because a political team that habitually ignores the views and criticisms of the opposition and the fundamental trends in society may eventually tend to disregard the rights of those whose opinions they ignore.
In any case, by placing the issue of stray animals at the center of the political agenda, the Erdoğan-Bahçeli administration seems to have succeeded in both making people temporarily forget about the real agenda of the country, such as the high cost of living and the struggle of broad segments of society to make ends meet, and in consolidating its base to some extent by polarizing society.
Meanwhile, the government appears to have developed a new formula to exact “revenge” on CHP municipalities for the loss of municipalities in the March 31 elections. Accordingly, the collection of accumulated debts of municipalities will begin. Practically, this means putting pressure on municipalities transitioning from AKP to CHP to pay off the exorbitant debts inherited from the AKP. The AKP leadership likely aims to expose the CHP as “inept” and “drowning in debt” if the CHP municipalities fail to pay these debts within the desired timeframe. As with the issue of stray animals, they likely see this as a way to consolidate their base.
Lastly, let’s conclude this article with two unfortunate news related to the economy. The Financial Times has highlighted that the recent influx of foreign hot money into Turkey could quickly exit in the face of potential global or local shocks. Under the headline “Traders pour billions of dollars into Turkish lira,” it was emphasized that funds are flowing into Turkey to take advantage of high interest rates. Still, this situation could leave the country vulnerable to sudden market changes. Meanwhile, a Deutsche Bank report predicts that monthly inflation will rise due to price increases in July and August, automatic tax increases on fuel, alcohol, and tobacco, and wage increases for public employees and retirees. You will find a detailed assessment of the state of the economy in Caner Gerek’s article.
See you in our next issue.
* Prof. Dr. Mustafa Erdoğan
What is the Purpose of the Amendment to the Animal Protection Law?
The bill to amend the Animal Protection Law, submitted to the Grand National Assembly of Turkey (TBMM) on July 12, 2024, by members of the ruling party, was accepted with some changes by the Agriculture, Forestry, and Village Affairs Committee despite intense reactions from animal lovers, opposition parties, and civil society organizations. While the bill was expected to be discussed in the TBMM General Assembly in the new legislative year, the President announced that the law would be passed before the parliamentary recess.
The rationale behind the bill claims that the regulation aims to address the problems caused by stray dogs. It is stated that the source of the current situation is Animal Protection Law No. 5199, which was adopted in 2004. According to the rationale, “During the evolving process, this law has not been able to ensure the comfortable living and safety of stray animals fully, nor has it been sufficient to resolve the problems faced by humans and other living beings.” It is significant that the law itself, rather than the central and local administrations that have been in power for 20 years and failed to take the necessary measures prescribed by the law, is seen as the source of the problem. This reveals the mindset of the ruling party.
The rationale for the bill estimates that there are 4 million stray dogs, while the current shelter capacity is 322 animal shelters with a total capacity of 105,000 animals. Based on data from the Ministry of Agriculture, it is reported that only 2.5 million dogs have been neutered in the last 20 years. The rationale emphasizes that neutering is not a solution in countries with high animal populations. It claims that the catch-neuter-release method, accepted by Law No. 5199, has failed, regardless of the extent to which it has been implemented, and argues that the solution is the “extermination method.”
The proposed solution in the new regulation seems to be the formula of “catch-rehabilitate-keep in shelter-adopt-if not adopted within a certain period, apply euthanasia.” The term “killing” in the existing law is replaced with “euthanasia.” However, it is clear that this change does not make the action to be implemented any more innocent. Due to intense reactions, the final stage of the formula has been somewhat revised in the committee discussions. That is, it is foreseen that euthanasia will be applied under the supervision of a veterinarian only to animals that meet certain conditions, such as those carrying contagious diseases, posing a danger to human and animal health, being untreatable, and those whose adoption is prohibited, rather than to all animals not adopted within a certain period. However, the proposal does not answer a fundamental question: “How will 4 million animals be kept in the existing 322 shelters with a capacity of 105,000 animals?” A transition period until the end of 2028 has been foreseen for local administrations to increase and make shelter capacity adequate. Still, the proposal does not include a solution for where and how the allegedly existing 4 million animals will be cared for during this period.
The implementation of the new method proposed in the bill is supported by some penal sanctions. Firstly, it becomes an offense for animals collected on behalf of local administrations to be released outside of shelters and for animals in shelters to be released outside. Municipalities are required to allocate a certain percentage of their budgets to shelters, and sanctions are foreseen for those who do not comply with this rule. Registering owned animals is also mandatory, and sanctions are foreseen for those who abandon these animals on the streets. However, the proposal does not include any bans or sanctions regarding the importation, production, and sale of animals.
The ruling party claims that this bill aims to clear all streets of animals to solve the stray animal problem it created by not implementing its own law for 20 years. To this end, it is imposing a radical regulation that foresees collecting animals, taking them to shelters, and killing those that are not adopted. It refuses to listen to any alternative solutions. Critics of the proposal are accused of advocating for the streets to be left to gangs of dogs and ignoring the people and animals harmed by the dogs. Everyone is aware of the problem, but the proposed solutions are different. More humane alternative solutions are being suggested.
It seems difficult to believe that the ruling party’s strict stance is genuinely motivated by the desire to solve the stray animal problem. This stance appears more like a tactic by a party dissatisfied with the results of the December 31, 2024, elections and having lost a significant portion of local administrations to pressure the opposition party municipalities that won the elections financially and legally and to create a conflict between citizens and municipalities. However, it is important to remember that no political tactic can legitimize the killing of 4 million innocent lives.
* Ali Rıza Çoban – Constitutional Lawyer
Erdoğan Opens a New Front Against CHP Municipalities: SGK Debts
Addressing CHP Chairman Özgür Özel at his party’s group meeting, President Erdoğan said, “If you want to benefit retirees, give instructions for your municipalities to pay their accumulated debts to the Social Security Institution (SGK). Right now, our Ministry of Treasury and Finance will start collecting these debts at the source. There is no such thing as getting a bagel for 25 kuruş.” Immediately following Erdoğan’s remarks, Minister of Labor and Social Security Vedat Işıkhan stated that the debt of municipalities to the SGK had reached 96 billion liras and that the Ministry had taken action: “Before the March 31 local elections, we pointed out that there were municipalities with accumulated premium debts to the SGK and called for the payment of these debts. We didn’t leave it at words; through the SGK, we sent debt notifications to all indebted municipalities, regardless of party affiliation.
CHP Chairman Özgür Özel, on the other hand, stated that Erdoğan was trying to undermine the CHP by putting municipalities in a difficult position and disrupting services to the public and that the most indebted municipalities were those that transitioned from AKP to CHP in the March 31 local elections. CHP Deputy Chairman Burhanettin Bulut announced that 15 metropolitan municipalities, including those run by the CHP, had no premium debts to the SGK, but the total debt of Balıkesir, Bursa, and Denizli Metropolitan Municipalities, which transitioned from AKP to CHP in the last election, was 790 million liras.
As we have frequently written in our previous bulletins, since 2019, the AKP government has been applying pressure on opposition municipalities through various methods such as trustees, obstacles to project financing, bureaucratic hurdles, administrative and legal pressures, etc. Now, after the issue of stray animals, we see a new front opening against the opposition through municipal debts. When we recall the government’s longstanding pressures on opposition municipalities, it is clear that this debt collection issue goes beyond mere public finance recovery efforts and is being carried out with partisan motives.
Although Minister Işıkhan stated that sanctions on municipal debts would be applied without party discrimination, Erdoğan’s specific mention of CHP municipalities in his statement and the Ministry’s immediate action indicate that this move is driven by partisan motivation. With this move, Erdoğan might be hoping for several gains. For instance, while debt notifications may suffice for AKP and MHP municipalities during the debt collection process, harsher measures might be imposed on CHP municipalities. The “debt crisis” between the government and municipalities could suddenly become the main agenda item. As a populist leader, Erdoğan would not shy away from such dichotomies and contrasts and could see a series of opportunities to intervene in local administrations’ powers and allocations from the central budget. Therefore, I believe it is necessary to be cautious.
One of President Erdoğan’s aims might be to create the impression that the CHP municipalities are obstructing the government’s efforts to maintain fiscal discipline. For a few days, we have been encountering similar comments in government-aligned media. Lastly, and perhaps most importantly, the motivation might be to financially strain CHP municipalities, thereby reducing their capacity to provide services and making the CHP appear unsuccessful in local governance. In the face of this move, which may have many political objectives that we cannot yet fully anticipate, the opposition should clearly and emphatically convey to the public that the government is driven by an intention to exact a price or punish rather than pursue the public good.
* Ömer Faruk Şen – Ph.D. – Missouri University
Public Intervention in Currency and Its Results
With the Central Bank’s interest rate cuts that began in September 2021, Turkey experienced a significant surge in foreign exchange rates. This increase was the result of a flight from the Turkish Lira (TL) and a rapid dollarization process. Despite the rapid rise of the dollar in a short period, discussions about the appreciation of the TL and the depreciation of the dollar have been increasing recently. The underlying reason why the TL is still considered valuable despite its substantial loss in value against the dollar is that inflation is rising faster than the exchange rate.
Table 1 below presents the changes in exchange rates and prices since the interest rate hike in September 2021, which marked the most significant turning point in the Turkish economy in recent times. Assuming the price index by TÜİK and İTO and the dollar/TL exchange rate in August 2021 is taken as 100, when we look at the trend of price movements, according to TÜİK, a product priced at 100 TL back then would cost 411 TL today, while 1 dollar would have increased to 395 TL. Thus, the increase in prices has slightly outpaced the increase in the exchange rate. According to the Cost of Living Index for Wage Earners in Istanbul, prepared by İTO, whose data is more consistent than TÜİK’s, the price of a 100 TL product has risen to 530 TL. The inflation rate indicated by İTO’s data appears significantly higher than the increase in the exchange rate. Hence, inflation has increased much more than the exchange rate movement that caused the economic rupture.
One of the main reasons why inflation has increased more than the exchange rate is due to public interventions in the foreign exchange market. These interventions were made to stabilize the economy before the presidential election and to reduce inflation after the election. However, at this point, the increase in inflation surpassing the exchange rate has caused the TL to appreciate and the economic indicators to lose their significance as reliable metrics.
Tablo 1: Fiyat ve Kur Hareketleri
Kaynak:TÜİK, TCMB, İTO
With inflation increasing much more than the exchange rate, Turkey’s dollar-based national income has also rapidly increased. As shown in Table 2, when looking at per-capita national income, the dollar-based national income has been continuously rising since the end of 2019, when economic problems began to accelerate, with the increase becoming even more pronounced in 2022. With this rapid rise, Turkey will enter the category of high-income developed countries by increasing its per capita national income by approximately $750. Despite the challenging economic conditions, Turkey appears to be rapidly becoming wealthier and moving towards becoming a developed country, according to national income indicators. However, it is a plain fact that this situation is far removed from Turkey’s realities. This distorted situation is caused by interventions in the exchange rate. Without these interventions, per capita, national income and many other international economic indicators would not be as misleading.
Tablo 2: Kişi Başına Düşen Milli Gelir ($)
Kaynak: TÜİK
The effects of interventions in the exchange rates are noticeable not only in national income but also in the comparison of domestic and imported product prices. The faster increase in inflation compared to the exchange rate is causing domestic goods and services to become increasingly more expensive than imported goods and services. One of the main reasons why food prices in Turkey have become comparable to those in London, or why a vacation in Greece is cheaper than in Turkey, is the interventions in the exchange rate, keeping it stable while inflation remains high. Considering this increase in prices across all domestic and foreign goods, Turkey’s exchange rate-based competitiveness is gradually decreasing. During a period when costs are rapidly rising with inflation, keeping the exchange rate stable and not increasing income puts export and tourism companies in a difficult position. Since they cannot improve their competitiveness through productivity increases, they continually pressure the government for exchange rate adjustments.
Functioning of the Free Market
In global practice, exchange rates are generally not allowed to fluctuate completely freely. Countries permit the exchange rate to fluctuate within a certain range. Turkey, although temporarily, is implementing an unnamed fixed exchange rate regime. This public intervention is quite significant for reducing inflation, but it also brings the aforementioned disadvantages. Therefore, as the period of reducing inflation prolongs, the appreciation of the TL and the rising costs of domestic goods and services will continue. The positive aspect is that some firms may invest in productivity-boosting measures in an environment where the exchange rate does not rise. Those who look to the government for solutions will diverge from those who pursue productivity increases in the future. Ultimately, intervention in the exchange rate hinders accurate pricing and leads to the accumulation of risks. Time is working against the government and the Central Bank regarding the exchange rate.
* Dr. Caner Gerek
The draft text can be accessed here:
https://cdn.tbmm.gov.tr/KKBSPublicFile/D28/Y2/T2/WebOnergeMetni/df2c98ac-4cb1-4003-9c07-935b00f06b0e.pdf
