Monday, 21 February, 2022 , 17:37
A bar in Istanbul on Wednesday. The cost of power has doubled in some parts of Turkey, fueling widespread discontent.The New York Times
nytimes.com | By Carlotta Gall | Feb. 19, 2022
Hit by spiraling inflation, electricity bills have doubled for households and businesses in only a month.
ISTANBUL — It began with a few outraged customers posting photographs of their electricity bills to social media, showing how charges had almost doubled at the end of January. But such complaints have quickly snowballed into a full-blown political crisis for the government of President Recep Tayyip Erdogan of Turkey.
Turks have been hit with runaway inflation — now officially more than 48 percent — for several months, and criticism is growing even from Mr. Erdogan’s own allies as he struggles to lift the country out of an economic crisis. The Turkish lira has sunk to record lows. Food and fuel prices have already more than doubled. Now it is electricity.
Even as Mr. Erdogan raised the minimum wage last month to help low-income workers, his government warned that there would be an increase in the utilities charges it sets. But few expected such a shock.
“We are devastated,” said Mahmut Goksu, 26, who runs a barbershop in Konya Province in central Turkey. “We are in really bad shape. Not only us, but everyone is complaining.”
Mr. Goksu’s January electricity bill soared to $104 from $44, and is now higher than the monthly rent he pays on his shop. “My first thought was to quit and get a job with a salary, but this is my business,” he said.
The price hikes in electricity have varied across the country, but every business and household has seen an increase of some kind.
Mahmut Goksu, a barber in central Turkey, said his January electricity bill soared to $104 from $44, and is now higher than the monthly rent he pays on his shop. The New York Times
Ilyas Senturk, 29, a motorbike courier in Istanbul, shares an apartment with a roommate and said his power bill had more than doubled, but friends had received bills two times or even four times the size of his.
“We have all gone into debt in the last three months,” he said of his friends and colleagues. “Sometimes we cannot find money.”
Mr. Senturk said the increase in his electricity bill may seem small, but it amounted to the cost of a weekly commute — or his weekly food bill.
“We are trying to dim the lights, or use smaller light bulbs,” he said. “With all the other increases, it is a huge hike.”
Turkey’s economy was already in recession before the pandemic hit, and because it relies heavily on tourism and the hospitality industry, the months of lockdown have badly hurt many businesses. The government offered some compensation, but mostly in the form of loans to tide over businesses and workers. Many like Mr. Senturk are still paying those off.
Restaurants and cafes trying to recover after two years of losses from the pandemic were also reeling this month after electricity and gas bills doubled.
“During the pandemic, we were closed for 19 months,” said Ilker Tiniz, 37, who runs a family-owned restaurant in the southern city of Adana. “We did delivery. My credit cards exploded and we were taken to the debt enforcement office.”
Galloping inflation has touched everything from farmers to market traders to customers in restaurants.The New York Times
He took a government-sponsored bank loan but complained about the interest payments. “They said it’s support, but it’s not,” Mr. Tiniz said. “They take it back with interest.”
In January, his rent rose to 15,000 lira (about $1,150 at the time), then the electricity bill came in even higher at 17,000 lira, and Mr. Tiniz went on Twitter to voice his alarm. His was among the first of what has grown into a storm of complaints from citizens.
“I wrote that tweet so that the government hears my voice,” he said in an interview at his restaurant.
Despite the difficulties during the pandemic, there had always been hope that things would get better, Mr. Tiniz said, but the galloping inflation was shaking everything in the whole food chain, from the farmers to market traders to the customers in his restaurant.
“In December, peppers were eight lira per kilo. Today, they were 22 lira. Cucumber was six lira, today it was 20 lira,” he said. “I never bought eggplant for more than six lira. Today, it’s 30 lira. It rose by 400-500 percent.”
“It’s really a disaster,” he said. ‘‘By March, it will be worse.”
Political opponents of Mr. Erdogan have been warning for months that the country is heading for economic collapse. But in a system almost completely under Mr. Erdogan’s sole control, he makes decisions on virtually everything and keeps his own counsel.
Despite warnings from economists, Mr. Erdogan has steadfastly refused to raise interest rates, the usual tool to combat inflation, arguing that it would only hurt the poor.
Ilker Tiniz this month at his kebab restaurant in Adana, Turkey. He said he paid more in power last month than in rent. The New York Times
The price of electricity is set by a government agency, the Energy Market Regulatory Board, or E.P.D.K., which would not have made the raises without the president’s approval.
But because Mr. Erdogan has taken charge of so much, he has also risked becoming the target of Turks’ anger. Opponents have leapt at the doubling of electricity bills as the latest sign of mismanagement by his government.
Understand Turkey’s Economic Crisis
How did Turkey’s economy go so wrong? Before the pandemic, Turkey was trying to ward off a recession caused by mountainous debt, steep losses in the value of the lira and rising inflation. But the crisis has sped up in recent months, primarily because of President Recep Tayyip Erdogan’s policies.
Cutting interest rates. The most recent crisis has been caused by Mr. Erdogan's direct interference in monetary policy, including his insistence on lowering interest rates in the face of staggering inflation — precisely the opposite of what economists prescribe.
Inflation soars. Low interest rates put more money into circulation and tend to drive up prices. In Turkey, the inflation rate has surged past 20 percent amid Mr. Erdogan’s policies, and skyrocketing prices are causing misery among the poor and impoverishing the middle class.
The lira plummets. The country’s currency has nose-dived in recent weeks. Over the past year, the lira has lost more than 48 percent of its value. That steep decline means prices for imported goods and electricity have been steadily rising, and people are struggling to afford food and fuel.
Political pressure mounts. Facing an election in 2023 and sliding in opinion polls, Mr. Erdogan has doubled down on his financial approach and seems convinced that his strategy will enable the economy to grow out of its problems. Most economists, however, say a crash is more likely.
The leader of the largest opposition party, Kemal Kilicdaroglu, announced that he would refuse to pay his electricity bill in an act of protest.
“I have to announce the pain of the broad masses,” he explained later in a speech. “They didn’t leave space for the citizen who cannot pay their electricity bill to raise their voice. Who would be their voice?”
Many also blamed the private electricity distribution companies, which are owned by some of Turkey’s largest conglomerates, some of them close associates of Mr. Erdogan, for profiteering.
“It did not happen suddenly,” said Mehmet Ozdag, a board member of the Chamber of Electrical Engineers, a professional association. “We have been hearing these footsteps for the last 20 years.”
The government, which has spent billions of dollars propping up the declining currency and is increasingly cash strapped, had to scramble this week to answer the complaints rippling around the country.
The energy minister, Fatih Donmez, defended the increase in comments twice in the last week, saying it reflected the rise in global prices, but promised cheaper rates on a portion of the bill for traders. The government also announced last weekend that it was reducing a value-added tax on food products to 1 percent from 8 percent.
Fatih Donmez, the energy minister, defended the increase in comments twice in the last week, saying it reflected the rise in global prices.The New York Times
Mr. Erdogan addressed the topic at length in a speech on national television after a cabinet meeting on Wednesday, appealing to his audience to be reasonable. It was thanks to his government that Turkey no longer suffered electricity shortages, and Turkish citizens still enjoyed the cheapest electricity prices of any developed country, he said.
More than 60 percent of consumers benefited from some form of subsidy on electricity bills in January, he said, and he promised additional assistance for low-income households, small businesses and nonprofit organizations.
“As always, to this day, we are listening to the voice of our nation,” Mr. Erdogan said, “and finding solutions to their problems.”
Nimet Kirac contributed reporting from Adana, Turkey, and Safak Timurfrom Istanbul.
