We are currently living in a state of uncertainty under which we are not clear as to whether the expression “Turkey is having an election on July 22” is a mere assertion or a decision. Apparently not every decision to hold elections naturally leads to an election atmosphere.
Our prospective election is still far from being of the regular type where traditional campaigning tools are extensively used. Social policies were replaced by identity politics, stability by power struggles and domestic politics by foreign affairs. Election promises turned into a diesel fuel campaign, while economy should have been the fuel of election campaigning. In such a messy environment, economy becomes the last thing that crosses the mind. It seems that economic issues are deliberately being set aside to ensure that the economic crises in the period between 1999 and 2001 remain forgotten. Things are upside down. Economy should have normally been the primary emphasis of the opposition in a regular election; however, the case is now different. While the ruling party insistently stresses the importance of economic stability, the opposition adopts a very different agenda. This of course has something to do with the role of the current figures from the opposition in the crises in 1999 and 2001. However, the larger picture demonstrates that the opposition parties do not adequately address economic issues in their election manifestos. The outside world holds a pretty similar perception, which can best be viewed in the May 22 ING analysis titled “The opposition parties do not have economy policies!” This may seem a pretty assertive conclusion; however, the same could be found in the May-July reports by Deutsche Bank, UBS and Goldman Sachs. In election times, international research, finance, banking and investment institutions direct their attention to Turkey. They put all parties under scrutiny to learn their economic policies. For this reason, they collect much more information than domestic analysts do. The Turkey director of an influential international bank told me that he had two major impressions from his contacts with high-level figures of opposition parties: that the election may not take place, and that they will take care of the economy later. We will see how this conclusion is reflected in the July 22 elections, but let us take a look at the economy policies of the opposition parties.
It is commonly held that the Young Party (GP) announced the most interesting economic projects, but this is not actually the case. The move by the Republican People’s Party’s (CHP), which published the funding details for its priority projects, made the GP’s attempt insignificant. The GP used the CHP’s financial data to prove that its projects are actually rational. The CHP explained its election promises in detail in its manifesto, “CHP Compass ‘07.” The funding that the CHP reserved for its priority projects amounts to YTL 61.5 billion. To create such a colossal amount of resources, the CHP will reduce the primary surplus from 6.5 percent to 3 percent. This sounds pretty good in theory since it finds YTL 20 billion through this reduction.
However, whether this amount obtained out of reductions in the primary surplus is really revenue is debatable. The CHP also is considering appropriating 25 percent of unemployment funds to fulfill this objective. Of course there is nothing strange about making such a move, just like the reduction of the primary surplus. However, this is a phenomenon that came into existence out of the relations with the IMF promoted by former CHP deputy Kemal Derviş. We are trying to generate primary surplus simply because we are having troubles meeting the primary expenses with our revenue due to the high amount of interest that stems from previous borrowings. Primary surplus is generated in consideration of the revenue-expense balance. In other words, you first calculate your gross domestic product (GDP) and then your targeted primary s