https://orcid.org/0000-0002-5929-829X
![Sample our Politics & International Relations journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5947/TOC-Subject-Sample-2021-Politics-International-Relations.jpg"})
ABSTRACT
This paper deals with how Justice and Development Party (AKP) governments navigated the politics of household indebtedness in Turkey and utilized it towards the 2023 elections. It argues that household debt is a political tool with positive and negative consequences for incumbent governments. Households have been able to access debt instruments such as credit cards, consumer credit, car loans, and mortgages in Turkey since the onset of financialisation in the 2000s. AKP governments have benefited from the micro-level household wealth/debt accumulation as well as its macro-level economic implications for the construction-led, credit-dependent economic growth model. On the other hand, household debt has had destructive societal consequences such as bankruptcies, divorces, and suicides that became commonplace in the opposition narratives. Pinpointing the responsibility for indebtedness among households, financial system, regulatory agencies, and government, as well as devising policy solutions, has become a political struggle in the months leading up to the 2023 elections.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Supplementary material
Supplemental data for this article can be accessed online at https://doi.org/10.1080/14683857.2024.2354537.
Notes
1. TÜİK Household Budget Survey is used to calculate household savings ratio by deducting household consumption expenditures from household disposable income.
2. Turkey’s population has increased from 67.8 million in 2000 to 85.2 million in 2022. Thus, the share of formally indebted individuals within the total population rose from 0,041 in 2000 to 0,274 in 2022. This indicates more than a sixfold increase.
3. The preferred choice of wording in Turkish is not ‘borçlanma’ (borrowing), but instead ‘borçlandırma’ (forced borrowing) to underline the structural dynamics forcing people into debt.
4. TCMB’s Household Finance and Consumption Survey ‘oversampled’ the richer households in order to explore their assets and liabilities in a detailed manner (Ceritoğlu et al. Citation2023, 3). Thus, percentage of mortgage debt holders is not statistically representative of the whole population.
5. TÜİK’s Income and Living Conditions Survey asks the tenure status in the house where the survey is conducted. Therefore, house ownership beyond the existing house is not reported. Consumer durables are asked as to whether the household has possession of them. Car possession is asked for private use and does not include business-related car ownership.
6. Original Turkish version of the quotes in this section are available in Supplemental Material.
7. TCMB overnight borrowing interest rate was 7.00 and USD/TL exchange rate 19.56 on May 12, 2023 -the last business day before the 2023 elections. A month later, the TCMB raised interest rates on June 23 to 13.50 when the USD/TL exchange rate was 25.25 (Central Bank of the Republic of Turkey Citation2024).
8. The message spread on social media account X is the following: ‘I am addressing the youth: Do not pay your interest incurred KYK debt! We will arrive at government within a year. As I promised, you will be only asked to pay the principal, and only after you find employment’ (BBC News Turkish Citation2022).
9. The phone message is the following: ‘Dear citizen, I know that you are trying to make ends meet through debt. Once I arrive at government, I will create a definitive solution for individual credit card debts. Our country’s treasury will take over your credit card debts -accumulated due to the economic crisis caused by Erdoğan- from banks. Interest incurred on credit card debt will be completely deleted and the principal will be paid in 36 instalments. Thus, hundred-thousands’ of citizens will be relieved from being crushed under this burden. They will take a deep breath. Families will not crumble due to debt swamp. Remember, May 28 election is a referendum of either salvation from debt, or being stuck into debt swamp as a country’ (T24 Citation2023).
Additional information
Funding
Notes on contributors
Berkay Ayhan
Berkay Ayhan is an assistant professor in the Department of Political Science and Public Administration at Kadir Has University. He completed his Ph.D. in political science from McMaster University. Professor Ayhan received the Young Social Scientist Award for his doctoral thesis from the Turkish Social Sciences Association in 2019. His research interests are political economy, public policy, and public administration. His articles have been published in the International Review of Administrative Sciences, Turkish Studies, and Southeast European and Black Sea Studies.
Mustafa Aydin
Mustafa Aydin is a Professor of International Relations at Kadir Has University and the President of the International Relations Council of Turkey. Previously, he worked at Ankara University (1994-2005) and Economy and Technology University (2005-2009) and was the Rector of Kadir Has University between 2010 and 2018. Professor Aydın was a guest researcher and/or lecturer at Michigan (1998), Harvard (2002, Fulbright fellow), and Athens (2003, Onassis Fellow) universities, as well as at Richardson Institute for Peace Studies (1999, Unesco Fellow), the EU Institute for Security Studies (2003) and the Institut für die Wissenschaften vom Menschen (2018). Prof. Aydın’s areas of interest include international politics, security issues related to the Caucasus, the Black Sea, and the Middle East, and Turkish foreign and security policies.
Ahmet Ulcay
Ahmet Ulcay is a Ph.D. candidate in the Department of Economics at Gaziantep University. He completed his master’s degree in the same program with a thesis titled ‘Turkey-Africa Economic Relations within the Scope of Development Assistances (2000-2019).’ His research interests are international economics and development.