Foreign buyers invade Turkey after pound crisis
By Dmitry Zaks
EDIRNE, Turkey — The sea of Bulgarian buses parked outside a market in Turkey’s historic city of Edirne betrays the scale of the currency crisis that is hampering President Recep Tayyip Erdogan’s path to a third decade of rule.
The mosque-filled city on the western outskirts of Turkey was one of the first capitals of the Ottoman Empire as it extended into the Middle East and Europe in the 14th and 15th centuries.
This is now the place where buyers from Bulgaria and the Balkans, themselves among the poorest countries in Europe, go to stock up on everything from underwear to nuts at a fraction of their price of back home.
“For us, the crisis is good, but it is very bad for the Turkish people,” said tourist guide Daniela Mircheva before boarding a bus to return to her Bulgarian town of Yambol.
“We were in a similar situation maybe 10, 11, 12 years ago,” said the 49-year-old, referring to the 2008 global financial crisis. “It’s very difficult.”
“Half the price”
The besieged Turkish lira has collapsed under the weight of an unusual economic experiment Erdogan is conducting in an attempt to build support ahead of elections slated for mid-2023.
Erdogan pushed the central bank to cut interest rates in the firm belief that this will finally solve Turkey’s chronic inflation problem.
He, as economists had universally predicted, did the exact opposite.
Consumer prices are climbing at an annual rate of over 20 percent.
Some economists believe that this pace could accelerate in the coming months.
The pound has lost a third of its value since the start of November alone.
It was starting to lose five percent a day until Erdogan announced further currency support measures on Monday that were successful in halting the fall.
This means Mircheva can afford to stack a few more pitchers of sunflower oil on her bus full of Bulgarian buyers.
“It’s half the price it is in Bulgaria. It’s a lot cheaper for us, a lot cheaper, ”she said.
But the mood among Turkish market traders is grim.
“It’s humiliating,” Gulsen Kaya said behind her counter full of sweaters and winter clothes. “Look what he did to Turkey! “
Erdogan is betting that a cheap lira will create export-led growth that will put Turkey on the path followed by China in an economic transformation that has lifted millions out of poverty and created a new middle class.
He stood up for the poor by bringing his Islamic-born party to power through thick and thin in 2002.
Erdogan went on to surprise many by opening Turkey up to foreign investment and organizing nearly a decade of vigorous growth.
Economists and diplomats, as well as some Bulgarians, find it difficult to understand why Erdogan has decided to change course so dramatically in recent years.
“I think the people who run Turkey, if they do the things that I think they should be doing, then reading it will come back to the level it was in the summer very, very quickly,” the Bulgarian buyer said. Tinko Garev.
“I am very unhappy with the Turkish people because I realize what these cheaper prices mean to them.”
A senior Western official said the drop in Erdogan’s approval rating in most polls to 30% had put the veteran Turkish leader “in political survival mode.”
“You can choose not to believe (the individual polls) but the trajectory is clear,” said the official, who requested anonymity. “He’s at the bottom of his base of support. “
“We are in shock”
Bulent Reisoglu has been running Edirne Market since it opened after moving from its original location in Istanbul 15 years ago.
He said the number of weekly shoppers filling his hangar-like mall has grown from 50,000 to nearly 150,000 since the effects of the crisis began.
“The number of foreign buyers has increased four to five times,” he said.
Yet traders are making less money because the additional sales are more than offset by the depth of the lira collapse.
“Our suppliers send us new price lists every week,” complained market trader Utku Bitmez.
“All the raw materials come from abroad, Europe, China and Italy,” he said. “The price of these products has doubled since last year.
Reisoglu said he watched traders nervously eyeing the pound’s latest exchange rates on their phones.
“We are in shock,” said the market manager. “No one expected such a large devaluation.”
Bulgarian buyers also seemed to have mixed feelings about getting such deals.
“Locals can’t buy all of these things,” said Ilyana Todorova while shopping for clothes with her teenage daughter. “For ordinary people, this is not good.”