$6 billion economic handout package to go into effect a month before Turkish elections

$6 billion economic handout package to go into effect a month before Turkish elections

ANKARA - Reuters
$6 billion economic handout package to go into effect a month before Turkish elections

Parliament is due to put into effect a “debt restructuring and social reform” package costing nearly $6 billion ahead of the June 24 snap elections, ruling Justice and Development Party (AKP) Deputy Group Chair Bülent Turan said on April 30.

“The general assembly [of parliament] will be working until May 17 for the legislative regulations before breaking off for the elections,” Turan told reporters at parliament.

The package, announced by Prime Minister Binali Yıldırım on April 30 after the cabinet meeting in Ankara, includes schemes to restructure tax and premium debts to public institutions as well as traffic, election and military service fines.

“We are solving the disagreements our citizens have with public institutions through this package,” Yıldırım said, adding that citizens would need to apply by the end of July to take advantage of the new measures.

The government will also take steps toward registering the nearly 13 million buildings without deeds in Turkey, Yıldırım said, adding that a “structure registration document” would be implemented. He said the move would earn 48 billion liras.

In addition, the government will hand out 1,000 liras to pensioners before the two main annual Muslim holidays and increase an allowance of 265 liras, paid every three months to citizens over 65 years old, to 500 liras.

Students who have been unable to complete their university degree in seven years will also be allowed to go back to school “as long as they have not been linked to terrorism,” Yıldırım said.

Extra cost: $6 billion

The measures are estimated to cost the state between 22 and 24 billion Turkish Liras (almost $5.9 billion), according to Yıldırım, who said it will be paid for by revenue from plans to register millions of unlicensed properties.

“The pay bonus amount is 1,000 liras before the Ramadan holiday and 1,000 liras before the Feast of Sacrifice holiday. Regarding pensioners more than 12 million, it is a substantial amount of money but we have no problem in terms of resources,” he said, adding that the package was “well-calculated by experts and approved by President Recep Tayyip Erdoğan.”

AKP governments led by Erdoğan have often rolled out incentives ahead of elections over the course of its 16 years in office.

Earlier this month, Erdoğan called snap parliamentary and presidential elections for June 24. The elections will herald the launch of an executive presidential system narrowly approved in a controversial referendum in April 2017, which was marred by allegations of fraud.

Uncertainty to be ‘reduced’

Deputy Prime Minister Mehmet Şimşek said the decision to hold snap polls will help to cut short the period of uncertainty and to implement reforms.

“Firstly, uncertainty will be reduced. Secondly, the presidential system will open the path for Turkey. Thirdly, putting reforms quickly on the agenda offers an opportunity to resolve existing problems,” Şimşek told private broadcaster NTV on April 30.

“After the new government is set up, these reforms could be brought forward for a very fast start,” he added.

Şimşek also stated that Turkey’s focus on savings, with a savings ratio of around 25 percent over the last 12 months, fell short of its investment appetite.

“Our main goal is to channel existing savings into productive areas. We will enable taxes, incentives and credit policies to ensure that savings are channeled into the right areas,” he said.

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