State-guaranteed projects have held the budget hostage

In Turkey, rapidly rising inflation and high costs have recently dented wages and incomes. However, in addition to closing the door to the increase in the minimum wage, the government has not increased the rate of inflation of the vacation bonus for retirees.

The reason for this is the inability to allocate resources from the budget to pay for the difference in inflation.

But can we really find this resource?

Economists draw attention to the guarantees given to public-private cooperation projects. Accordingly, the allocation of public resources is a matter of preference. The government’s preference at this stage is for “ineffective” projects.

Guarantees given to public-private cooperation projects in Turkey are one of the important topics of discussion.

Total charge $153 billion

Hospitals far from the city center, airports that are not crowded enough, bridges and highways with fewer vehicles than expected…

According to the Economic Policy Research Foundation of Turkey (TEPAV), the government has provided $7.3 billion for airport projects, $32.1 billion for highway and bridge projects, 78, $2 billion for the city’s hospitals and $35 billion for the Akkuyu nuclear power plant. The total burden of revenue guarantees granted to public-private cooperation projects on the budget is about 153 billion dollars.

There is a guarantee of 40,000 vehicles on the Osmangazi Bridge, 135,000 on the Yavuz Sultan Selim Bridge and 45,000 on the Çanakkale Bridge.

Speaking to DW Turkish, the former State Planning Organization expert, Prof. Dr. Uğur Emek points out that the revenues from the bridges and highways that are built are lower than what is guaranteed: “We see that these roads and bridges are not used. Because there is a free national road right next to it.

According to the findings of the Court of Auditors, 25 million 376 thousand 878 vehicle passage guarantees were given for the Eurasia tunnel in 2020. However, the number of passing vehicles remained at 12 million 609 thousand 103. A payment of 456 million 310 thousand TL was made to the company that operates the tunnel from state coffers.

“If the test was done, we would see that it could not be paid”

Uğur Emek says the fee for the Osmangazi Bridge is 668 lira, according to the contract. Expressing that the fee has been reduced to 184.5 lira to encourage crossing the bridge, Emek says the difference of 483.5 lira is covered by the budget.

Emek said: “When you leave Istanbul and go to Gebze, İzmir, Bursa, Orhangazi, Balıkesir, Savaştepe and İzmir in a country where the minimum wage is 4,250 TL, you have to pay 1065 TL one way for this project, according to to the contract. When you return. You will do 1065 more. Will it cost you 2130 lira. Over time, we have seen that it cannot be paid for. If the test had been done, we would have seen in advance that he couldn’t be paid,” he said.

At the end of March, Transport Minister Adil Karaismailoğlu announced that 6,000 vehicles crossed the Çanakkale Bridge in one day, for which the government gave a daily guarantee of 45,000 vehicles. teacher. Emek recalls that the toll fee of 285 lira determined in the contract for Çanakkale Bridge was announced at 200 lira by President Recep Tayyip Erdoğan. From there, 85 lire per pass are taken from the state coffers.

750 million additional euros have been paid

Pointing out that 65% of the budget of the General Directorate of Highways is allocated to guarantee payments, Uğur Emek draws attention to an important detail regarding the Çanakkale Bridge.

Emek says the bridge has been extended another 513 meters to 2023 meters: “It has been this operator’s dream to build Çanakkale Bridge since 1960. But his dream project, which they presented at international congresses, was 1510 meters. Why are you 2023 meters? This coincides with his third year, they say what will happen if this is done. Sir, when we compare these 1510 meters with 2023 meters, there is a difference of 25%. You say the cost of the bridge is 3 billion euros. At the time, we were throwing 750 million euros on the street to show off.

“What use is the Çanakkale Bridge to me?”

Emphasizing that if a project is beneficial to the national economy, Emek said, “We need educated people for social capital. Then we will fund the education system in Turkey. Do we need healthy people? No one can oppose it. together 84 We’ll pay that million. he speaks.

Guarantees given to airports

Due to the inability to achieve flight guarantees at airports as well as bridges and highways; companies were paid $42 million in 2015, $47.4 million in 2016, $60 million in 2017, $65 million in 2018, $133 million in 2019, and $172 million in 2020.

Zafer Airport, which was opened in 2012 to serve the provinces of Kütahya, Afyon and Uşak, also continues to suffer losses. According to the responses received by CHP Zonguldak Deputy Deniz Yavuzyılmaz of CIMER, a guarantee payment of 53 million 982 thousand euros was made to the company operating the airport, which was built with a passenger guarantee, between 2012 and 2022. The amount of the guarantee to be paid to the company during the first three months of the year amounts to 1 million 734 thousand 972 euros. This figure exceeds 27.5 million lira at the current exchange rate.

Share of municipal hospitals

Uğur Emek points out that 25% of the budget of the Ministry of Health is reserved for municipal hospitals. Saying that the budget is full of guarantees, Emek points out that the share of health expenditure in national income has decreased to 3.8.

teacher. Dr. Emek says, “You are closing down public hospitals that are in operation. Instead, you are building a hospital outside the city. Is there a reason for that now?”

“The resource is transferred to unproductive projects”

Emphasizing that limited resources should be used with care, Emek says, “Priorization is very important. First, if you transfer money to an inefficient project, you will first transfer money to a bad project because it is inefficient. Second, you will give up on a better project. There are two evils here.

So aren’t these resources available to employees and retirees?

Despite the rapid rise in inflation, the government, which did not increase the minimum wage, did not increase the pensioner’s holiday bonus.

Vedat Bilgin, Minister of Labor and Social Security, said in a statement on April 19: “We do not have a holiday bonus increase on our agenda. Payments will be made on April 28-29. The cost is at the level of 25 billion lira in two holidays, 1100 lira will be paid to pensioners.

“It is possible to increase the minimum wage to 5,000 lire”

Speaking to DW Turkish, an expert in labor economics, Prof. Dr. Aziz Çelik draws attention to the fact that the resources that can be allocated from the budget for capital aid can be used for pensioners or to reduce the burden of bonuses above the minimum wage.

According to Çelik, the state can allocate funds from the budget to the social security institution to increase pensions and income. The Social Security Institution can also pay pensioners a better monthly and holiday bonus.

Stating that 5% of the employers’ share in the payment of social security premiums is covered by the state, Çelik indicates that the support for insurance premiums transferred from the budget to employers over the past 10 years has reached 174 billion read. He points out that the 25 billion TL transferred only in 2021 corresponds to approximately 2% of the budget.

Saying, “Just as premium support is provided to the employer, the burden of insurance premiums on the minimum wage worker may be covered by the treasury or the budget,” Çelik said, it is possible that the minimum wage of 4,250 lire can reach 5,000 lire without any increase.

The vacation bonus could have been 2,000 lire.

One of the main debates of the last period is that of deposits protected against currencies. According to the regulations, companies and institutions can convert their foreign currency or gold accounts into Turkish lira deposits at the exchange rate. If the fall in TL against foreign currencies exceeds bank interest rates, the losses suffered by these institutions and companies are compensated. However, the regulations are criticized for transferring wealth to the high income group.

Aziz Çelik points out that 11.7 billion liras were transferred from the budget of currency-protected deposit accounts only in March.

Stating that there are 13.6 million pensioners in Turkey, Çelik says: “If 11.7 billion lira were transferred to the holiday bonus, an additional 856 lira could be paid to the pensioner and the holiday bonus would reach 1956 lira “.

“The source is used elsewhere”

According to Aziz Çelik, supporting depositors with exchange rate guarantees, bridges with vehicle guarantees, roads and hospitals with patient guarantees is a sign that there is a resource in the budget as well. a heavy burden: “So is there a resource “Yes, there is a resource, but the resource is used elsewhere.

According to economists, due to the government’s preferences in budget planning, public resources obtained through taxes collected from large sections of the population are transferred to capital and higher income groups.

70% of the 252 public-private cooperation agreements signed between 1986 and 2020 in Turkey belong to those after 2003.

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