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Turkey’s strongman rule imperils gains from economic boom

Turkey’s strongman rule imperils gains from economic boom

ISTANBUL: Inside the Ozdilek Park mall, Dogukan Altin arrives for his shift at a men’s clothing store. Today is a national holiday and almost everyone has the day off. But almost no one has come to Ozdilek.

“It’s generally just empty. There’s too many malls,” says Altin, 34, sporting a close-cropped beard along with a dark tie and white shirt. “Because there’s three malls right next to each other, none of them make any money.”

Next door, a pair of empty storefronts frame the entrance to the Metro City mall. The stale air inside bears the scent of retail death. Only the Kanyon mall, where leafy green vines line an open-air courtyard and affluent shoppers throng upscale cafes, seems alive.

The redundant shopping centers, on a main street in the Levent business district, symbolize Turkey’s deeply unbalanced economy.

Under President Recep Tayyip Erdogan, this country embarked on a building spree that remade its urban skylines and public infrastructure, often making life easier for average Turks. The booming economy, which relied heavily on borrowing from foreign banks, grew last year by a robust 7 percent, according to the International Monetary Fund.

Now the frenzy is crashing to a halt as Turkish companies’ heavy foreign debts come due and the boom’s excesses surface. Erdogan’s increasingly authoritarian turn, which has led him to consolidate power on a nationalist platform and left him slow to take the measures needed to rein in a runaway economy, has investors on edge.

After months of delay and a 40 percent drop in the value of the Turkish lira, Erdogan two weeks ago finally permitted the central bank to raise interest rates. But he did so only after giving a public speech castigating the move, enveloping Turkey’s path out of the crisis in a fog of contradiction.