Inflation
The 'Beyoncé effect': Singer's tour blamed for inflation surprise in Sweden?
Think soaring costs were caused by the Ukraine war or supply chain snarls? You must be unaware of the "Beyoncé effect".
The official start of the singer's worldwide tour in Sweden last month caused such a rush for hotel rooms and restaurant meals that it has reflected in the country's economic data, reports BBC.
In May, Sweden reported higher-than-expected inflation of 9.7%.
The surprise was due to rising hotel and restaurant costs, the report said.
According to Michael Grahn, economist at Danske Bank, Beyoncé may have contributed to the increase in hotel costs. He believed she was also a driving force behind the unusually massive increase in recreation and cultural expenses.
Also read: BTS on 1st Grammy nod: 'It’s hard to express in words'
"I wouldn't ... blame Beyoncé for [the] high inflation, but her performance and global demand to see her perform in Sweden apparently added a little to it," he wrote in an email to the BBC.
There is little doubt that the singer's first solo tour in seven years is a significant business event. According to one estimate, the tour may earn over £2 billion by the time it concludes in September.
Airbnb reported that searches for accommodation in locations on the tour increased after the announcement. Many shows sold out in days, and resale prices skyrocketed, the BBC report also said.
Also read: Grammy-winning duo Daft Punk break up after 28 years
In the United Kingdom, 60,000 people arrived in Cardiff, including fans from Lebanon, the United States, and Australia. Demand for hotel rooms related to her London show was so high that several homeless families being accommodated in a hotel by the local authorities were reportedly kicked out to make space for the fans, it said.
The Stockholm concerts, where Beyoncé performed before an audience of 46,000 over two nights, apparently drew fans from all over the world, particularly the United States, where a strong dollar against the krona made tickets in the Nordic country appear to be a relative bargain.
Visit Stockholm termed the surge in travel to the city the "Beyoncé effect" in an email to the Washington Post last month.
Sweden's inflation rate peaked in December at 12.3%. Official numbers showed that the rate was 9.7% last month, down from 10.5% in April. The financial markets had predicted around 9.4%.
Also read: Beyoncé ties Alison Krauss’ record of 27 wins at Grammys
Grahn told the BBC that it is "very rare" for one celebrity to have such an effect, adding that large football tournaments may have a similar effect. He stated on social media that the anticipated trends will return to normal in June.
Budget not based on IMF conditions: Finance Minister
Bangladesh's Finance Minister AHM Mustafa Kamal has said that the national budget for the fiscal year (FY) 2023-24 was not based on the conditions of the International Monetary Fund (IMF).
"Like in different countries, the IMF has come to Bangladesh and made some recommendations to help the economy. We took their prescriptions as per our needs, but did not follow them all in preparing the budget," he said while addressing a post-budget press conference at the Bangabandhu International Conference Centre (BICC) in the city on Friday (June 2, 2023).
He said the IMF is not helping the countries only by providing money, they also monitor the economy. This is good for the economy.
Responding to a repeated number of questions on inflation and commodity price hike, the finance minister said the government is concerned about the rising trend in inflation.
Read more: Unrealistic budget won’t help overcome economic crisis: Fakhrul
"We're apprehensive about inflation, but it is not beyond our control. We cannot stop feeding the people," he said.
He said the government is approaching in a flexible way to contain inflation. Through social safety-net programmes, the government has been providing food to poor people.
"We're trying to identify the reasons for inflation and address those. If we need to give any concession, we will do that," he said.
Agriculture Minister Abdur Razzaque, LGRD Minister Tajul Islam, Education Minister Dipu Moni, Commerce Minister Tipu Munshi, Finance Secretary Fatima Yasmin, Bangladesh Bank Governor Abdur Rouf Talukder, and National Board of Revenue (NBR) Chairman Abu Hena Rahmatul Munim were among others also addressed on the occasion.
Read more: CPD dismisses budget's projections on growth, inflation, revenue collection
The Finance Minister claimed that the new budget was mainly focused on benefiting the poor people.
"We have expanded our tax net so that more taxes could be collected. Everybody has to pay tax," he said, adding that like other budgets in the past this was also prepared targeting both the next election and the people.
"We cannot separate the people or the election from our goal of the budget," he said.
Responding to another question, he said that all the projections made in the previous budgets were implemented.
Kamal said Bangladesh has been well placed in remittance earnings among the countries in the region.
Read more: Budget 2023-24: Govt allocates Tk88,162 crore in education sector, up 8.2%
After a downward trend, remittance earning is again increasing and we can meet five months of our import bill through our reserve.
He said after some measures taken by the government, the inflow of remittance will gradually go up.
At the press conference, with the request of the Finance Minister, Bangladesh Governor Abdur Rouf Talukder responded to a good number of questions, specially, on inflation, remittance and banking sector.
He said that Bangladesh Bank will announce its monetary policy on June 19 where it will lay out the plan on containing inflation, and increasing remittance and reserve.
He claimed that though the government's loan from the banking system is increasing, it will not push up inflation as the central bank is withdrawing more money from the market through selling dollars.
Read more: Budget sets 7.5 percent annual economic growth, inflation at 6 percent
CPD dismisses budget's projections on growth, inflation, revenue collection
The Centre for Policy Dialogue (CPD), a think tank, in its traditional post-budget review on Friday (June 2, 2023) said the proposed national budget of Bangladesh for FY 2023-24 projected ambitious targets for both GDP growth and inflation, without putting forth any realistic measures to achieve them in light of global and domestic crises.
The CPD said budget focused on increasing tax-GDP ratio, but the revenue growth target is not realistic, so the volume of deficit financing will ultimately widen.
CPD Executive Director Dr Fahmida Khatun led the post-budget review, held at a hotel in Gulshan, and televised live on some tv channels.
She said the budget has been placed at a time when the macroeconomic stability of Bangladesh has weakened significantly.
REad: Proposed budget targets are challenging: FICCI
“The macroeconomic stress is visible on lowering growth of revenue mobilisation and shrinking of fiscal space of current fiscal year (FY 2022-23), soaring borrowing from banks, higher price of daily essentials and decreasing foreign exchange reserve,” she added.
The private credit growth projected to 15 percent in FY 2023-24 that was 14.1 percent in 2022-23. As of April 2023, private sector credit growth was 11.3 percent, she said.
Replying to a query, CPD’s distinguished fellow professor Dr Mustafizur Rahman said the revenue growth projection in 2023-24, compared with actual revenue achievement of FY2022-23, wpi;d be a massive 39 percent, which is "absolutely ambitious" - perhaps even overambitious.
The budget’s growth projection occurred based on a wrong concept, so multi sectoral problems would arrive in the implementing stage of the proposed budget.
Read more: Budget 2023-24: Govt allocates Tk88,162 crore in education sector, up 8.2%
Mustafiz expected a monetary policy reflecting fiscal policy in light of the budget and controlling measures of higher inflation.
Khondaker Golam Moazzem, research director of CPD said the budget technically avoided the capital market development policy, which is very essential for such a developing economy.
“Without establishing a realistic and sustainable capital market, investment financing cannot grow, the government incentive based capital market cannot play a role in new investment in the capital market,” he added.
Towfiqul Islam Khan, Senior Research Fellow in CPD said curiously, no mention was found regarding the accumulation of external payments arrears or new forex reserve.
REad: Finance minister unveils the country’s largest ever budget in Parliament
Details about critical reforms, including shifting towards market-based dollar exchange rate and interest rate and adoption of periodic formula-based petroleum product prices, have not been explained in the budget speech, he said.
The CPD projection said Bangladesh's proposed national budget of FY 2023-24 targets 15.5 percent growth will be around 39.7 percent growth target compared to the current budget achievement and Tk1.42 lakh crore is needed to be mobilized.
Budget sets 7.5 percent annual economic growth, inflation at 6 percent
The proposed budget of Bangladesh in the fiscal year 2023-24 has set an estimated Gross Domestic Product (GPD) worth of 50.06 lakh crore with a 7.5 percent annual growth.
The inflation target was set to 6 percent which is now 9.28 percent in the proposed budget.
The 7.5 percent growth projection could be deemed as ambitious given the uncertainties in the global economy and various other challenges at home.
Finance Minister AHM Mustafa Kamal explained his position on why he is expecting higher growth this time despite the economic pressures.
Read more: Finance Minister unveils Tk 761,785 crore national budget
“We expect to return to a higher growth trajectory and achieve a 7.5 percent GDP growth, by way of investing in the productive sectors and stimulating productivity and domestic demand,” he said.
Kamal focused on investment in the 100 special economic zones and completing ongoing mega-projects to achieve the GDP target.
In FY19, Bangladesh achieved a record 8.15 percent GDP growth. Then came the pandemic. The finance minister set a growth target of 8.2 percent in FY20, but the actual growth achieved was 3.45 percent, the lowest in several decades.
The growth rate increased to 6.94 percent in FY21 after recovering from pandemic effects. The GDP growth further increased to 7.1 percent in FY22.
Read more: Budget FY23-24: Focus should be on tackling macroeconomic challenges, says Dr Atiur Rahman
Govt’s efforts on to keep economy vibrant despite global recession: PM
Prime Minister Sheikh Hasina on Wednesday (May 31, 2023) said that the government is making every effort to keep Bangladesh's economy alive despite the global economic recession caused by the Covid-19 pandemic and the Ukraine-Russia war.
The prime minister said this while responding to a tabled question of Awami League MP elected from Chattogram MA Latif for PM’s question-answer session.
She said the government has been able to quickly bring the country's economy to the pre-Covid high growth trend dealing with the recession, inflation and instability in the global economy caused by the pandemic and the war.
Read more: President Erdogan and PM Hasina vow to take Dhaka-Ankara ties to new height
“Amid the crisis over Covid, our growth in the financial year 2019-20 was 3.45 percent which was one of the highest in the world for that period,” she claimed.
She said that due to the various steps taken by the government to boost the economy, the GDP growth in the financial year 2020-21 increased by 6.94 percent. “It further increased to 7.10 percent in FY 2021-22.”
Hasina also highlighted various measures taken by the government to keep the economy of the government alive.
Read more: PM calls for more Swedish investment as H&M boss calls on her
These included government expenditure rationalisation, social protection, subsidies in electricity, energy and agriculture sectors, export incentives, rise in remittance inflow, monetary policy etc, she said.
In response to the question of Jatiya Party MP elected from Dhaka Syed Abu Hossain, the prime minister highlighted the various steps taken by the government to control the prices of daily commodities and said as a result of the government's activities, it has been possible to control the prices of essentials and the poor people are benefiting from it.
In response to the question of Jatiya Party MP elected from Pirojpur Rustam Ali Farazi, the she said that it will be possible to start rail traffic on the Dhaka-Mawa-Bhanga section of the Padma Bridge Rail Link Project by September 2023 and the Jessore section from June 2024.
Read more: Work together to regain lost glory in science and technology: PM Hasina to Muslim community
In response to reserved seat MP Kha Mamata Lovely's question, the prime minister said that 555,134 families have been rehabilitated through the Ashrayan project.
Budget FY23-24: Focus should be on tackling macroeconomic challenges, says Dr Atiur Rahman
Bangladesh's upcoming national budget for FY23-24 should focus on macroeconomic challenges such as taming inflation, better revenue collection, rein in growing defaulted loans and IMF-suggested reforms.
This was stated by Dr Atiur Rahman, former governor of Bangladesh Bank in conversion with UNB on the expectations from the budget to be placed in parliament on June 1.
Dr Atiur said budget will certainly have to address a number of macroeconomic challenges. The foremost is, of course, the inflation which is still running high at more than nine percent.
“Bringing this down to 6.5 percent in the next fiscal year may not be easy unless we go fast towards market-based solutions of major macroeconomic challenges arising out of administratively controlled indicators like rate of interest and foreign exchange rates,” he said.
Read more: Tk337.60 crore budget for FY2023-24 approved for placing in Parliament
Thanks to the IMF programme, the budget may encourage regulatory authorities to go for an ‘interest rate corridor’ and a ‘single exchange rate’ that are long overdue. If we could have followed this time- tested path of market-driven macroeconomic management many of the ongoing challenges would have been addressed by now, said the development economist.
“Yet, it is better late than never,” he said adding “Of course, some sectors like agriculture, export and remittances would still need fiscal support and they must continue to get it.”
This, he said, will be desired support to the real economy which can contribute towards easing supply-side constraints to reduce inflation to some extent.
However, constraining demand pressure by raising interest rates still remains a major move to reduce inflation. “I hope the macroeconomic managers would like to take this prudent path in the next fiscal year without any hesitation.”
Read more: Curbing inflation without destabilising macroeconomic situation presents challenge for budget: Selim Raihan
He said the rich are currently enjoying huge advantages of negative rate of interest when adjusted against inflation rate may raise political economic hurdles against such a move. But the gains of long-term macroeconomic stability must guide the policy makers to overcome such pressures, said Dr. Atiur.
“I think one must not look at IMF conditionalities negatively as the budget makers have also been flagging such reforms for quite some years. The local economists in general have also been arguing for a more balanced budget with manageable deficits,” he said.
Bangladesh, of course, has done pretty well in maintaining budget deficits around five percent. This year it may go above five percent (5.3%) which is not that bad.
“To maintain this level of budget deficit we need to raise our domestic resources by reforming our tax administration system through higher levels of digitalization and a more efficient tax system,” Dr Atiur said.
Read more: Tk 75,000cr revenue shortfall to widen current fiscal’s budget deficit: CPD
The banking system has been well digitised in the meantime. Why should the NBR not take advantage of this modernisation of the money market and replicate a fully digital revenue administration system?, he questioned.
Since the inflation remains very high, the fiscal measures for higher levels of social security for the extreme poor and lower income groups in terms of higher food subsidies and support for agriculture must continue in the upcoming budget as well. Strategic support for digital infrastructures for making the economy smarter must also be the cornerstone of the next budget, he pointed out.
“Simultaneously, we must keep our budget as cautious as possible to restrain the inflationary outlook,” he noted.
Read more: Inflation, revenue shortfall, dollar crisis the major challenges for economy ahead of election-year budget
Curbing inflation without destabilising macroeconomic situation presents challenge for budget: Selim Raihan
Economist Dr Selim Raihan believes the National Budget of Bangladesh for the fiscal year 2023-24 is being presented at a difficult time, when it will be a challenge to devise policies to manage inflation while also maintaining a stable macroeconomic situation,
Dr Selim Raihan is Professor at the Department of Economics, University of Dhaka, and the Executive Director of the South Asian Network on Economic Modeling (SANEM).
Talking with UNB on the upcoming budget, Dr Raihan pointed out two major challenges--controlling inflation and macroeconomic management for the upcoming budget.
“Higher inflation for a long time creates instability in the domestic markets and lower-income people are affected severely,” he said.
Read more: No new pay scale, govt employees to get 20% dearness allowance in new budget
The government’s measures to cut inflation have not proved effective, so new measures to reduce inflation need to be included in the budget, he opined.
Dr Raihan said the monetary policy is not working to curb inflation as there is a mismatch with interest rates - the continued delay in withdrawing the interest rate caps also prolongs inflation.
Besides, a big challenge of domestic market management is that government agencies could not implement effective market management against monopoly businesses.
As a result, prices of many essential items are higher in the domestic market relative to the global market. Notably, prices of some items increase in Bangladesh at the same time that there is a downward trend in the international market, said Dr Raihan.
Read more: No let-up in safe drinking water scarcity in Khulna’s Dacop
Regarding macroeconomic management, he said reducing the defaulted loans and achieving the revenue collection target are big factors for stability.
Forex reserves management and foreign exchange rate fluctuation also worked for instability of the macroeconomic situation, which are required to make it stable, he said.
The International Monetary Fund (IMF) gave conditions for reducing defaulted loans to a desired level, but the latest update revealed no headway in that regard, which Dr Raihan said was alarming.
The IMF’s desired target of increasing the tax GDP ratio by 0.5 percent each year, till the 2025-26 fiscal, is also proving a challenge for the National Board of Revenue.
Read more: Inflation, revenue shortfall, dollar crisis the major challenges for economy ahead of election-year budget
The SANEM chief said although the revenue collection target increased every year in the budget, in the absence of any coherent plan and institutional capacity-building initiatives for NBR, there is almost no progress towards attaining those targets. In fact, the revenue collection shortfall keeps getting wider, he pointed out.
Dr Raihan suggested joint initiatives of Bangladesh Bank and the Ministry of Finance to reduce the defaulted loans, saying the central bank alone cannot handle the issue.
He also sought the central bank’s effective measures to ensure good governance in the banking sector, averting the pressure of any influential group.
Dr Raihan also suggested increasing allocation and coverage under the social safety net, to ease the woes of vulnerable groups.
Read more: Bank default loans surge to Tk1.31 lakh crore: BB
Inflation, revenue shortfall, dollar crisis the major challenges for economy ahead of election-year budget
Preparations for Bangladesh's national budget for the 2023-24 fiscal must balance expectations in an election year with the conditions of the International Monetary Fund (IMF), and tackle inflation, foreign exchange crisis and revenue shortfall.
Balancing public satisfaction and protecting the economy is a major issue. Economists say it has been seen in the past that election year budgets often prioritise public satisfaction over the improvement of the economy.
As such, the opportunity to deliver a budget that is satisfactory is very limited, said macroeconomist and public policy analyst Dr Debapriya Bhattacharya, who is also a Distinguished Fellow at the Centre for Policy Dialogue (CPD).
Read more: Safeguards are needed to protect vulnerable people under IMF-backed reforms: Debapriya
He told UNB, "Before the election, all governments want to give a budget that satisfies the people. But due to the financial situation, fiscal deficit, and trade deficit, the opportunity is very limited for the government. If such a big effort is made, it will have a negative impact on the overall economy."
"It is important to remember that this budget will be implemented by two governments. In this budget, flexibility must also be preserved. Because, if the government makes any big promises, there is doubt as to how much they can implement," he pointed out.
Dr Debapriya said that the budget is coming at a time of political uncertainty in the country. Plus exit from LDC, and the Covid-19 response revival are issues hanging over the budget.
Also read: 11pc of Bangladesh budget allocated for disaster risk reduction: State Minister
“Compared to any other year, this year's budget has to be prepared in a very complicated situation. Because earlier, there would be a deficit in terms of income and expenditure in the country, but there would be comparative relief in terms of foreign transactions. But this time it is not,” he opined.
Dr Debapriya said, "There has been a major disruption in the growth rate. It is going down further because there is no money, no dollar. There is a huge deficit in both areas to be dealt with together.”
So the government has to control imports and limit its investment program. As a result, next year's growth target should also be moderated.
Read more: Despite many challenges, Bangladesh remains one of the fastest growing economies in Asia-Pacific: Visiting IMF team
"The financial structure has actually weakened," he said.
Executive Director of the South Asian Network on Economic Modeling (SANEM) Salim Raihan, also a professor of economics at Dhaka University (DU), said that in the previous election years, the economy was not in such a crisis as this time.
"As a result, no new major pressure was created in the economy despite budgeting for public satisfaction at that time. But this time, if the budget is made considering only public satisfaction in view of the election, it will create new pressure on the economy," Professor Raihan said.
Read more: Bangladesh’s GDP growth rate will overtake China’s in current fiscal year, IMF predicts
G7 finance leaders vow to contain inflation, strengthen supply chains but avoid mention of China
The Group of Seven’s top financial leaders united Saturday in their support for Ukraine and their determination to enforce sanctions against Russia for its aggression but stopped short of any overt mention of China.
The finance ministers and central bank chiefs ended three days of talks in Niigata, Japan, with a joint statement pledging to bring inflation under control, help countries struggling with onerous debts and strengthen financial systems.
They also committed to collaborating to build more stable, diversified supply chains for developing clean energy sources and to “enhance economic resilience globally against various shocks.”
The statement did not include any specific mention of China or of “economic coercion” in pursuit of political objectives, such as penalizing the companies of countries whose governments take actions that anger another country.
Also Read: G-7 talks focus on ways to fortify banks, supply chains as China accuses group of hypocrisy
Talk this week of such moves by China had drawn outraged rebukes from Beijing. Officials attending the talks in this port city apparently balked at overtly condemning China, given the huge stake most countries have in good relations with the rising power and No. 2 economy.
The finance leaders' talks laid the groundwork for a summit of G-7 leaders in Hiroshima next week that President Joe Biden is expected to attend despite a crisis over the U.S. debt ceiling that could result in a national default if it is not resolved in the coming weeks.
Japanese Finance Minister Shunichi Suzuki said that Treasury Secretary Janet Yellen mentioned the issue in a working dinner, but he refrained from saying anything more.
While in Niigata, Yellen warned that a failure to raise the debt ceiling to enable the government to continue paying its bills would bring an economic catastrophe, destroying hundreds of thousands of jobs and potentially disrupting global financial systems. No mention of the issue was made in the finance leaders' statement.
The G-7's devotion to protecting what it calls a “rules-based international order” got only a passing mention.
The leaders pledge to work together both within the G-7 and with other countries to “enhance economic resilience globally against various shocks, stand firm to protect our shared values, and preserve economic efficiency by upholding the free, fair and rules-based multilateral system,” it said.
G-7 economies comprise only a tenth of the world’s population but about 30% of economic activity, down from roughly half 40 years ago. Developing economies like China, India and Brazil have made huge gains, raising questions about the G-7's relevance and role in leading a world economy increasingly reliant on growth in less wealthy nations.
China had blasted as hypocrisy assertions by the U.S. and other G-7 countries that they are safeguarding a “rules-based international order” against “economic coercion” from Beijing and other threats.
China itself is a victim of economic coercion, Chinese Foreign Ministry spokesperson Wang Wenbin said Friday.
“If any country should be criticized for economic coercion, it should be the United States. The U.S. has been overstretching the concept of national security, abusing export controls and taking discriminatory and unfair measures against foreign companies,” Wang said in a routine news briefing.
China accuses Washington of hindering its rise as an increasingly affluent, modern nation through trade and investment restrictions. Yellen said they are “narrowly targeted” to protect American economic security.
Despite recent turmoil in the banking industry, the G-7 statement said the financial system was “resilient” thanks to reforms implemented during the 2008 global financial crisis.
“Nevertheless, we need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook,” it said.
Meanwhile, inflation remains “elevated" and central banks are determined to bring it under control, it said.
Since prices remain “sticky,” some countries may see continued rate hikes, said Kazuo Ueda, Japan’s central bank governor. “The impact of the rate hikes has not been fully realized,” he told reporters.
Japan won support for its call for a “partnership” to strengthen supply chains to reduce the risk of disruptions similar to those seen during the pandemic, when supplies of items of all kinds, from medicines to toilet paper to high-tech computer chips, ran short in many countries.
Suzuki said details of that plan would be worked out later.
“Through the pandemic, we learned that supply chains tended to depend on a limited number of countries or one country,” he said, adding that economic security hinges on helping more countries develop their capacity to supply critical minerals and other products needed as the world switches to carbon-emissions-free energy.
Tensions with China, and with Russia over its war on Ukraine, inevitably loomed large during the talks in Japan, the G-7's only Asian member.
“We call for an immediate end of Russia’s illegal war against Ukraine, which would clear one of the biggest uncertainties over the global economic outlook,” the joint statement said.
The financial leaders took time to listen to ideas on how to focus more on welfare in policymaking, rather than just GDP and other numerical indicators that often drive decisions with profound impacts on people's well being.
“These efforts will help preserve confidence in democracy and a market-based economy, which are the core values of the G-7,” the finance leaders' statement concluded.
Suzuki said he and other leaders learned much from a seminar by Columbia University economist Joseph Stiglitz, a Nobel prize winner who worked in the Clinton administration and who has championed what he calls “progressive capitalism.”
It's a "very interesting view," Suzuki said, adding that “so far, we’ve been mostly focused on GDP and other numerical indicators."
Turkey’s Erdogan faces tough election amid quake, inflation
Early in his political career, a devastating earthquake and economic troubles helped propel Recep Tayyip Erdogan to power in Turkey. Two decades later, similar circumstances are putting his leadership at risk.
The highly divisive and populist Erdogan is seeking a third consecutive term as president on May 14, after three stints as prime minister, which would extend his rule into a third decade. He already is Turkey’s longest-serving leader.
The presidential and parliamentary elections could be the most challenging yet for the 69-year-old Erdogan. Most opinion polls point to a slight lead by his opponent, Kemal Kilicdaroglu, who heads the secular, center-left Republican People’s Party, or CHP. The outcome of the presidential race could well be determined in a runoff vote May 28.
Erdogan is facing a tough test in this election because of public outrage over rising inflation and his handling of the Feb. 6 earthquake in southern Turkey that killed over 50,000 people, leveled cities and left millions without homes. His political adversaries say the government was slow to respond and that its failure to enforce building codes is to blame for the high death toll.
Some even point to government malfeasance after a 1999 earthquake in northwestern Turkey near the city of Izmit that killed about 18,000 people, saying that taxes imposed from that disaster were misspent and worsened the effects of this year's quake.
Also Read: Erdogan hints Turkey may ratify Finland's NATO membership
The political party founded by Erdogan in 2001 came to power amid an economic crisis and the Izmit quake. His Justice and Development Party, or AKP, capitalized on public anger over government mishandling of the disaster, and Erdogan became prime minister in 2003 and has never relinquished leadership of the country.
Still, even with resentment directed toward Erdogan over his handling of the February quake and the economy, analysts caution against underestimating him, pointing to his enduring appeal among working- and middle-class religious voters who had long felt alienated by Turkey's former secular and Western-leaning elites.
Erdogan's nationalist policies, often confrontational stance against the West and moves that have raised Islam's profile in the country continue to resonate among conservative supporters. They point to an economic boom in the first half of his rule that lifted many people out of poverty, adding that his past successes are proof of his ability to turn things around.
“There is an economic crisis in Turkey, we can’t deny it. And yes, this economic crisis has had a huge impact on us,” said Sabit Celik, a 38-year-old shop owner selling cleaning products in Istanbul. “But still, I don’t think anyone else (but Erdogan) can come and fix this.”
“I think our salvation is through the (ruling party) again,” he said.
Many also point to major infrastructure projects begun during his tenure — highways, bridges, airports, hospitals, and low-income housing.
Erdogan himself has conceded that there were shortcomings in the early days of the February earthquake but insisted the situation was quickly brought under control.
Since then, he has focused his reelection campaign on reconstructing quake-stricken areas, promising to build 319,000 homes within the year. At rally after rally, he has touted past projects as proof that only his government can restore the region.
Erdogan has announced a series of spending measures to bring temporary relief to those hardest-hit by inflation, including raising minimum wages and pensions, enacting measures to allow some people to take early retirement, and providing assistance to consumers for electricity and natural gas.
He also has focused on the defense sector, boosting production of drones and fighter jets and building an amphibious landing vessel that the government describes as “the world’s first drone carrier.”
“While we were a country that could not even produce pins, an unmanned aerial plane flew above our skies the other day,” said Mustafa Agaoglu, another Erdogan supporter in Istanbul. “We now have our warships, our aircraft carriers, our roads, our bridges, our city hospitals.”
Erdogan has timed a host of openings to coincide with the election campaign. Last month, he presided at a ceremony marking the delivery of natural gas from recently discovered Black Sea reserves, offering free gas to households for a month. This week, he announced the discovery of a new oil reserve in the country's southeast, with a capacity of 100,000 barrels per day.
When he suffered a brief intestinal illness that sidelined him for a few days, he took part via video in an event marking the delivery of fuel to Turkey’s first nuclear power plant.
Then, on Sunday, he said Turkey’s intelligence teams had killed the leader of the Islamic State group in a special operation in northern Syria — an announcement that seemed designed to bolster his image as a strong leader.
In the upcoming election, six parties have united behind his main opponent, Kilicdaroglu, despite their disparate political views. The coalition, known as the Nation Alliance, has vowed to reverse the democratic backsliding and crackdowns on free speech and dissent under Erdogan, seeking to scrap the powerful presidential system he introduced that concentrates vast authority in his hands.
As in previous years, Erdogan has waged a bitter campaign, lashing out at Kilicdaroglu and other opponents. He accused them of colluding with what he calls terrorists. This year, he has also tried to disparage the opposition by saying it supported “deviant” LGBTQ+ rights that he says threaten Turkey's “sacred family structure.”
On Monday, he portrayed the election as a “choice between two futures.”
“Either we will elect those who take care of the family institution, which is the main pillar of society, or those who have the support of deviant minds that are hostile to the family,” Erdogan said.
He has expanded his alliance with two nationalist parties to include two small Islamist parties that call for amendments to a law protecting women against violence, arguing it encourages divorce.
Opposition parties again are complaining of an uneven playing field during the campaign, accusing Erdogan of using state resources as well as his government's overwhelming control over the media.
Some also are questioning whether Erdogan would agree to a peaceful transfer of power should he lose. In 2019, Erdogan challenged the results of a local election in Istanbul after his ruling party lost the mayoral seat there, only to suffer an even more embarrassing defeat in a second balloting.