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23 August

Economic news fit to print

Does timorous business reporting handicap economic growth in Turkey?

Economics is often called the “dismal science,” but readers of the business pages of the Turkish press might well think otherwise. In a nation where the press is tightly controlled, economic reporting is hamstrung by government pressure and self-censorship, leaving news consumers with an upbeat but often misleading portrait of the Turkish economy.
“It is almost suicidal to sensibly criticize government economic policies. So for the average Turkish reader to get sensible economic news is nearly impossible these days,” says Atilla Yeşilada, an economist and columnist who has written for Bloomberg, Al Jazeera and numerous Turkish outlets. “Economic coverage has weakened substantially—lots of writers have been fired or forced to leave.”
The current state of emergency gives authorities the right to “to control if deemed necessary and to restrict and prohibit every kind of broadcasting and words, printings and pictures, films, records, sound and image bands (tapes).” However, those powers already existed, at least in theory, according to the article 107 of the Capital Markets Act which prohibits false claims intended to influence investor decisions. But its vague wording, targeting those who “provide news, analysis, commentary, or prepare reports,” could catch journalists and columnists in a web that carries a potential sentence of five years.
That Article 107 has not been commonly used to silence media does not mean pressure did not exist. Instead, the government has used direct, personal intervention in newsrooms—as was seen during the Gezi Park protests in 2013, when government advisors told news editors how to tailor coverage, or in in leaked audio tape of President Erdogan himself berating the owner of Milliyet newspaper the following year. That parent companies of media organizations are reliant on government contracts makes them vulnerable to interference.
It is not just news in the public realm that is affected. In the clampdown following the failed July 15 coup even private banks were asked to provide regulators with the advice they were sending clients, Bloomberg reported.  The state-run Anatolian Agency quoted Mehmet Ali Akben, head of the Banking Regulation and Supervision Agency (BDDK) warning against circulating bad news that might turn expectations sour in the wake of a downgrading by the rating agency Standard & Poors. Mert Ülker, a strategist with Ak Investment, was subsequently stripped of his license by the Capital Markets Board for a July 18 report suggesting the coup attempt may give President Erdogan more power.
Economic journalists also claim that government pressure forces their key sources—financial analysts—to keep quiet. “Even in the professional community, people who work for brokerages or investment banks tone down their criticism,” according to Yeşilada, speaking before July’s attempted coup.
Bankers have become more reluctant to talk in recent years, according to an editor at now defunct Today's Zaman. He recalls pursuing a story last year about a sharp drop in the value of the Turkish lira compared to the U.S. dollar, an embarrassing development for the government.
“The people who I called, would say ‘You are not going to publish this, are you? Not with my name,’” Hava said. In time, the option to publish critical commentary did not exist. Court appointed administrators took over the newspaper group in March and Hava’s articles were continuously spiked before he was fired the following April.
“Banking analysts after Gezi have all been basically silenced. It’s become really hard to talk,” says a veteran Turkish economic journalist, who, tellingly, spoke with P24 on the condition of anonymity. The result, he says, is a simplified form of economic journalism, which avoids the details.
He cited the example of a June data release that showed a huge surplus. On closer look, this strong performance was based on one-off anomalies, like the Central Bank transferring its annual profit to the Treasury. “That’s billions of liras. If you strip that out, then the budget doesn’t look good. Any number-crunching journalist would notice that,” he said. However, none of the reports he saw made mention of the reason behind the good news.
Journalists work in newsrooms where the boundaries between what you can and can’t cover are well defined. “You get rejected, rejected, rejected. And then you stop suggesting. You understand the rules, and if you insist on pitching, you’re going to be singled out. Everyone knows that. It’s self-censorship at every level,” the journalist said.
Atilla Yeşilada agrees, adding that many economic journalists are also financial consultants, and a reputation for trouble making affect that client base, too: “It’s a carrot and stick policy. If you don’t walk the walk and talk the talk, you get fired, and relegated to the boondocks.”
For fourteen years, President Erdoğan’s Justice and Development Party (AKP) has cultivated a reputation as the harbinger of Turkey’s economic expansion—it’s unsurprising, then, that any topic challenging this economic narrative is targeted for censorship. Large construction companies—“anyone involved in the mega-projects”—are shielded from negative press because of their closeness to the government, Yeşilada said.
Another no-go area for business writers is central bank independence and government pressure to drive down interest rates, said  Emre Deliveli, an economist and former columnist for Hürriyet Daily News.
“It’s very difficult to find criticism of the interest rate policy. Basic economics tells you that if you cut interest rates you boost demand, and more demand means goods become more expensive, and prices increase,” says Deliveli. But Erdoğan is ignoring that maxim. “He’s arguing for the opposite. He’s pressuring the Central Bank to cut.”
Deliveli has seen the suppression of these kinds of stories firsthand: He estimates that at least a dozen of his economic and financial columns were shot down by editors, between 2008 and 2015, for taking aim at sensitive topics. (One nixed column facetiously compared the cost of Turkey’s new presidential palace to the cost of Hitler’s Reich Chancellery, for example.) Other third-rail economic topics include corruption, real estate companies close to the government, inflation and foreign investment.
Economic journalists interviewed by P24 also agreed that government intervention and self-censorship has increased over the last five to six years, with a few key events acting as watersheds for even greater pressure: the exorbitant tax fine against Doğan media group in 2009, the AKP victory in the 2011 election, the Gezi park protests in 2013, and Erdogan’s accession to the presidency in 2014.
Television channels arguably face greater pressure than newspapers, given their wider viewership and the constant vigilance of RTUK, the state broadcast regulator. This difference is even greater when it comes to economic journalism—Bloomberg HT is now the only financial news channel in Turkey, after CNBC-e was sold last fall.
Of course, some economic stories are too glaring to be censored. Sharp declines in tourism, for example, have undeniable, dire consequences for employees in the leisure and hotel sectors. Rising petrol prices would be impossible to sweep under the carpet. And some media outlets still chase controversial stories. Cumhuriyet, for example, is working with the German magazine Suddeutsche Zeitung on the Turkish connections in the Panama Papers leaks—but its circulation is relatively low (about one-sixth of Sabah’s circulation) and a court in Istanbul blocked online access to its coverage of the offshore leaks.
The thorough explanation and investigation of economic issues still requires capable, diligent work by the media—and Turkey faces several large, looming economic questions. Will foreign investment fall due to perceived instability and terror attacks? Is the government’s emphasis on large, one-off construction projects a sustainable economic development policy? How is the Turkish economy accommodating the growing number of Syrian refugees?
As far as this last question is concerned, there are some commentators who would legitimately argue that the government’s liberal immigration policy has been a huge plus for the economy. The question is whether anyone will get to hear the argument.
As Ergin Hava sees it, soon there may not even be economic reporters left to answer these questions: “It’s not the final nail in the coffin but we’re getting close.”


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