Is it an election move that Turkey wants to postpone its natural gas debt?

WALL – It has been claimed that Turkey wants to postpone its natural gas debts to Russia until 2024. Some of the experts evaluated this claim as a new move towards the election. Some names, including CHP Istanbul Deputy Özgür Karabat, claimed that Turkey was living a ‘moratorium’.

We talked to academician Oğuz Demir and economist Barış Soydan about the economic and political consequences of Turkey’s desire to delay its natural gas debt until 2024. According to both names, the government is trying to prevent the dollar from making an upward move before the election.


The first signals about Turkey’s natural gas debt to Russia came to the fore at the 22nd Summit of Heads of State of the Shanghai Cooperation Organization, which took place a few weeks ago. President Recep Tayyip Erdoğan and Russian President Vladimir Putin, who met here, announced that they had discussed the grain trade between the two countries, the natural gas line and the Akkuyu Nuclear Power Plant. Putin also stated that the agreement regarding the payment of 25 percent of the payments in the shipment of Russian gas to Turkey in Russian rubles will enter into force soon.

Oguz Demir

Turkey meets 40-45% of its natural gas needs from Russia. The rest is imported from countries such as Iran, Libya and the USA. Assoc. Dr. Oğuz Demir pointed out that Turkey is an energy importer country and said, “We have to pay in foreign currency for every barrel of oil and every cubic meter of gas that comes to Turkey. This currency has to get out of the domestic market somehow. Until today, the Central Bank gave the foreign currency directly to BOTAŞ. Now Central Bank reserves are negative. If BOTAŞ has to buy foreign currency from the market at some point, there may be an upward movement in foreign currency.”

He states that the government is trying to prevent BOTAŞ from having to find foreign currency, either internally or externally, by postponing the debt. According to Demir, the demand for foreign exchange is being tried to be brought down before the election.


The ‘moratorium’, which means that the borrower declares that he will not pay some or all of his debts due to his inability to pay, has become one of the concepts used in social media to describe the situation. Demir, stating that Turkey is far from the moratorium, is against the careless use of this concept. Demir underlines that Turkey has always paid its debts in its history, saying, “Those who say this are nonsense, so to speak.” Saying that debts can be paid in installments or even postponed, Demir draws attention to the main problem: “The treasury borrows and pays, the main problem is the shortage of foreign currency…”

“Things should never have come to this point,” said Demir, adding, “In the current situation, the government is trying to achieve a political result by preventing the foreign exchange from jumping before the election. The situation is just that. This is not the right thing, but it is also not right to take it and say ‘Turkey is going to the moratorium’.”


The government started to support energy bills in housing after the jump in foreign currency last year. Accordingly, the state pays 80 lira of the 100 lira natural gas bill. Demir emphasizes that even though this seems like a favor, it has a price: “This is not a favor done by the state for us, it is the price of the jump in the exchange rate last year. If the exchange rate had not jumped so much, we could have paid much lower bills. Right now, they are trying to solve the cost of their own mistakes at another price.”

Speaking about the comments that came to the agenda, ‘the government’s debt will be postponed and the government will change it after the election’, Demir says, “All governments plan to win the election, not to lose it, and the government makes these moves to win.”

Baris Soydan

Public TV writer and economist Barış Soydan also agrees with Demir. “Last year, the dollar rose 44 percent. If something similar happens again, I think it will pull the AK Party’s rope,” Soydan says, adding that the government is acting with a concern to keep the currency.

Reminding that there was a decrease in confidence in the government during the times when the dollar rose very rapidly, Soydan said, “Another reason is that there is a pass-through from the dollar to inflation. That is, theoretically, when the dollar doubles, inflation increases by 50 percent. Therefore, the government does not want this. That would be the worst-case scenario before the election.”

Stating that the most serious opposition to the AK Party is the economy and the dollar, Soydan emphasizes that the opposition is not strong in this regard.

“What happens to the dollar if plans and strategies don’t work?” Soydan’s answer to our question is:

“There are different views on this issue. The Institute of International Finance has a dollar-lira fair value rating, 21.5 liras. It’s a serious establishment. However, there are also those who say that it will be 30 liras. It’s hard to predict. Because in such periods, the value of the dollar can exceed what it should be. Let’s say its fair value is 21.5 liras indeed, but in case of panic, it could be 25 liras.”

Explaining that in order to prevent such a scenario, the Central Bank reserves were sold and the dollar was kept, Soydan said, “The net reserves of the Central Bank are 9 billion dollars. Therefore, it will either find money for Russia or reduce the outflow of money. Money was found in August, but it did not continue, and such an offer was made to Russia to reduce the outflow,” he says.


Assuming that the dollar is held until the election and the inflation is at a certain rate, what would be the return of the economic policies carried out so far? Soydan describes the future of the economy as a ‘disaster’ if the AK Party government wins the election. Soydan explains the possible ‘disaster’ as follows: “Turkey will either go to the IMF or apply extreme austerity measures. Let me give an example; In a day where natural gas will increase by 70 percent. Time will come for everything from needle to thread. If they go to the IMF, something similar will happen, and if they don’t, they will have to do it themselves. If they do not do this, Turkey will become like Venezuela. If Turkey does not go bankrupt, inflation goes to 200 percent, companies go bankrupt… If the AK Party wins, Turkey will become unlivable.”

Soydan states that if the current government changes and the environment of trust is established, there will be an inflow of foreign capital into Turkey and this will create serious relief. Soydan finally said, “For the foreign flow, the conditions of the world markets must be suitable. This means the appreciation of the Turkish lira. When TL gains value, it will reflect on inflation. In a change of power, things can pick up quickly. At least in this way, Turkey can gain time for a year, two years. “If this process is used to create and implement the right economic policies, we have a chance to exit.”