Turkish municipal police fighting inflation by checking prices of goods at grocery stores
Istanbul, Turkey - Their toolkit is no match for the central bank’s, but after Turkish President Recep Tayyip Erdogan made repeated calls for a crackdown on price hikes, Turkey’s municipal police are on the frontlines of its war on inflation.
On a sunny October morning in Gungoren, a working class Istanbul neighbourhood and a stronghold of Erdogan’s Justice & Development Party, members of the zabita, as they are known in Turkish, were paying surprise visits to supermarkets in their van, perusing the shelves and issuing warnings to shop managers suspected of price-gouging.
“We compare price labels with prices at the cash register,” said Ahmet Ergal, one of the officers. “We also check product weights. We go to a few stores every day.”
The measures reflect a growing desperation among policy makers as the lira’s 38 per cent collapse this year wreaks havoc on prices, pushing inflation to a 15-year high near 25 per cent in September. Gains in producer prices have soared at nearly double that pace.
With few pain-free solutions available, the authorities are increasingly resorting to market interventions, from restricting the use of derivatives to demanding that banks charge below-market interest rates for home loans. Other steps include banning the use of foreign currencies in property sales and rentals, blocking price hikes in bread, and state banks selling subordinated bonds to the nation’s unemployment fund to shore up capital.
Treasury and Finance Minister Berat Albayrak on Tuesday announced a plan for an ‘all-out fight’ against inflation, saying that commercial banks will cut rates on some outstanding loans and companies participating in the campaign will reduce prices by ten per cent.
The central bank has already jacked up its benchmark interest rate by 6.25 percentage points to 24 per cent last month, arresting a run on the currency that at one point sent the lira plunging as much as 12.5 per cent in a single day. Short of delivering another wallop of monetary tightening in the face of Erdogan’s distaste for higher borrowing costs, policy makers are left to watch the zabita do what it can.
The inspections started soon after Erdogan’s appeal on September 14 for authorities to ‘work out control mechanisms’ against price hikes. They took off in earnest this month, when the president specifically called out the zabita.
At some stores, the cost of eggs and toilet paper has increased by 33 per cent and 25 per cent in just two weeks. In the cat-and-mouse game that’s playing out all over Turkey, Mustafa Turk - a zabita chief in Ankara - has his men check a cold-storage room to see if there’s any ‘hoarding’ of goods to be sold at a higher price. “Whoa! Is this gold or what?” asks a member of Ergal’s team, holding a 120-unit pack of dishwasher tablets in his hand. At 105 liras, the price is about six per cent of the monthly policing prices