Erdogan's palatial stimulus package

Turkey President Recep Tayyip Erdogan has of late been ridiculed in the international press for arguing that Muslims discovered America and that women and men should never be seen as equal.

But his claims may have been less a declaration of his beliefs than an attempt to divert attention from the criticism over his new residence: a lavish, 1,000-room presidential palace four times the size of Versailles.

The main problem is not that the palace was illegally built on Ataturk Forest Farm, a crucial green lung in Turkey’s capital, Ankara, set aside by the country’s founder, Mustafa Kemal Ataturk, and protected from development. Nor is it that the palace had been intended for the prime minister but was snatched away by the president after Erdogan won that position in August.

The real issue is the price tag. In mid-November, Turkey’s Finance Minister Mehmet Simsek told parliament that the palace would cost not $350 million, as initially estimated, but $615 million. Days later came word that construction is far from finished. Building a separate 250-room president’s residence could push the price tag toward $1 billion.

More than 60 percent of Turks see the new palace as a waste of money, according to a recent MetroPoll survey. Observers outside Turkey have launched more personal attacks. “This palace amply testifies to Erdogan’s megalomania, his lust for rank and opulence and his yearning to revive the ancient Ottoman imperial wealth and glory, with himself on the sultan’s throne,” Sayed Abdel-Meguid wrote in Cairo-based Al-Ahram.

Ankara has defended the palace on multiple fronts. Justice Minister Bekir Bozdag pointed to recent economic growth. “Turkey’s economic condition was much worse when the Çankaya Mansion and the Pembe Köşk were built,” he said, referring to Turkey’s previous presidential homes. “The conditions of the past and today are not the same.”

Taking a different tack, Bozdag advised people to call the new complex a “service building” rather than a palace (though the government named the complex Ak Saray, or White Palace).

A pro-government newspaper trotted out a character reference. “Recep Tayyip Erdogan does not have any aspiration for power and luxury,” Faruk Koca, the owner of the Ankara home where Erdogan lived while prime minister, told Hilal Kaplan, a columnist at Daily Sabah.

Kaplan went on to explain that the palace will house a variety of state institutions and allow for a safer, showier welcome for visiting dignitaries, serving as a symbol of Turkey’s new prestige.

Perhaps Ankara should run with this position and announce that Ak Saray is part of a government initiative to create jobs, spur economic growth and burnish the country’s tarnished image through massively oversized construction projects. Turkey, after all, already has more than half a trillion dollars’ worth of planned, ongoing or recently completed building projects across the country.

The two dozen luxury towers of Maslak 1453, an $8.4 billion residential project along the edge of an Istanbul forest, will make Ak Saray look like a gecekondu (shanty). A few miles away, the $2.5 billion Zorlu Center offers pricey residences, a five-star hotel, a high-end mall and a massive performing arts center.

A rail tunnel under the Bosporus, opened last year, cost about $5 billion. A second, for vehicular traffic, will cost another $2 billion. Istanbul’s third airport, its third bridge across the Bosporus and its new financial center, all under construction, are expected to cost $14 billion, $3.5 billion and $2.6 billion, respectively. 

A proposed canal cutting from the Marmara Sea to the Black Sea on Istanbul’s European side could cost as much as $30 billion. Two planned nuclear plants will total $42 billion, and a $3 billion dam and hydroelectric plant and a $3.5 billion irrigation project are under construction in the country’s southeast.

The list goes on, including a hilltop mosque fit for a sultan on Istanbul’s Asian side that may rival Suleimaniye, Turkey’s largest mosque, on completion in 2016. Neo-Ottomans go big, officials from Erdogan’s Justice and Development Party (AKP) could argue, or they go home. “The new Turkey needs to manifest itself in certain ways,” Erdogan said in October.

Critics of the government’s plan might point out that last year’s nationwide protests were sparked in part by hyperconstruction and that infrastructure, housing and even places of worship are necessary, while a 1,000-room palace — paid for by taxpayers — is frivolous.

In response, Erdogan could remind Turks that he has to live somewhere and that he is the country’s leader. And yes, he also needs the $135-million upgrade of his two Ottoman-era mansions in Istanbul and his Mediterranean getaway, as well as the $185 million retrofit of an Airbus for personal use.

Embracing his inner populist, the president could add that every Turk deserves a palace to call his own — perhaps not one on the scale of Ak Saray but a comfortable, modern home. Toward that end, Ankara has launched a $400 billion national initiative to knock down or reinforce all homes at risk of earthquake damage over the next two decades.

This will mean rebuilding more than a third of Turkey’s housing — about 6.5 million housing units. The first phase, involving 14,000 buildings across 50 Istanbul neighborhoods, has already begun.

Taking a lead role in the initiative is Turkey’s public housing agency, TOKI, which could also head up the palatial stimulus package.

It reports to the prime minister’s office and has over the past decade built some 600,000 homes across Turkey. It can alter zoning plans on a whim and, thanks to recent legislation, ignore environmental concerns.

TOKI developed $7 billion worth of land in 2012 and has near zero financial oversight and a bevy of government-friendly construction firms at its beck and call. It has built malls and mosques when politically advantageous. According to a recent report from Hurriyet, it has also built homes for high-ranking AKP officials.

It even has experience with luxury, partnering with Turkey’s largest real estate firm to build Maslak 1453 and providing a $140 million loan for the construction of Ak Saray. Of course, some Turks may not appreciate the public housing agency’s predilection for grand estates.

“We need to question whether TOKİ's projects really target and provide the financing of the housing projects for lower- and middle-income groups,” Bulent Tuna, then-president of the Union of Chambers of Turkish Engineers and Architects, said in 2008. “It needs to be supervised to reveal whether the organization acts in accordance with the criteria of economic efficiency and profitability.”

And yes, TOKI may have a tendency to fill the pockets of the powerful. Aykut Erdogdu, an opposition parliamentarian from Istanbul, published a report in 2012 alleging corruption in TOKI to the tune of nearly $400 million. Many key figures in a vast corruption probe launched a year ago (and since dismissed) were involved in real estate and development. Turkey’s leading business association just released a survey of businessmen expressing concern over systemic and increasing corruption, particularly in the construction sector, and in the past year no country fell further in Transparency International's corruption index than Turkey.

Yet Turkish voters have shown time and again that abuses of power bother them only when they coincide with economic malaise. The country’s recent economic boom was in part fueled by construction. With growth slowed, the government could say it needs to invest more heavily in the sector, especially if it hopes to achieve its dream of becoming one the world’s top economies by the centennial of the republic in 2023.

Sure, a recent International Monetary Fund paper found that when construction represents 9 percent or more of GDP, as is nearly the case in today’s Turkey, it can lead to economic trouble. And OK, in early 2014 housing sales in Turkey dropped 10 percent from the year before, even as building permits were issued for nearly 90 percent more construction, prompting many analysts to warn of a housing bubble.

But like most international coverage of Turkey, that’s just hot air. The presidential palace is real — and enormous. You can’t visit it, but you could have your very own. It won’t include sycamore and hornbeam trees imported from Germany, but it will be just as strong a symbol of the new Turkey.