Erodan's Turkeys Coming Home To Roost
"Rising interest rates in the United States and in Europe have made investors less tolerant of emerging markets. Foreign investors filed money into Turkish assets for years, lured by what appeared to be a stable economy and higher returns. But as interest rates rise in countries seen as safer, the relative attractiveness of riskier investments wanes. A crisis like the one in Turkey may be all it takes to send them fleeing."
"The crisis, caused by soaring inflation, economic mismanagement by the Turkish government and tensions with the United States, has raised concerns over whether emerging economies that have benefited in recent years from foreign investment may also be vulnerable."
"On Monday Turkey's central bank announced measures to help the country's banks manage their liquidity, but the Turkish lira and Turkey's stock market continued to slide."
"Problems in Turkey have been brewing for years, but Turkish assets have fallen steeply in recent days as questions have mounted over the country's prospects. Price increases have quickened and President Recep Tayyip Erdogan had undertaken increasingly authoritarian moves, from the appointment of a relative as an important minister to the erosion of the central bank's independence.
Financial Post news wires
"The aim of the operation is to make Turkey surrender in all areas, from finance to politics."
"We are once again facing a political, underhanded plot. With God's permission, we will overcome this."
"We [Turkey and the United States] are together in NATO and then you seek to stab your strategic partner in the back."
"They [social media accounts critical of Turkey's finances] are truly a network of treason. We will not give them the time of day ... We will make those spreading speculation pay the necessary price."
Turkish President Recep Tayyip Erdogan
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| Turkish President Recep Tayyip Erdogan addressing the 10th Ambassadors’ Conference at the Presidential Complex in Ankara today Photograph: Kayhan Ozer/AFP/Getty Images |
He set about identifying and rooting out the identities of all those he claimed to be conspiring against him, had them imprisoned and set the entire country on edge. His vicious vendetta against the minority Kurdish population and his military attacks against them in their Kurdish enclaves has served notice on Turkish Kurds that their dreams of a Kurdish homeland will come no closer to fruition than ever before under Erdogan's rule.
Erdogan's refusal to release an American cleric from a Turkish prison is being used as a bargaining tool to force the United States to extradite the Turkish cleric who was once allied with Erdogan but has long since decried his rule. Fethullah Gulen, in self-imposed exile, living for years in the United States, has countless followers in Turkey, and it is he whom Erdogan has accused of spearheading the coup that almost succeeded several years ago in removing Erdogan from power. Washington's refusal to hand him over to stand trial for treason in Turkey has not endeared it to Erdogan.
The contest of nerves between President Trump and Erdogan is, in effect a no-contest. The U.S. has the financial, political, international clout to destroy the Turkish economy, already faltering through gross mismanagement. Erdogan and his Justice and Development party have neither delivered justice nor development for the country. It has overturned close to a century of Western-inspired democracy that Mustapha Kemal Ataturk brought to Turkey's politics when he transformed it, separating religious and state affairs.
Erdogan now accuses Donald Trump of undermining Turkey through waging an "economic war against the entire world", and Turkey in particular, that newly imposed tariffs on Turkey represent a "stab in the back", deepening its currency crisis. Erdogan has appealed to Turks to ditch their gold, their foreign currency, their U.S. greenbacks into lira, and it appears that Turks are unimpressed, giving Erdogan reason to doubt their loyalty - to his reign, at the very least. But he has been more than successful in persuading Turks that it is they, with him at the helm, against the rest of the world wishing Turkey ill.
The government's own failed economic policies have caused the lira to plunge to record lows. International Monetary Fund advice is to raise interest rates, but Erdogan has instructed his central bank to leave them as is, continuing to cast blame on outside forces for the lira's precipitously disastrous loss, recording an all-time low against the dollar. Having tormented those he claims are Gulenists and as such enemies of the state, Erdogan now focuses on taking legal action against social media accounts for "creating a negative perception" of the economy.
New alliances for Turkey are on the horizon, hinting at bringing ties with Russia, Qatar and China a whole lot closer. But in fact he has been flirting with Russia and China to bolster existing ties in any event, going so far as to discuss with Russia weaponry acquisition that would put his military at odds with the rest of NATO. Turkey's foreign minister, Mevlut Cavusoglu called on the U.S. to "remain loyal to ties based on traditional friendship and NATO alliance. We support diplomacy and negotiations but it is not possible for us to accept impositions", he warned.
Cutting off ties with NATO would be the best thing that happened with that organization in quite a while. As for traditional friendship with Western countries -- that went out the window when Erdogan and his Islamist party took over Turkey.
Labels: Accusations, Aggression, Economy, Erdogan, Islamism, Turkey
posted by Pieface @ Wednesday, August 15, 2018
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