Since the beginning of the year the Turkish lira has lost 44 percent of its value against the dollar, and it continues to plummet. There are many reasons for this fall in value. First, one might point to the economic recovery plan that Turkey followed, beginning in 2001, the brainchild of the economist Kemal Dervish, according to which, in order to raise money, the Turkish state began selling off — privatizing — a great many state-owned factories and companies to foreign investors. To attract them, they were given good deals. But once these properties were sold off, there were ever fewer left to be sold, until the Turkish state found it had nothing left to sell. Investors were understandably spooked.
Foreign investors, like investors everywhere, like stability. They don’t want surprises. But Turkey has an authoritarian ruler who is given to crazed conspiracy theories, sudden outbursts against his “enemies,” and grandiose plans. After the failed coup of July 15, 2016, which Erdogan blamed on Fethulleh Gulen, a religious leader now living in Pennsylvania, his government detained more than 110,000 people, and arrested nearly 50,000 of them. These included high-ranking military officers, lawyers, judges, university rectors, professors, journalists (more than 150 were jailed — Turkey now has more jailed journalists than any other country in the world). Many among the intellectual elite of Turkey have either been jailed, or lost their jobs, or have gone into exile — the greatest brain drain in Turkish history. Erdogan has been turning back the clock in Turkey, de-kemalizing and de-secularizing the country, as he attempts to re-Islamize it; this alienates the very people the country — and its economy — need. The educated young are leaving the country.
Here is one report: “These Turks would rather leave their country than continue living under Erdoğan,” by Marga Zambrana and Zekine Türkeri, GlobalPost, June 22, 2018:
Bilal Dündarlioğlu, a 34-year-old information technology engineer from Niğde, in Turkey’s Central Anatolia region, says he loves his country.
And in the next breath, he explains why he wants to leave.
“Human and political conditions are not good,” he said. “I am not quite happy with the [situation] here — there is no justice.”
“I am not happy with the economy either,” he added. “Taxes are too high and salaries too low.”
Dündarlioğlu is not alone. In Istanbul, most young people interviewed by PRI say they either know someone who has left Turkey or wants to. Many say they’re thinking about it themselves. In cities from Barcelona and Madrid to Stockholm, Berlin and Athens, researchers say Turkish diaspora communities are growing. And for the first time in modern Turkey’s history, it seems the exodus isn’t mainly due to a search for economic opportunity.
There are no official figures on emigration compiled by the Turkish government that break down the motives behind people’s departure. But recent emigres and would-be emigres told PRI their decision was about safety from persecution, having a voice in society and, even more crucially, an uncertain future in the so-called “new” Turkey under President Recep Tayyip Erdoğan. They say that Turkey went from being a haven of a stability and economic growth in the region to a country with increasing societal divisions, rising violence and a government that continues to become increasingly authoritarian.
“Many people — particularly young, secular and educated Turks — say they have had enough.
Here, unfortunately, a human being has no value and cannot express oneself,” said Dündarlioğlu, adding that his final decision to leave will depend on what happens in the June 24 election, which could give Erdoğan even more power. [the election did in fact give Erdogan broad new powers] “If you support the government, maybe you will be valued.”
Erdogan’s dictatorial ways are driving out the very people the Turkish economy most needs.
Erdogan has sent troops to Syria, to fight both ISIS and, even more, the Syrian Kurds. For if the latter were to retain their autonomy, this might give the Kurds in Turkey ideas about obtaining autonomy for themselves or, still more threatening to Erdogan, even independence. Fifteen million Kurds in Turkey now see Turkish troops killing Kurds in Syria. This contributes to a sense of anxiety — both theirs and that of the Turks who surely worry about how the Kurds in Anatolia will react to the suppression of their fellow Kurds in Syria. Erdogan’s military venture in Syria is seen by investors, rightly, as another source of politico-military instability, with no prospect in sight of Erdogan bringing these troops home.
Another source of worry are Erdogan’s constant threats against Israel, including his astonishing call this past March — in an article published by the editors of Yeni Safak, the newspaper that serves as his mouthpiece — for the creation of an “Army of Islam” to attack Israel from all sides at once. Erdogan clearly see himself as the leader of such an army. This, too, is not the kind of proposal that reassures investors.
Erdogan seems to think that the fall in the value of the lira is due to another — in his mental universe, there have been so many — “conspiracy.” It is true that in late August, President Trump raised tariffs on Turkish steel and aluminum. That may explain a very small part of the drop in the lira. But for many months, and long before these tariffs were put on, the lira had been steadily falling. Trump cannot be blamed for that.
Erdogan’s neo-Ottoman dreams expose him as unrealistic. He continues to think of himself as the natural leader of the Muslim world, while at the same time he continues both to push for full membership in the E.U., and to remain a member of NATO, a military alliance of Western democracies whose chief threat now are the very Muslims whom Erdogan wishes to lead. Turkey under Erdogan will never be given full membership in the E.U., given his human rights record, and there are many in the West who have come to believe that under Erdogan, an Islamic supremacist, Turkey ought not any longer be a member of NATO.
As for Erdogan’s dream of leading the Islamic world, he apparently does not realize that the Arab states have historical memories of their Ottoman Turkish overlords, and are unlikely — Erdogan seems not to grasp the significance of that history — to welcome any new Turkish master in the making. At home, he’s built himself a 1,150 room White Palace, the Ak Saray, confirming — if such were needed — his egomania and grandiose sense of entitlement as a veritable padishah. All of this — Erdogan’s mercurial behavior, his rants about his “enemies,” his baseless attacks, his perfervid antisemitism, his driving the most talented young Turks out of the country because of his authoritarian ways and mishandling of the economy, his alienating the Americans and destroying what was once Turkey’s most solid alliance — has consequences among investors. They want stability and sobriety. With Erdogan in power, they get neither.
There is no conspiracy by the United States to destroy the Turkish economy. The tariffs on Turkish aluminum and steel will be lifted just as soon as Pastor Andrew Brunson is released. (The charge against him — a Christian pastor — of being an agent of Fethulleh Gulen, a Muslim cleric — is ludicrous on its face.) In fact, the tariffs were imposed only after Trump thought he had a deal. He had asked the Israelis, as a favor, to free Ebru Ozkan, a Turkish woman who had been detained in Israel because of her ties to Hamas. The notion was that Ozkan would be freed in exchange for the Turks letting Pastor Brunson go. The Israelis freed Ozkan, but the Turks did not free Paster Brunson. Instead, they made another demand: that the DOJ drop its investigation into Halkbank, one of the largest state-owned banks in Turkey which is facing potentially crippling fines for possible violations of US sanctions on Iran. The Americans refuse to discuss this until after Pastor Brunson is freed. It is Erdogan’s intransigence about Brunson that is responsible for the continuing burden of those tariffs that Trump is perfectly ready to remove. There is no conspiracy by anyone. It’s very simple: we don’t like our citizens held for years on false charges. The only surprising element in Erdogan’s behavior is that he has not yet tried to blame “Jewish bankers” for the collapse of the lira — perhaps that’s still coming.
Erdogan has appealed to both the nationalist and religious fervor — patriotism and faith — of the Turks, in asking them to sell dollars, euros, and gold and buy liras instead. Very few have done so. The lira has not moved since he made that appeal in mid-August. Incidentally, it would be fascinating to find out if Erdogan and his family sold all their dollars, euros, and gold to buy liras — why do we suspect that information will never be forthcoming? The appeal Erdogan made to buy liras in mid-August was the same one that he had made last May, and nothing much came of it then. The lira kept falling, and those few Turks who did listen to him and bought liras, and held onto them, lost a lot of money.
There is no reason to think that Turks today who have any money left to invest, so poor is the overall economy — the upper and upper-middle classes — will put that money into liras. These are the people who have been most affected, negatively, by Erdogan’s war on secularism, and by his rounding people up and arresting them with the absurd charge that they are “gulenists” who were involved in the failed coup. It is they who feel most keenly the erosion of Turkish democracy, the assault on human rights, the increasing authoritarianism of Erdogan. It is they who understand that the sell-off of state-owned properties that began in 2001 could not continue forever; eventually the state ran out of properties to sell. It is they, too, who understand how Erdogan is regarded abroad, with his wild conspiracy theories, his deep antisemitism, his anti-Western views, his grand plans to lead an Army of Islam against Israel or, in another version, to lead the Islamic side in a war he has foretold between “the Cross and the Crescent.” They know, as Erdogan apparently does not, that Turkey now has virtually no chance to be admitted to the E.U., given Erdogan’s suppression of human rights. As for Turkey’s membership in NATO, how long can that continue, given that the greatest threat to the democratic members of NATO are the very forces of Islam that Erdogan wishes to lead?
Erdogan, unhinged, is the main reason for the fall of the lira. Here’s what he has to do to stop the slide:
First, he must free Pastor Andrew Brunson. If he needs to save face, by pretending that there really was a case against Brunson, then he should put him immediately on trial, have him acquitted of all charges as speedily as possible — he controls all the judges and can arrange for a quick acquittal — and put him on a plane for Washington.
Second, he should respond politely to the lifting of those latest tariffs, by Trump, just as soon as Pastor Brunson has landed at Reagan International Airport. He can claim a victory, announcing from Istanbul that “Turkish justice, as everyone can see, is fair, and I am glad that President Trump agrees, and has lifted those tariffs.”
Third, he should resist the temptation to make any more wild pronouncements that scare foreign investors. No more of this “gulenist” conspiracy business. This has been going on for two years now. Erdogan should just stop talking about it, stop demanding that the Americans extradite Gulen. As for all of those soi-disant “gulenist” political enemies rounded up two years ago and still in jail, they need to be freed. Release them in an act of presidential magnanimity. Especially the journalists. A way to demonstrate calm self-confidence — I’m in charge, there is no serious threat to the Turkish state — that will reassure investors.
Fourth, he should declare that the new, 1,150-room Presidential Palace (that has been much criticized) will be turned into offices and, possibly, as well, affordable apartments for civil servants. He, Erdogan, should announce his decision to return to his previous residence, for upon reflection he thinks it unseemly that as president he should inhabit such a gigantic structure. Such becoming self-abnegation from Erdogan, so unlike him, will win points.
These are some of the things Erdogan, in a new, more modest and sober version, could do to help win back, eventually, the confidence of both foreign and domestic investors. And that, in turn, will cause the lira to rise. It has primarily been Erdogan’s antic disposition — in the Shakespearian sense — that brought the lira down. Trump’s tariffs played only a most minor role — and only a chastened Erdogan can bring it back up.
That’s a tall order. But if he wants to lift the lira, by restoring investor confidence in Turkey, he has to start by changes in behavior that will restore confidence in himself. It is the only way.
Ferd III says
Another failed Moslem state. A delusional Mohammed-wannabe madman at the helm.
Totalitarian, intolerant, Sharia based – hateful of the modern world and civilisation. A NATO ally? What a joke. They use NATO for their own purposes and contribute nothing.
In the 1850s and 60s the British and Russians could of, and should of, partitioned this Moslem mess of a state.
Not doing so was one of the greatest mistakes of the 19th century.
StellaSaidSo says
Psst! It’s ‘could have’ and ‘should have’, not ‘could of’ and ‘should of’. Otherwise, well said!
mortimer says
Total agreement with Ferd. The Great Powers had Turkey on the ropes in 1920 and missed the opportunity to partition it amongst the regional nationalities as was done in Europe. Instead, they left Turkey as a big bully in the region.
Turkey should not have been allowed to remain in Europe.
The following quote attributed to Kemal Ataturk is still valid.
“For over 500 years, the rules and theories of an old Arab sheikh and the abusive interpretations of generations of grubby, backward priests laid down all the details of civil and criminal law. They shaped the form of the constitution and the smallest deeds or actions in the life of every citizen, his customs, his habits and even his most intimate thoughts. Islam, this absurd theology of an immoral Bedouin, is a corpse that poisons our lives.” – Mustafa Kemal Ataturk
Naildriver says
Well quoted from Ataturk — and coming from a Muslim!
And, most Muslims fully understand if not agree with the observation that ‘ over 500’ years of Islam hasn’t been good for anybody but thugs and greedy priests, and Islam’s dismal entrenchment.
Islam and its minions, a corpse indeed; as the zombies and vampires that proliferate on the television and movie screens. Simply evil.
The European says
Kemal Ataturk was both right and wrong. Yes, Islam poisons our lives, but no, it is not a corpse.
The Ottoman Empire collapsed after WWI, but kemalistic Turkey rose to power, and Islam was allowed to survive. Kemal Ataturk abolished the caliphate, he built a secularist and modern Turkey, introducing the Latin alphabet, Western law and compelling Turks to wear European suits and hats, but did he really de-islamize Turkey? No, he didn’t. He acted like a man who had told Islam: “Lie low, play the dead man until we (the Muslims) are as strong and powerful as Germany, the US, Great Britain, Russia…then you may rise again” He established the big taqiyya-lie, making us believe that Turkey was our friend, our ally, a part of Western civilization. And we trusted Turkey and its leaders. Economically, technically, militarily Turkey has caught up with many Western nations, and Islam showed a low profile for about sixty years. Then, back in the eighties, when Turkey became richer and stronger, Islam re-emerged, too. A strange coincidence, isn’t it? Economic growth and the increase of military power, but no further secularization, no more Western thought and civilization. Re-islamization was on the agenda, Islam, the dormant beast woke up again, its appetite being whetted by all the riches and achievements from Turkey’s short-lived romance with Western civilization. And the Turks? They didn’t fight the beast, they embraced it, they worshipped it again. Fifty or sixty years did not suffice to erase Islam from the hearts and minds of the Turkish Muslims. Quite the reverse happened. Everything that Turkey has learnt from the West is now employed to fight and to subdue the West. We have put the weapons into the hands of our enemies who were clever at pretending to be our friends; in 1920, the opportunity of partitioning Turkey and giving its stolen territories back to the Christians was lost, Turkey is now a formidable foe, and it will be much more difficult to defeat them than it had been back in 1920. There is a German saying: “Forge the iron when it is still hot,,” it has been attributed to Bismarck, but it is much older than the “iron chancellor.” We were bad blacksmiths back then.
gravenimage says
Good analysis.
el cid says
Yes, it is heading the way of Venezuela. The trouble is, what will the migration look like after it fails?
Europe will be overrun. I think this is now inevitable.
It may be why Merkel doesn’t want any more failed economies in the region, e.g. Iran. But, she can’t fix it. Islam is the problem.
Susan B says
Force the release of Pastor Brunson and give this muslim Hitler nothing in return. Turkey, like all failed islamic states, should be responsible for their own failures. Erdogan, like all the Iranian dictators in fact all dictators of any islamic country, can go #$#%^ themselves. Give any of these evil souls one inch and they will take a mile. I apologize for swearing not my usual style.
Funny how education of muslims will help with the downfall of islam. look to Iran where educated muslims are becoming the ground swell for rebellion. Sadly 800 million Muslims out of 1.4 billion are illiterate; that combined with inbreeding and brainwashing is where islam has it support. As muslims become educated that support will start to disappear as will islam.
StellaSaidSo says
+1
Education is a big part of the solution, but given the low average IQ of Muslims, it will be a slow process. Especially if we don’t close the toxic mosques and madrassas, and end the generous breeding subsidies.
gravenimage says
Agreed, Susan and Stella.
Terry Gain says
Erdogan should pray to Allah to lift the Lira. If the Lira does not rise, it is Allah’s will.
Susan B says
+ 1 Funny.
Westman says
Based on observation, it seems that Allah died and left no will….
TWG says
HAHAHA!
Good one, Terry Gain.
Stanton Lore says
It will take a coup or assassination to get Erdogan from office. He wont budge no matter how his people suffer.
Peter Buckley says
Churches coming under increasing attacks. JW readers can help:
https://ofwi.org/action-alerts/2018/8/20/churches-in-turkey
Rev. El Shafie is an Egyptian convert to Christianity……….
gravenimage says
Grimly true, Peter.
eduardo odraude says
Erdogan blames the attempted to coup on others, but were there not many rumors that he engineered it himself, so that he would have an excuse to arrest loads of secularist military officers and replace them with others more sympathetic to his Islamic goals?
Halal bacon says
50 cents worth of high speed lead poisoning?
WPM says
I like the picture you used of him for the article! Where did he get that suit Robert Hall around 1965 era ??
Westman says
He definitely looks like a Carnival Barker:
“Set right up folks! Erdogan’s show of amazing mistakes of nature is about to begin. Only 100,000 lira will give you an unforgettable experience to share with neighbors for years to come! Step up now and get a guided tour of the Palace Of Endless Rooms, the Mother Of All Winchester Houses!
Mark Spahn (West Seneca, NY) says
WPM, Your remark sent me to
https://en.wikipedia.org/wiki/Robert_Hall_Clothes , where I learned that
“Robert Hall Clothes, Inc., popularly known simply as Robert Hall, was an American retailer that flourished circa 1938-1977. Although based in Connecticut, its warehouse-like stores were mostly concentrated in the New York and Los Angeles basins. According to a Time magazine story of 1949, the corporate name was a complete invention; the actual founder and head was a garment merchant by the name of Jacob Schwab, who ‘plucked the name out of the air.'”
What? Robert Hall is not real? What next? Aunt Jemimah is not real?
(By the way, where is the New York basin?)
WPM says
At the rate of the devalue of the Lira the people of turkey will be burning them to keep warm this winter I wonder if it soft and quilted it might make good ass wipe paper.
elee says
Wiping with paper is permitted only when it does not compromise or infringe on the Koranic way of hygiene, you know, what the Prophet did in 632. This was the gist of a published ruling by the Turkish Diyanet (Government Bureau of Religion) in 2015. Oh and Turkish currency is legendarily battered and dirty. The kafir product is infinitely preferable.
Geoffrey Britain says
It’s wishful thinking to imagine that Erdogan will do a 180 and change for the better.
In fact, he’ll double down on his madness… wait and see.
elee says
Succinct and to the point IMHO. My only difference with the author would be regarding the other Islamic places that Turkey governed for a millennium of so. Subsequent Muslim “self-government” might well make Ottoman rule look like the lesser of two evils.
gravenimage says
Maybe, elee–but there was that whole “Armenian Genocide” thing…
elee says
Erdogan/Turkey is using its huge expat population in Europe to wage kulturkampf against the west. Erdogan himself exhorts Turkish expats to destroy the west, refuse to assimilate, &c &c &c, and that’s only the public face of it…….his Diyanet imams send him intelligence on, well, who knows what, and allegations of black ops based in Diyanet offices and Turkish diplomatic offices keep renewing themselves.
Turkish education: the average level of formal education in Turkey is between 5 and 6 years. Needless to say the AK Parti era has been unkind to educators, and he’s channeling as much of his population as possible into religious (“Imam Hatip”) schools. This BTW is in stark contrast to his former buddy Fethullah Gulen, who founded a chain of schools based on the idea that Muslims should learn from science and western culture, and for that matter, talk with Christians and Jews instead of killing them. Winston Churchiil’s words about the toxic effects of Islamic culture and education continue in full force. I’m not sure when it happened, maybe before the first millennium, but suffice it to say the west discovered a long time ago that memorizing texts did not constitute a fruitful way of learning.
Remember that this is the Turkey where the first printing press showed up in either the 18th or the 19th century, 3 or 4 centuries after it got invented a few hundred miles away in 1453. This is a land where for centuries farmers made the rational economic calculation that paying for wheeled cars for hauling stuff was likely a bad decision because some warlord would just commandeer ti and take it away. And why not? Their economic paradigm has been chained to the inalterable scripture that says just go pillage a kafir, Allah will provide. As Hannah Arendt has pointed out, there is great advantage in not having to consider the sustainability of any of one’s decisions or institutions. So it’s pretty understandable why Turkey has yet to experience the past millennium of western development, starting roughly with the inception of the Hanseatic League. Oh and the agents of this change were the academics Erdo has fired by the hundreds of thousands. So hey West—-prepare for a generation or two in which the world’s majority economic model is “go pillage the kafirs, Allah will provide.”
Oh and Erdo & his family aren’t burning dollars on the street, they’ve got lots of them in Malta and the Isle of Man. Islamofascism will continue to be a good business model for the Turkish entrepreneur.
Of course this is just opinion. Those who disagree with me are welcome to go invest in lira.
gravenimage says
All true. And there were protests in the Ottoman Empire from Imams when the first public clock was installed–by Europeans, of course–in Constantinople. It was–of course–held to be un-Islamic.
Rarely says
He certainly comes across like a crazed lunatic but, then again, so did Hitler. This guy could be real dangerous. Hopefully the run-of-the-mill Turks got enough of a taste of a secular Turkey and a better life that he won’t have the necessary support when push comes to shove but I wouldn’t bet on it.
jewdog says
Islam can be a convenient ideology for a narcissist and egomaniac, but those characteristics can be fatal to an economy. They make it far more difficult to adjust policy, since that requires the ability to admit mistakes and correct them. In addition, we live in an interconnected world composed of consumers and producers from many different cultures who need to be soothed, not alarmed by religious supremacist fanatics. Worst of all, Erdogan is irrational, and his hateful and crazy conspiracy theories scare people, redlining Turkey as a kind of Chernobyl for investors. Who wants to give their money over to a country run by a lunatic?
ibrahim itace muhammed says
Fitzgerald, your analysis is far away from reality on the ground in Turkey now . Remember, few month after the failed coup sponsored by treacherous evil United States Turkish economy returned to growth by 5-6% .Evil United States was not happy and started unexpected assault on Turkish economy . Then Turkey withdrew its gold deposits in the evil United States, ditched the Dollar and shifted to other powers in brick bloc. Then evil United States came up with assaults of tariffs, which Turkey retaliated even more harshly by banning many products from evil United States and double tariffs on others. Turkish true friends like China and Qatar have now brought massive investments to Turkey and as a result the Lira picks up and the economy continues with fast growth as it was before the market panic caused by evil United States.
gravenimage says
What a tool.
Sam says
Good analysis Hugh. You should have added that he should retire. In my opinion a psychiatrist is not going to help this man. He seems more than bi-polar, perhaps somewhere in the region of schizophrenia. He lost all contact with reality. Perhaps, this is the reason why he has built that 1150 room thingy. Everyday he has to visit a room to check on his sanity.