Turkey’s\u00a0ruling Justice and Development Party\u2019s (AKP) policies are becoming a perfect example of how not to govern a country and manage a risky emerging economy.<\/p>\n
Ever since the aftermath of the failed military coup in mid-July, the government\u2019s overall policy has been driven by two major concerns: dealing with internal and external security threats and changing Turkey\u2019s parliamentary system to an executive presidency.<\/p>\n
With these two overarching goals, the government, led by the President, is removing every potential obstacle that stands in the way, without giving much thought to wider implications.<\/p>\n
During the last few months, tens of thousands of people were arrested, more than 120,000 public workers were suspended and almost all major institutions were shaken to their cores. The effect of those sweeping security measures on society were instantaneous.<\/p>\n
The economic impact took a little longer to be felt; but when it came, it manifested itself as serious currency turbulence,\u00a0foretelling\u00a0a much more damaging economic crisis to come.<\/p>\n
This week has seen a meltdown in the Turkish currency, with the lira plunging to record lows against the American dollar, at 3.55, becoming the biggest loser among the\u00a0currencies\u00a0of other emerging economies.<\/p>\n
President Erdogan responded by calling citizens to swap their dollars \u201chidden under their mattresses\u201d for gold or Turkish lira. He also urged the Central Bank to cut interest rates to encourage growth.<\/p>\n
The immediate effect was further sharp fall in the currency.<\/p>\n
Other big names responsible for the economy kept a low profile but the President\u2019s call was heeded first by the Istanbul Stock Exchange, then the Saving Deposit Insurance Fund (TMSF). Borsa Istanbul has converted all its cash assets into lira and TMSF said it, too, would deal only in Turkish lira.<\/p>\n
Local administrations and small businesses rallied around.<\/p>\n
The municipality in the industrial city of Kayseri offered to give spicy sausages worth 40 US dollars to everyone that can prove that they exchanged at least 2000 US dollars.<\/p>\n
Others promised free haircuts and beard trims to people who got rid of their stashed American currency in response to the President\u2019s call.<\/p>\n
Turkey\u2019s government claims the turbulence is a temporary fluctuation in the economy and it is taking measures to ride out the storm.<\/p>\n
The opposition disagrees.<\/p>\n
Selin Sayek Boke, spokeswoman for the main opposition Republican People\u2019s Party (CHP) says that Turkey’s biggest economic risk is from the political risk created by the AKP, and that the government is dragging the country to a crisis.<\/p>\n
Leading economists warn against political meddling in economic affairs and weakening of economic institutions.<\/p>\n
Backsliding on rule-of-law, transparency and government accountability, alongside domestic tensions and geopolitical problems, increase the economy\u2019s fragility.<\/p>\n
Whipping up anti-American, anti-European sentiments and rallying support for the national currency may give the government some breathing space politically, but in an international economic environment, increasingly less tolerant of high risks and structural imbalances, the relief can only be temporary.<\/p>\n","protected":false},"excerpt":{"rendered":"
Turkey’s\u00a0ruling Justice and Development Party\u2019s (AKP) policies are becoming a perfect example of how not to govern a country and manage a risky emerging economy. Ever since the aftermath of the failed military coup in mid-July, the government\u2019s overall policy has been driven by two major concerns: dealing with internal and external security threats and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[4],"_links":{"self":[{"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/posts\/28832"}],"collection":[{"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/comments?post=28832"}],"version-history":[{"count":1,"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/posts\/28832\/revisions"}],"predecessor-version":[{"id":28833,"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/posts\/28832\/revisions\/28833"}],"wp:attachment":[{"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/media?parent=28832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/categories?post=28832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.firdevstalkturkey.com\/wp-json\/wp\/v2\/tags?post=28832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}