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Turkey's Problem Isn't Trump, It's Erdogan's Gunboat Economics

14 22 0
16.10.2019

Trump’s threat to decimate the Turkish economy doesn’t really add up to much. His tweets are bloodcurdling but the follow-up in terms of sanctions and the like have been anemic.

Yet decimation may result because he has a ready and willing partner in Recep Tayyip Erdogan.

Turkey was sort of emerging from recession when Erdogan ordered an invasion of Kurdish Syria last week, so it is hardly in a position to cope with the uncertainty that war and the growing chill between Turkey and its Western partners will cause. Already Volkswagen has decided to put off plans to build a $1.4 billion plant in the country. But Turkey's biggest problem of all is Erdogan himself.

The Turkish leader briefly flirted with thoughtful economic policy in the early 2000s after the International Monetary Fund demanded controls on government spending, transparency, central bank independence and more open and better-regulated markets. But as the economy prospered and Erdogan cemented his authority, the rules of the game changed for the worse.

Cronyism and debt-fueled growth, especially in his favorite sector, construction, have become unofficial economic policy. These days central bank does what it is told, and the treasury has been placed in the hands of his son in law. Turkey’s economic policy is guided by Erdogan’s personal and political needs.

Erdogan is even willing to call out the troops in the name of economic development. Instead of........

© Haaretz