Can Dündar and MEP Costas Mavrides

Opinion: Will Erdogan’s bubble blow up in 2017?

written by Costas Mavrides MEP   (S&D &DIKO), Economist.

For a decade, the economy had been the big political advantage of the Turkish PM and now President Erdogan and ruler of Turkey. Years ago, in his initial political outreach, Erdogan took care that millions of low income Turks and Kurds would benefit from his policies. In reciprocity, they provided him with political towards “limiting the power of the Army Generals”.

The expectation was that once the situation got better, the peoples of Turkey, including the Kurds, would benefit from liberal policies regarding human and political rights. What followed is widely known. He not only “limited the power of the Army Generals”, but after putting them in jail, he took care of disappearance, persecution and stigmatization of military and police officers, judges, journalists, professors, school teachers, public employees as well as thousands of his opponents and turned with all his might against the Kurds.

The interventions of the Turkish military as well as paramilitary units via operations of mass crimes in Southeastern Turkey, mostly inhabited by Kurds, became part and parcel of Turkish government policy. Finally, a few months ago, we witnessed the jailing of elected parliamentary deputies, mayors, as well as the two co-presidents of the Peoples’ Democratic Party (HDP). In line with the above policy, the ruthless Erdogan regime refuses the necessary medical treatment to Selahedin Demirtas, the charismatic co-president of HDP, just as it refuses to European Parliament Members the right to visit the jailed political leader. This same regime hardly hides its joy at every terrorist attack with scores of dead people and finds ways to “exploit” them; the latest example being that of a top Erdogan aide who declared right after the latest terrorist toll of tens of dead people, that the proper reply to the attack would be the passing by the Turkish Parliament of the changes in the Turkish constitution so that President Erdogan would officially become a neo-Sultan with absolute authority in a Neo-Ottoman regime.

In Neo-Ottoman Turkey economic indices are adjusted to the wishes of the Neo-Sultan. During December 2016, there was a severe distortion of the most important economic index, a fact that reveals indirectly the sudden reversion in the Turkish economy. Specifically, a year ago, Turkish authorities were claiming a 7% growth at the beginning of 2016 and were forecasting a 4 % growth in the economy for the whole 2016 (as an average). Since then, however, a number of important things happened that negatively affected the economy: terrorist attacks, military operations, a significant reduction in the number of tourists visiting the country, the military coup attempt, the firing of over 100.000 employees from the public and private sectors, conversion of the Southeastern Kurdish Provinces into war zones, a flight of capital and lack of investment, increases in the interest rates that private enterprises and corporations cannot bear, a falling Turkish lira increasing the country’s debt… .

TRY USD graph

In mid-2016, after supposedly the economy had grown around 4 % for the first half of the year, the yearly estimated growth for the whole year was reduced to 3%. Obviously, in the second half of 2016 the economy would cool down to a degree that would “obliterate” the growth shown in the first half of the year, with a consequent zero growth lever at the end of 2016, and more importantly, with the forecasting of a negative economic performance in 2017. Rational as it seems, in December of 2016, economic growth registered a 7 % “boost” (!), with an asterisk note indicating that the methodology of calculation of this important index had changed! But still, without any adjustment in the previous historical figures so that comparisons could be made, and with no explanations for the new methodology at all.

Turkey GDP growth rate

In Neo-Ottoman economics, the Neo-Sultan decides the level of economic indices, and not the markets. Incidentally, this fixing of the figures means an extra €142 billion in GDP, something however that does not please those prudent in academic and the business communities within Turkey, who see the country’s economy heading directly towards wreckage. In market economics, directives from higher ups to tamper with economic indices are considered as desperation measures in the face of dead ends. One such measure was Erdogan’s proposal to Russia for payment of the cost of imported Russian natural gas by bartering Turkish products (which was rejected). Obviously, the foreign currency reserves will continue to be depleted with the Turkish lira losing more ground as quality people and capital rush out of the country.

Erdogan’s mop-up operations to rid the country of “undesirables” after the military coup attempt have not been restricted to the civil service, the security forces, the mass media, the universities, primary and secondary schools and other such public services, but include over 500 large private corporations and legal firms, whose governing boards have been summarily fired.

In Turkey, there is not merely political instability, but a continuing crisis with problems that loom larger by the day while several political issues and conflicts remain open. In Syria, the Erdogan regime turned from a strong supporter of ISIS into enemy, in a effort to avert what has been created de-facto, i.e. an autonomous region within Syria all along most of the Turkey-Syria border, under Kurdish administration and with the blessings of the USA contrary to Turkish wishes. The close relationship between Syria’s and Turkey’s Kurds, and what will follow there is something easily predictable. Whether any of the above is taken into consideration by the Government in the Republic of Cyprus regarding the timing of reaching a solution now, is something that anyone can evaluate.

Can Dündar and MEP Costas Mavrides
Featured Image: Can Dündar, Turkish Journalist in exile, with MEP Costas Mavrides
  • Costas Mavrides, MEP (S&D) –
*Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the  position of Eyes on Europe & the Middle East.