From the farmers of central Turkey to the merchants in the city the ravages of Turkey’s economic management are now biting. High inflation (15%), a plunging currency (down since 2009 from 80 US cents to now just 22, the Turkish lira is fast becoming a joke), the legacy of recently re-elected Supreme leader Tayyip Erdogan is unfolding. His government has borrowed like a banshee and that’s funded an economic boom (GDP growth is 7%) that he’s had command of. Massive infrastructure including a yet-to-be-completed 6 runway, $12bn airport in Istanbul, plus eye-watering dual carriageway roads with little traffic that we’ve been riding along, plus whole new towns being built with government-intermediated foreign debt.
Add to this the Erdogan journey toward totalitarianism (18,000 more people purged just last week from their positions) and Islamic fundamentalism and there’s every reason for the financiers to further abandon Turkey. That however is likely to steer it more deeply into the arms of Putin’s Russia. So the West (America still has air bases here) is in a quandary, do they keep financing this NATO ally, that is clearly at the forefront of championing the illiberal form of democracy now so popular in Poland, Hungary and dare I say it – the US?
Of course it will, the adjustment to the madness that is inevitable will have to come from the farmers and the town businesses that are going bust under these economic conditions. Until there are more of them than there are contractors and their employees who are constructing Erdogan’s new Turkey, the support for him will remain adequate. I suspect by the time that balance changes, elections in Turkey will be meaningless and the West will have another Iran-type regime on its hands.
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