Turkey Is in the Oven, but What Will It Look Like When It’s Done?

The 2016 coup attempt, in other words coup fail, at the time might have looked like a glorious manifestation of Turkish democratic integrity, but what ensued were far from democratic or anything that could be held as integrity. It was a witch hunt. Political prosecutions went adrift from lawful retribution and righteousness, and turned into a purge of political opposition.

Anyone remotely connected to the failed coup were targeted, including private businesses. Seizing assets is not good for business, especially politically fueled seizures instigated by an authoritarian bent government.

Erdogan called the adjusting of interest rates according to the central bank’s analysis, and not according to him, “the mother and father of all evil”. Citing interest for profit banking as a violation of Islam code of conduct, and going so far as calling the increment of interest rates treason. It is quite obvious that the president of Turkey would prefer the country be managed as an orderly religious nation with him as the incharge proprietor, rather than a multi socio-cultural business driven state.

Countering criticism is one thing, but attacking people or entities that provide this very crucial material for self reflection and improvement is ignorant, and paves a path towards isolation. Fitch Ratings closed its Istanbul offices in January of 2018 after having enough of Erdogan’s verbal assaults, then Fitch continued to bomb Turkey’s monetary credibility.

Journalists, academics, and anyone else for that matter who criticizes Turkey’s numero uno have faced various deterrent measures by authorities, including imprisonment. Back in 2016, Turkish security were filmed attacking anti-Erdogan protesters in Washington DC when Erdogan was visiting the Turkish ambassador at his residence.

 

Another thing other than the rampant prosecution of political opposition and suppression of free speech and freedom of the press that reflects Erdogan’s, and therefore the government’s, inclination for turning Turkey away from a business based economy into an exaltation of faith is their fiscal and monetary policy.

Fair trade within a global free market is necessarily upheld by international monetary rule, you just can’t keep printing money to boost the economy with government spending. Big bridges and skyscrapers like grandiose churches, temples, or mosques do make the skyline look good, well at least to the people commissioning them. But they don’t really advance technology which is today’s economic backbone.

Authoritarian dictators juiced up on narcissistic tendencies seem to love projecting their self image with big structures, big spending, and big water submerging toys. Even if it means big losses for the people.

The future upon us is very technological. Robotics, IoT, quantum materials like graphene, and things like colonizing mars are going to drastically disrupt the way we do things in the near future. These advances will depend on very well educated people, and efficient research and development funding. The idea of returning to something from the past, like the Ottoman empire-esque Erdogan is flaunting, is just plain going backwards.

 

Turkey is now in the Ottoman style oven, thanks to its head chef, and the implications should be served as a warning to emerging markets that have been on the cheap dollar spending binge. Diversify has been the smart investor’s most recent creed, governments should heed it as well.

What’s more prudent, investing in education and research so one day you cold build submarines, or buy a couple of made in China submarines and actually have no use for them? Just saying.

Now, what will Turkey look like when it eventually comes out of the oven? That’s either up to the head chef, or the peoples of Turkey that actually owns the restaurant.

Qatar has offered to chip in as a sign of camaraderie in Muslim world issues, but $15 billion is not going to do much compared to the $240 billion and counting debt. Erdogan will have to either play ball with the west, or get played by the west as another example.

 

Turkey does have a vital geographical vantage that could be the car keys on the geopolitical poker table, especially for Russia. However, its relationship with China could be the game changer.

The micro expression to look for now on Turkey’s poker face is pastor Andrew Brunson. Erdogan would probably rather let the pastor go to ease the pressure than letting “the mother and father of all evil”, aka interest rates, go free.

As for Turkey being a “bird flu” like contagion, the global monetary syndicate probably already has a vaccine waiting. Letting out a disease without a cure isn’t good for business. Allowing chaos to go rampant in the international monetary system will defeat the purpose of making an example out of unorderly regimes with precise economical warheads, aka the “Tariff Tomahawk”. And of course having the global economy go haywire by taking a shot at a downed Turkey will exacerbate American international image even further.

Lastly, to bring the situation closer to home, according to nationaldebtclocks.org, Thailand has about $150 billion of debt while Turkey’s $240 billion debt is backed by a GDP that is about 227% of Thailand’s. With promises of elections being pushed again and again, plus Prayuth Chan-Ocha’s Junta’s sway towards China, Thailand is not that far from Turkey. Actually we are right next to them on the debt clock, and perhaps an option as the next turkey Trump aims at to serve on a platter.