The economic prescriptions of Turkey’s Recep Tayyip Erdogan have come to be known as ‘Erdoganomics’ and despite the financial carnage piling up all around him the single-minded Turkish president isn’t giving up on them yet.
‘Crisis? What crisis?’ was one of Erdogan’s chosen lines at the weekend as—perish the thought it could be otherwise!—he steered wide of any self-criticism and put Turkey on an economic war footing to take on those Western powers and global market players he says are using financial weapons to send Turkey over the edge. That edge seemed all the more in focus in early hours Asia Pacific trading on August 13 as the Turkish lira sank another 9%, taking it to an astonishing 7.24 to the dollar—pushing the euro to a one-year low on fears of contagion—before word of an economic action plan on the way from Turkish officials brought a slight recovery.
At a provincial meeting of his Justice and Development Party (AKP) in the Black Sea coastal town of Rize, the president denied that Turkey is in a currency crisis. The plunge in the Turkish lira against the dollar—which was a frightening 16% on August 10 and in the year to date amounts to more than 40%—was essentially written off as fluctuations by Erdogan which have nothing to do with economic fundamentals.
“I am asking you,” said Erdogan. “What possible reason could there be behind the lira which was at 2.8 against the dollar on July 15, 2016 to slide below 6 yesterday? During this period, Turkey has set records in its exports, production and employment.”
Turkey, of course, has not set records during that period in fighting inflation or tackling its current account deficit (the shortfall, indicating that Turkey is spending one heck of a lot more than it is earning, is one of the worst in the world) but those matters are for another speech, another time.
Erdogan went on to say that those who plotted against Turkey in the failed coup attempt in July 2016 were now trying to target the country through its economy.
“Those who can’t compete with us on the ground have brought online fictional currency plots that have nothing to with the realities of our country, production and real economy… The country is neither crumbling, nor being destroyed or bankrupt or in a crisis,” he said. The way out of the “currency plot” was to drive up production and “minimise interest rates”, he added, to howls of anguish heard somewhere deep within the overheated inner sanctum of the Turkish central bank.
Of course, those not convinced by Erdogan’s weekend A-Z of Turkey’s economic realities could always look up reports of the “new economic model” unveiled by Erdogan’s son-in-law and finance minister Berat Albayrak on August 10. Yet very few reports of any length emerged. The audience was reportedly left so underwhelmed by Albayrak’s paucity of measures that would mean ‘getting real’ and wishy-washy promises of monetary and fiscal discipline that the event struggled to make any serious headlines.