You don’t mess with Erdoğan

If this past week taught us anything, it is that you don’t mess with Erdoğan – if you didn’t know that already. Because if you do, he will mess with you back – big time.

The New York Times’ Ceylan Yeğinsu found out the hard way. After President Recep Tayyip Erdoğan criticized the former Hürriyet Daily News reporter’s story on the Islamic State of Iraq and the Levant’s (ISIL) recruitment efforts in Ankara, pro-government media targeted her, publishing her picture on their front page.

Yeğinsu is not the first witch-hunted journalist from the international media. For example, after writing that critics of Turkey’s monetary policies were increasingly being portrayed as enemies, Bloomberg’s Benjamin Harvey was “exposed” as one in daily Sabah back in 2011. More recently, Erdoğan referred to Amberin Zaman, the Economist’s Turkey correspondent, as a “shameless militant disguised under the guise of a journalist.”

She won’t be the last, either. And Yeğinsu was not messing with Erdoğan, merely reporting just like Harvey and Zaman. If you would like to know why, you can refer you to my March 7 column, “The rotten state of the Turkish media.” But I am more worried about Erdoğan messing with the market economy, i.e., British (sorry, Scottish) economist Adam Smith’s invisible hand.

Just this past week, Erdoğan threatened to “cut Turkey’s ties” with credit rating agencies (CRAs) Moody’s and Fitch, who have been critical of the Turkish economy of late. After calling in the banking watchdog to intervene in Bank Asya, He declared the Gülenist bank bankrupt. Speaking at the Turkish Industry and Business Association’s (TÜSİAD) High Consultation Council meeting, he slammed Akbank Chairwoman Suzan Sabancı Dinçer’s call for reform.

Unfortunately, Erdoğan’s messing with the private sector is more than words: A prominent pro-government columnist hinted that, after subsuming the Foreign Economic Relations Board (DEİK) under the Economy Ministry, the government was planning a similar move on DEİK’s former parent the Union of Chambers and Commodity Exchanges of Turkey (TOBB) as well.

These developments confirm the worries relayed to me during my most recent London trip: That Turkey is turning into a land where discretion rules supreme over the rule of law. That success or failure depends on what Erdoğan thinks of your company makes it sort of like Vladimir Putin’s Russia. No wonder investors are getting cold feet on Turkey.

Similarly, if policymakers do not cooperate with the CRAs, they will not be able to tell their side of the story. Turkey will end up with lower ratings and higher interest rates, the one thing Erdoğan despises most, as a result. And while Bank Asya is an isolated incident, and other Turkish banks remain robust, history is awash with crises spreading from a single bank.

Yes, you don’t mess with Erdoğan. If you do, He will mess with you back – big time. But you don’t mess with the invisible hand, either. If you do, you’ll end up being slapped by it, even if you are Erdoğan. After all, the invisible hand is not as defenseless as a journalist.