Economists to shut up – or get locked up
I had just sat down to write my predictions on the Turkish economy and markets Friday afternoon when I realized I could go to jail for that.
Bloomberg reported Jan. 4 that Société Générale, a French bank, had “ordered employees to cease commentary on Turkey pending a review of new legislation that threatens up to five years imprisonment for certain types of commentary on financial markets.”
The bank was reacting to a clause of the new Capital Markets Law, which took effect Dec. 31, under the article Markets Fraud: “Those who give untruthful, wrong or misleading information, start rumors, provide news, make comments or prepare reports with the intention of influencing prices and values of capital markets instruments or investors’ decisions are punished with a prison sentence of two to five years and a pecuniary punishment of up to 5,000 days.”
According to Bloomberg, Bank of America Merrill Lynch does not see any merit in getting lynched, as it is reviewing, like its German counterpart Commerzbank AG, “how the new law will affect their business in Turkey.” Legendary fund manager Mark Mobius declined Turkish daily Habertürk’s interview request, noting that he “can’t make any comment regarding the Turkish market in view of Turkish regulations.”
This is not the first time analysts have come under fire. There was a witch hunt in November 2011, when pro-government daily Sabah began labeling economists critical of monetary policy as members of the “interest-rate lobby,” a fictional alliance led by Jewish financiers trying to suck Turkey dry, like a giant vampire squid, by raising interest rates. Even a Bloomberg reporter, who happens to be the author of the Jan. 4 article, was attacked for merely reporting on the situation.
At the time, an Istanbul economist quoted by the Wall Street Journal noted that she was afraid to voice her opinion and censoring herself. "When I criticize the central bank, it might be published in Sabah and then I can't get an appointment in Ankara and can't do my job effectively." As a result, she could lose her job.
I know the feeling. When I was working as a market economist at Citi, Prime Minister Recep Tayyip Erdoğan told executives from the bank’s headquarters, who were visiting him soon after his 2007 elections victory, that I should be fired. In a note before the elections, I had predicted a coalition government. According to Erdoğan, this was solid proof that I was not good at my job. Luckily, Citi executives did not know the PM well and took his remarks as a joke.
But losing one’s job is really peanuts compared to losing one’s freedom, especially when considering the long detention periods in Turkey: It is widely reported that there are more people awaiting a verdict in the country’s prisons than those who have been convicted and serving their sentences.
As for my 2013 outlook, I will have it for my next column on Jan. 11. But I have to pack my prison suitcase first and make sure I have enough e-books on my Kindle.