An economic war…

An economic war…

It is obvious that there is an economic and financial war declared on Turkey. For Turkey, the aim of the war declared on her is clear: To punish her, make her get to her knees, and compel her to become an “obedient” or “subservient” state.

Turkey’s sole powerful man appears fully convinced that his American counterpart President Donald Trump has decided to sacrifice Turkey, an ally for 60 years and a strategic partner, for a pastor alleged to have been engaged in espionage as well as activities supportive of the aims of terrorists without being a member of a terrorist group.

The situation is serious. If we look at the value of the Turkish Lira against the greenback, once upon a time the rate was one lira to $1. That was the time when Turkey slashed six zeroes from its currency in hopes of making a fresh start and achieving monetary stability. It did not help. How could it if austerity and tight monetary policies only apply to the people, but when it comes to show off the magnificence of the state or ruling people, the mentality was “There can be no austerity in demonstrating Turkey’s splendor”? There are claims now that because of insufficient funding the construction of a summer palace and an extension to the presidential complex have stopped. I doubt it.

I am ashamed to say this, but apparently Turkey will have to slash some zeroes again as the dollar is heading to incredible levels. Since the country moved to the presidential governance, the exchange rate has been skyrocketing, demonstrating the high vulnerability of a country that collected all powers in one hand.

It was particularly evident Aug. 10 when the president’s son-in-law, the treasury and finance minister, was unveiling a new set of promises and wishful targets packaged as an economic and financial program. Businesspeople gathered in a hall were all smiles, but at the same moments there was a financial landslide and the Turkish currency lost almost half of its value against all foreign currencies within hours.

Turkey faces an economic-financial war. Who is waging the war against Turkey? The president, his army of ministers, and advisers all point at the United States. The president has been vowing to take retaliatory action.

We shall see all together. The problem is that it will not be as easy as retaliating sanctions on two Turkish ministers by imposing fictional sanctions on two key members of the Trump cabinet. Turkey does not have the resources and the capacity to devalue the dollar. But can it stop trading with the dollar as the Turkish president and his people often talk about? Can they really achieve that and trade with China, Iran and Europe with “national currencies” or reinvent the barter system? Whatever counter measures Turkey may take, its losses will heavily surpass those of the U.S.

Turkey should sit back and make a careful assessment on where it made mistakes rather than talk about foreign plots and attack everyone as the country’s potential enemy. Was it appropriate for Turkey to undermine its NATO membership and seek new allies? Was it conceivable with reason and the principle of independence of judiciary to release people facing charges under political pressure of some allies – which are obviously politically designed anyhow? If such release could be done for one, two or five, why should Trump not expect a similar treatment for the American pastor?

No one can say the Americans were not at fault at all in this crisis but it appears as if Turkey paid cash to have this crisis with incredible diplomatic and political failures.

Yusuf Kanlı, Turkish economy, dollar/lira,