Turkey Takes a Tumble

[Valin]

Via Meadia:

Mar. 5 2015

 

With the Turkish lira at a record low against the dollar and growth stalling, President Erdogan is employing some unusual measures to keep Turkey’s fragile economy afloat. * The Financial Times reports:

 

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The abrupt fall in Turkey’s growth and the balance-sheet shock to many companies that have liabilities in foreign countries could be much more serious for Erdogan’s power base than might appear at first glance. Erdogan has come to power with the backing of a group of Anatolian entrepreneurs and industrialists who are more pious and socially conservative than the traditionally West-looking business elites based in Istanbul. This group, with huge interests in construction, roared into new prosperity and power in Turkey during the emerging market boom. Much of the government’s “look east” or “neo-Ottoman” foreign policy reflected the hunger of these groups for construction contracts and other business in Syria, Jordan, Egypt, Iraq, and other parts of the old Ottoman zone.

 

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The AK Party is facing a difficult election in June, but that may not be the worst of its problems. The Turkish political opposition is deeply divided and not noted for competence, so unless the economy falls apart much faster than now appears likely, the AK Party is likely to hold onto power. And since Erdogan is now President, come what may he won’t be turned out of his ridiculous palace anytime soon.

 

The AK’s real problem is longer term: the Anatolian bourgeoisie, as some have called the new Turkish business groups rising out of the heartland, may have gotten significantly ahead of itself, and the coming downturn could put a severe stress on the party, on its business supporters, and on Turkish society as a whole.

 

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* Behind Paywall