Plunging more than 35% in the last year against the U.S. dollar, the Turkish Lira mirrors economic chaos of 64-year-old Turkish President Recip Tayyip Erdogan’s authoritarian regime. Reelected by a landslide June 12 in what looks like a rigged election, Erdogan consolidated power, after surviving a July 15, 2016 coup. Erdogan’s followers are undaunted by the Lira’s plunge, blaming it on U.S. sanctions for holding a U.S. minister in Turkish jail. Following the coup, Erdogan cracked down on all facets of Turkish society, firing civil servants, academics, state bureaucrats, anyone remotely connected with the failed coup. Incarcerating thousands of suspected conspirators, Erdogan left no stone unturned, pursuing any-and-all remotely connected with the failed coup that almost brought down his government. Erdogan accused exiled 77-year-old cleric Fethullah Gulen of fomenting the coup.
Gulen lives in Pennsylvania’s remote Pocono mountains, hardly considered a threat to Erdogan’s government. “This crisis is created by America,” said 23-year-old clothing store clerk Serap. What a 23-year-old store clerk knows about currency fluctuations is anyone’s guess. But Serap mirrors Erdogan’s party-line when it comes blaming America for Turkey’s economic ills or past political problems. Like Ayatollah Ali Khamenei in Iran, blaming America whips the population into a state of paranoia, leaving the government a convenient out when things go awry. “If they have there dollars, we have our people, our God,” said Erdogan, blaming the U.S. for the Lira’s recent slide. Whether the Turkish government or its media friends blame America for the Lira’s plunge, the devaluation has more to do with Erdogan no longer seen as friendly to the U.S. and European Union.
With natural gas and energy prices spiraling out-of-control, currency traders see more problems ahead for the Turkish economy. Terrorist attacks June 16, 2016 at Turkey’s Ataturk International Airport hit the tourism industry hard, leading to Turkey’s economic crisis. “The newspapers didn’t even report the natural gas and electricity prices,” said Veysel, an Istanbul taxi driver. Relations headed South with Turkey over the last years, over the incarceration of Christina minister Andrew Brunson. Turkey, once the 500-year custodian of Jerusalem, vehemently opposes Trump’s recognition of Jerusalem as Israel’s capital. Erdogan also objects to U.S. sanctions against Iran, promising to buy Russian S-400 missile defense systems. Erdogan criticized former President Barack Obama for refusing to extradite Gulen to Turkey for his alleged involvement in the July 16, 2016 coup.
Also driving bad U.S.-Turkish relations were the U.S. support for an independent Kurdistan, something bitterly opposed by Ankara, viewing all Kurds as
Turkey’s enemy. When Trump took office Jan. 20. 2017, Trump immediately took action against the Islamic State of Iraq and Syria [ISIS], the terror group responsible for attacks against the European Union. Erdogan’s son, Bilal, was accused of buying cheap ISIS oil, stolen from Iraq’s Kirkuk oil fields. Aside from shooting down a Russian fighter jet Nov. 24, 2015, Erdogan has moved closer to Russian President Vladimir Putin. Despite part of NATO, Turkey’s more naturally fits with Russia, where an authoritarian regime rules the roost. “The government knows what’s it’s doing—the crisis rumors are creating false panic,” said 30-year-old cigarette merchant Ahmet. Like most Turkish citizens, Ahmet doesn’t believe Erdogan’s to blame.
Controlling all of Turkey’s remaining newspapers, Erdogan spreads government propaganda at will. “The government knows what it’s doing—the crisis rumors are creating false panic,” said Ahmet, buying the government’s press hook, line and sinker. Erdogan’s economic problems stem from continuing his government crackdown, pitting himself against the U.S. and its European allies. Not that long ago, Turkey wanted to join the European Union, something now impossible that he’s crushed dissent and destroyed Turkey’s free press. Erdogan wants the public to blame the U.S. for Turkey’s currency crisis, when, it’s related to the fact that Turkey won’t be joining the EU anytime soon. There’s little Erdogan can do now to stop currency traders from shorting the Lira, knowing that the government no longer looks to partner with the United States and European Union.
Turkey’s currency crisis stems from a loss of confidence in banking circles, discouraging investment in Turkey while the government cracks down on a free press and practically every aspect of Turkish society. “The dollar has gone beyond 5 [Lira], yes. But we didn’t vote for the dollar, we voted for a strong Turkey,” Edrogan told a crowd after his April 12 election victory. Once Erodgan’s crackdown went into overdrive, Turkey’s business-friendly atmosphere vaporized. International businesses could no longer trust that Turkey would meet its obligations under global banking and trading practices. “Look, everyone has cars, there’s busy 24-hour traffic in this city. Does this look like a city in crisis,” said Erdogan, continuing to cover up that he’s made Turkey an unfriendly business place. Unless Erdogan lets go of martial law, currency traders will continue to hammer the Lira.
