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The crisis in Turkey

By Keith Suter - posted Wednesday, 29 August 2018

Turkey is in a financial crisis which has international implications. The immediate issues are the trade war between the US and Turkey, and the US's pressure on Turkey to release Presbyterian Pastor Andrew Brunson (arrested in 2016).

But there are deeper issues involved. The crisis cannot be blamed on Trump; he has made a bad situation worse.

Meanwhile, the Turkish leader Recep Tayyip Erdogan is using the crisis as proof of the US's hostility towards Turkey, and so he is playing the populist card of ethnic nationalism. This is Turkey against the world (and so ironically Trump is aiding Erdogan's domestic standing).


The crisis has several roots. Erdogan, one of Turkey's most significant leaders in decades, has sought to develop the country rapidly to provide some wealth to his down-trodden supporters. After the 2001 terrorist attacks on the US "9/11", he enjoyed good support from President George Bush as a "moderate" Islamic leader and exploited his status to attract foreign capital.

But the influx of capital was used to fuel consumerism rather than retool the economy. Turkey is one of the "Fragile Five"; the others being Indonesia, India, Brazil and South Africa (all heavily dependent on foreign investment). There is a fear that foreign investors will panic and an exodus of money will trigger an economic collapse in Turkey which could spread to the other four countries.

There is now rampant inflation but Erdogan has been reluctant to raise interest rates to dampen the inflation. He has ditched his economic team; his son-in-law Berat Albayrak is now the finance minister.

Foreign investors are worried about how Erdogan can stop the economic rot and whether there will be contagion. Investors fear a new "Greece crisis" – but Turkey is a much larger economy and so will have an even bigger impact on the international banking system if the problems continue.

Meanwhile Erdogan is embroiled in many foreign problems. Syria is on its border. Turkey has had a clear policy: prevent the Kurds from gaining control over the Kurdish part of Syria (which could then threaten Turkey's hold over its own Kurds). Now that Assad is winning the civil war, Erdogan wants to make sure that Turkey remains a player in Syria's future.

Unfortunately, the US has had no clear policy for dealing with the "Arab Spring"- inspired Syrian civil war. The US (beginning with Obama) has supported some groups which are anti-Iran and anti-Assad (and probably pro-Islamic State and Al Qaeda). The US has long got on well with Kurds; this goes back to at least George Bush senior in 1991 and the first Gulf War. Syria has therefore long been a point of difference between the US and Turkey.


By contrast, Putin sees an opportunity to improve relations with Turkey (a long-standing major NATO member). He is supplying military equipment to Turkey (thereby reducing Turkey's reliance on the US).

There is also US-Turkish tension over Iran. Trump has ended the Iranian nuclear deal (one of Obama's great foreign policy achievements) and has reimposed sanctions on Iran. Turkey is ignoring the sanctions and still importing Iranian oil.

Saudi Crown Prince Mohammed bin Salman has spoken of the "triangle of evil": Turkey, Iran and Islamist militants.

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About the Author

Dr Keith Suter is a futurist, thought leader and media personality in the areas of social policy and foreign affairs. He is a prolific and well-respected writer and social commentator appearing on radio and television most weeks.

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