Turkish President Recep Tayyip ErdoÄŸan is a proud man. However, perhaps someone should remind him that pride often comes before a fall, and with the Turkish economy teetering on the brink of collapse, maybe now is the time for a little modesty.
The Turkish economy is in a mess. There’s just no other way to describe it. The currency has been in freefall. Inflation is currently heading for 20%, and likely to get worse due to the tumbling currency. The Turkish Central Bank wants to raise interest rates, but ErdoÄŸan is interfering with the Bank’s independent status and is entirely against the plan. Add to that a mountain of US dollar-denominated debt that is now starting to hurt, as the US raises interest rates. And if all of that wasn’t enough””President Trump has just slapped on a bundle of price tariffs on imported US steel and aluminum. It probably couldn’t get much worse than that.
So what options does the Turkish premier have at his disposal to assuage his country’s woes? He can feel proud that Turkey is an essential big country, with a population of 80 million souls and an economy four times that of its historical adversary Greece. It has a unique geographical location straddling both Europe and Asia, which puts it in a strong bulwark position against the West’s traditional opponent, Russia. But Turkey has chosen to back NATO, of which it has been a trusted member for many years. One of the ways that Turkey could “persuade” the West to come to its financial support is to threaten withdrawal from NATO. This would undoubtedly be seen as a last resort, but mumblings of such action have been heard on both sides of the Atlantic.
A further threat that Turkey might employ is to expel some or all of the three million Syrian refugees to whom Turkey provided sanctuary following the outbreak of the Syrian civil war. Undoubtedly, many of those refugees would rather be in the West than in Turkey, but a move to create a new refugee crisis would set off alarm bells in many European capitals.
One other move that Turkey could employ to show its flexibility is to release the American pastor Andrew Brunson who has been held by the Turkish government since October 2016. Such a move to release the Presbyterian minister would undoubtedly be seen in good light by the White House.
Unfortunately, ErdoÄŸan is not a natural man to second guess. He has taken many actions that may seem to be counterproductive about cooperation with his European and American allies. His most recent plan to persuade Turks to purchase Turkish Lira for US dollars as a means to support his domestic currency was most likely met with derisory laughter by central bankers around the world.
The key to ErdoÄŸan’s extrication from his financial woes lies in the International Monetary Fund, whose resources Turkey will most certainly need to tap. However, to gain access to western financial capital, ErdoÄŸan will have to tone down the rhetoric, realize that there’s no friend like an old friend and return to the embrace of those western nations that will support a modern and progressive Turkey.
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