Turkish President Erdogan has no one to blame but himself
US President Donald Trump has done everything in his power to help fuel the narrative his Turkish counterpart, Recep Tayyip Erdogan, wants to portray, stoking the fires of the country’s currency crisis through sanctions and, of course, tweets.
Erdogan has cast himself as a man of the people fighting against external forces, and now the most powerful politician in the world has delivered himself as the perfect bogeyman.
The row, sparked by the detention of an American pastor, has provided convenient cover for Erdogan, but make no mistake, this is a crisis of his own making.
The populist Erdogan personifies his country’s slide backwards. Freedom House, a US think tank, recorded a marked uptick in the nation’s attitude to civil liberties and political rights after the former mayor of cosmopolitan Istanbul pushed through an ambitious reform programme in a bid to join the EU.
Yet after winning another term as Prime Minister in 2011 and then becoming President in 2014, Erdogan has steadily eroded the rights he earlier championed, creating a presidency with all the hallmarks of an authoritarian regime.
Since the attempted coup of 2016, he has purged thousands of civil servants, soldiers and even teachers from their jobs.
Now, his iron grip has extended to the economy. Erdogan has seized control of the finance ministry – run by his son-in-law – and the central bank, whose members answer to him. The President has staked his fortunes on a Turkish economic boom, after GDP growth of well over seven per cent during 2017.
In this context, few are betting on the central bank to tighten monetary policy much beyond the half-hearted liquidity measures it has so far introduced. To do so would be to defy the man who this year described interest rates as the “mother of all evil”.
Turkey now faces the consequences of overheating. The spiralling currency crisis will push inflation much higher than the current 16 per cent annual rate – not to mention adding to the debt burden for Turkish firms which have loaded up on dollar borrowing.
The interest rate hikes needed to stop the rot will harm growth if they do come. Fiscal tightening in the form of big spending cuts will also be necessary, particularly if external creditors step in. Whether Erdogan can escape the reckoning for his mismanagement remains to be seen.
Either way, it is the people of Turkey who will bear the costs of his systematic dismantling of the institutions which gave observers so much hope at the start of his reign.