Archive for the ‘Erdogan’ Category

Why Turkey’s currency is crashing after Erdogan got reelected – The Associated Press

ANKARA, Turkey (AP) Turkish President Recep Tayyip Erdogan won reelection last month despite a battered economy and a cost-of-living crisis that experts say are exacerbated by his unconventional economic policies.

The longtime leader appointed an internationally respected former banker as finance and treasury minister and on Friday named a former co-CEO of a U.S.-based bank as head of the central bank.

But lingering uncertainty over Erdogans economic direction and an apparent move to loosen government controls of foreign currency exchanges have led Turkeys currency to plunge to record lows against the U.S. dollar this week.

The Turkish lira has now weakened by around 20% against the dollar since the start of the year. It has raised fears of even higher prices for people already struggling to afford basics like housing and food amid high inflation.

I am anxious. I am unhappy. Soon my income wont pay the rent, said Sureyya Usta, a 63-year-old who lives in Ankara.

Heres a look at the falling value of the lira, what lies ahead for the economy and how people have been affected:

ERDOGANS ECONOMIC POLICIES

Turkey has been plagued by a currency crisis and skyrocketing inflation since 2021, which economists say are the result of Erdogans unorthodox belief that raising interest rates will increase inflation.

Conventional economic thinking and the approach being taken by central banks around the world calls for the opposite: rate hikes to control price spikes .

Erdogan has exerted pressure on Turkeys central bank to lower borrowing costs.

The bank has cut its key policy rate from around 19% in 2021 to 8.5% now, even as inflation hit a staggering 85% last year. Inflation eased to 39.5% last month, according to official figures, but an independent group says the true number is more than double that.

In other policy considered to be unorthodox, economists say the government aggressively intervened in the markets to prop up the lira ahead of the elections , depleting Turkeys foreign currency reserves to keep the exchange rate under control.

Pressure over the lira had been high for some time, but excessive interventions by the central bank was preventing the currency from skyrocketing in recent weeks or months, said Ozlem Derici Sengul, an economist at the Istanbul Spinn Consultancy.

A RETURN TO RATIONAL GROUND?

Hours after being sworn in, Erdogan announced that Mehmet Simsek, a former Merrill Lynch banker who had previously served as his finance minister and deputy prime minister, would return to the Cabinet after a five-year break from politics.

Simsek said Turkey had no other option but to return to rational ground. In a sign that Erdogans new administration might pursue more conventional economic policies, Simsek also said there were no shortcuts or quick fixes but vowed to oversee Turkeys finances with transparency, consistency, accountability and predictability.

In another sign, Erdogan on Friday appointed Hafize Gaye Erkan to lead the central bank, taking over from the current chief who has championed rate cuts since 2021. Erkan, a former co-CEO of a U.S.-based bank, becomes Turkeys first woman central bank governor.

Economists say, however, that its not clear to what extent Erdogan, who has ruled the country with a tight grip , will give Erkan and Simsek free rein.

The markets are not convinced yet of Erdogans return to traditional policies, Sengul said. There are uncertainties over whether Erdogan will allow unlimited independence to the central bank and other institutions or have another strategy, she said.

WHY IS TURKEYS CURRENCY FALLING?

The Turkish lira tumbled to record lows against the dollar this week, first falling 7% on Wednesday and then 1.6% on Friday.

Economists say the sharp slide earlier in the week resulted from the government loosening its controls over the currency following Simseks appointment. However, the plunge may have been steeper than what it had anticipated.

The lira weakened by a limited 0.5% on Thursday amid reports that state banks were asked to resume selling foreign currency to prop up the currency. On Friday, the lira depreciated to another all-time low of 23.54 to the dollar.

Loose interventions, combined with some uncertainty, created an excessive depreciation in the lira in one day, Sengul said about the Wednesday drop. The banks are currently intervening in the exchange market, thats why we will not have another 7% depreciation.

HOW ARE PEOPLE AFFECTED?

High inflation is pinching households and businesses with costlier groceries, utility bills and more. A weaker currency means Turkey, which is dependent on imported raw materials, will have to pay more for everything from energy to grain that are priced in dollars.

Usta, the 63-year-old from Ankara, works at a firm that sells cash registry machines to boost her retirement pension but still struggles to pay her living expenses amid high inflation.

She is worried that this weeks sharp decline in the lira will lead to further price increases and even more financial uncertainty for her.

I keep cutting back and cutting back so that I can afford to live, so I can pay for gas and electricity. But how much more can I cut back? Usta said. Ive forgotten about going to the theater and the cinema or going out to meet friends.

Usta says her rent doubled earlier this year, but the owner wants to increase it again. Moving out isnt an option because rents have skyrocketed even in her low-income neighborhood, she says.

Sengul, the economist, says the one-day currency shock is unlikely to have a huge impact. If, however, the depreciation is not contained, she warns, market pricing behavior will dramatically deteriorate.

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Why Turkey's currency is crashing after Erdogan got reelected - The Associated Press

Iranian press review: Analysts warn of impact of Erdogan’s re-election for Iran – Middle East Eye

Erdogan's victory 'threatens Iran's interests'

The progressiveHam Mihandaily, in a series of interviews with analysts and foreign policy experts, raised the alarm over the potential negative consequences forIran of the re-election of Turkish President Recep Tayyip Erdogan.

Under the headline "Erdogan's gruesome dream", the daily examinedTurkey'sattempts to increase its influence in the region as well as its policies in controlling the water resources from the Tigris and Euphrates, two major rivers in the Middle East.

Analysts who talked with the daily argued that Erdogan would continue his regional policies to create a "New Ottoman Empire" and connect the Turkic countries, such as Azerbaijan, by land.

Ali Ziaei, an international transport expert, told the daily that linking Turkey to Azerbaijan through Armenia's southern province of Syunik would be one of Erdogan's main objectives in his new term in office.

"Turkey has been insisting on establishing the Zangezur corridor. This will happen through annexing Armenia's Syunik province to Azerbaijan, which would result in disconnecting Iran from its neighbouring northern countries," Ziaei said.

Ahmad Kazemzadeh, a hydro politics expert, stressed that Erdogan used the dams built in the Southeastern Anatolia Project (GAP) to exert pressure on Iran, Iraq and Syria by cutting off these countries' water shares.

"So far, Turkey has not adhered to international laws about shared water resources and has only focused on its water needs. With Erdogan's victory, hopes of joining the European Union have faded for Turkey so that it will follow hydro politics without considering international laws," Kazemzadeh explained.

A branch of Iran's Islamic Revolutionary Court in the city of Isfahan sentenced a prominent political activist, Heshmatollah Tabarzadi, to 45 years and six months in prison.

Tabarzadi was arrested along with his two sons in the city of Golpayegan a few days after the death of 22-year-old Kurdish woman Mahasa Amini in morality police custody. He was one of the activists who supported the protestors.

Iran: Detainees complain of harassment and humiliation during strip-searches

Amini's death sparked nationwide demonstrations in Iran, during which more than 500 were killed, and about 22,000 protestors and political activists were arrested.

Among the dissidents arrested since last September, Tabarzadi has received one of the longest sentences, and since his arrest, he has been kept in pre-trial detention.

Tabarzadi's daughtersaidthat he was convicted of charges such as "spreading corruption on earth", "propaganda against the establishment", "insulting" Iran's first and current supreme leaders, "collaborating with the enemy governments by interviewing with opposition media", and "encouraging the public to revolt".

The court verdict was appealable, but Tabarzadi said he would not request an appeal because he did not recognise the court.

Since 1994, this former student activist and journalist has been arrested several times. In 2000, he was sentenced to a nine-year prison, and for ten years he was deprived of all social services. In 2010 he received another nine-year sentence and 74 lashes for his activism.

TheUSagreed to release Iran's $23.7bn frozen assets in South Korea,Iraqand the International Monetary Fund (IMF), despite the sanctions on international bank transfers to Iran, the ISNA news agency reported.

On Tuesday,ISNAwrote that during a two-visit to Tehran, Oman's Sultan Haitham bin Tariq Al Said mediated the release of the foreign prisoners in Iran and Tehran's access to its money blocked in other countries.

Some local media suggested an agreement was made after Tehran freed two dual Iranian-Austrian nationals, Masoud Mosaheb and Kamran Ghaderi, and a Danish citizen, Thomas Kjems, on 2 June.

Omani novel on water wins top Arabic fiction prize

According to ISNA, Iran will have access to $7bn in South Korea and $10bn in Iraq. The report added that following a meeting between Mohammad Reza Farzin, Iran's central bank director, and the IMF managing director, Kristalina Georgieva, the international organisation would permit Iran to access $6.7bn in funds.

However, the report did not clarify if the money would be transferred to Iran or if officials in Tehran would only be allowed to import food and essential goods in return for the frozen assets.

On 1 June, Iran's Oil Minister Javad Owjitoldreporters that Iraq only gives food and essential goods for the gas that it imports from Iran.

Despite the US sanctions, Iraq is one of the leading customers of Iran's gas, and in the previous Iranian year, which ended on 21 March, it imported over $3.8bn gas from Iran.

Officials in Tehran have not revealed the exact amount of Iraq's debt due to the gas imports, but some put it at about $17bn.

*Iranian press review is a digest of news reports not independently verified as accurate by Middle East Eye.

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Iranian press review: Analysts warn of impact of Erdogan's re-election for Iran - Middle East Eye

‘We will build Century of Trkiye together’: President Erdogan – Anadolu Agency

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'We will build Century of Trkiye together': President Erdogan - Anadolu Agency

Turkey election: Why the world is watching the presidential race – BBC

20 May 2023

Image source, Getty Images

In Turkey's run-off election, the votes of women - representing 50.6% of the electorate - will be key

When Turkish voters return to the polls in a week's time to pick a president, their choice will make waves across the globe. Turkey's future could look very different depending on who wins - and the world is watching.

Turkey's current president, Recep Tayyip Erdogan, has been in power for two decades. He has forged bonds with both East and West, but his increasingly authoritarian rule has led to friction with some allies.

Kemal Kilicdaroglu, the opposition challenger, has promised to restore Turkey's democracy and improve human rights. Some Turks, though, question whether he has the presence on the world stage and commitment to security that Mr Erdogan has made his trademark.

Polls before the first round of the election on 14 May suggested the vote would be finely balanced between the two men. But when the ballots were counted, Mr Erdogan defied predictions, with a lead that now looks difficult for his opponent to overturn.

"Turkey is a country that I used to describe as one of our swing states," explains Baroness Ashton, the EU's former foreign policy chief.

"What happens in Turkey in terms of its democracy and in terms of its place in the region has a huge impact on Europe, on Asia, and of course on all of the global issues that we're all grappling with. So it is really important."

Since Russia's invasion of Ukraine in 2022, Turkey has cemented its position as a valuable diplomatic broker. It facilitated some early talks between the warring nations, but made a real breakthrough only when it negotiated the crucial grain deal that has kept Ukrainian exports flowing through the heavily-mined Black Sea.

President Erdogan also prides himself on the lines of communication he keeps open with everyone from the UK Prime Minister Rishi Sunak and US President Joe Biden to Presidents Putin of Russia and Xi of China.

Image source, Getty Images

President Erdogan has ties with a range of political leaders, from US President Joe Biden (right) to China's President Xi

"Turkey has always had this ambition to be part of the West," says Evren Balta, a professor in international relations at Istanbul's Ozyegin University.

"This has not changed in the two decades of [Mr Erdogan's AK Party] rule," Prof Balta, continues. "But Turkey's international alliances have diversified. It has pursued what we call 'strategic autonomy', the idea that countries can be in alliances or in alignments with more than one country or security umbrella."

Turkey's multiple relationships and ability to juggle them has proved valuable. But the picture is not entirely rosy.

Take the Nato military alliance for instance, where Turkish forces make up the second-biggest army. Its members readily agreed that bringing in Finland and Sweden would strengthen security for the whole bloc.

Turkey was the lone voice of dissent, slowing down Finnish membership and continuing to block Sweden's. It said it wouldn't support Swedish membership until it extradited dozens of members of the PKK, a Kurdish rebel group that has waged an armed struggle against Turkey since 1984.

Selin Nasi, the London representative of the Ankara Policy Center, thinks a change of president could be helpful for relations with Nato.

Mr Kilicdaroglu has promised to solve the so-called S400 issue - Turkey's use of a Russian missile defence system that the US deemed incompatible with its F-35 fighter jet programme. Turkey's access to F-35s was removed in 2019, but the opposition has promised to take steps to restore it.

Image source, Getty Images

Kemal Kilicdaroglu (centre, with flowers) has pledged to restore democracy in Turkey and restart efforts to join the EU

"Under the current circumstances, Turkey is an ally, but its loyalty and commitment to Nato is questioned," says Nasi. "Remember the G20 summit in Bali. We came to the brink of a nuclear war.

"An emergency meeting was held there and Turkey was not invited. This displayed the ambiguous position of Turkey within Nato. In order to overcome these suspicions and judgments, I think we need to solve the S400 issue, the sooner the better."

And then there is the EU. Turkey was officially recognised as a candidate for membership in 1999. But the process stalled in 2016, with Brussels criticising the Turkish government's record on human rights and democratic freedoms.

Mr Kilicdaroglu and the opposition said they would make a renewed bid to get things moving again. But is that even a feasible aim?

Ilnur Cevik, the chief advisor to President Erdogan, does not think so. He says the opposition leader is "hallucinating".

"The EU are always putting stumbling blocks in our way to becoming a full member. [Mr Kilicdaroglu] says after he comes to power that in three months he would create the environment that the European Union would allow Turks visa-free movement, which is a load of baloney."

Faik Tunay is poetic in his reply to that. He is the deputy chair of the Democrat Party, one of the members of Mr Kilicdaroglu's opposition alliance.

"I would define the relationship between the EU and Turkey as an impossible love story," he says.

"Sure, Turkey has made a lot of mistakes. It didn't complete the homework which was given by the EU: the freedom, the democracy, the human rights or any other issues. But if Turkey can catch EU standards 100% in all aspects, then it's not important to be a member of the EU, or any other thing."

Image source, Getty Images

Mr Erdogan has reshaped his country more than any leader since its modern-day founding father Mustafa Kemal Ataturk

In the original campaign, both sides promised to return as many Syrian refugees home as possible within weeks of the presidential vote. But as the run-off gets closer, that has crystallised into a key topic of discussion, with each man vying to be the most hard-line on the topic.

It's a worrying moment for Syrians, who fear they're about to be returned to a country that still isn't safe for many. That could create a headache for the wider world, too, who would have to accommodate them if Turkey puts a stop to its support.

Turkey's chequered history on rights and freedoms continues to complicate the country's relationship with the West. If the opposition wins, it insists it would make things better, and the pledge to return to democracy has been one of its key campaign messages.

"If under a different government we see any improvement on the democratic rights and freedom of expression, it would improve Turkey's image in the international arena," says the Ankara Policy Center's Selin Nasi. "An Erdogan victory would also mean that political prisoners will remain in jail."

Turkey's voters are facing a stark choice. No doubt domestic issues like the struggling economy are at the forefront of most minds as ballots are being cast. Turkey's place in the world may feel like a less important consideration to some, but the direction its next leader takes will define the future stability and success of the country for decades.

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Turkey election: Why the world is watching the presidential race - BBC

Erdogans media domination and the vote in Turkey – Al Jazeera English

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Published On 20 May 202320 May 2023

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Erdogans media domination and the vote in Turkey - Al Jazeera English