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Recep Tayyip Erdogan has held power in Turkey for almost 20 years, first as prime minister, then as President. With inflation soaring and his currency collapsing, Erdogans eccentric ideas about economic policy seem to have made a bad situation worse but what if we saw things from his perspective? We steal a memo on Erdonomics from deep inside the Turkish Presidential Palace.

From: the Desk of His Excellency, Recep Tayyip Erdogan, President of Turkey

My Dear Turks,

I write this with a heavy heart, but a very fine pen.

We have seen large scale public borrowing, a currency crash, runaway inflation, and resignations from the Central Bank because its leaders wanted to lower interest rates.

No, my friends, I am not talking about the past few months, a scene painted by biased Western media, which even doubts that I got a college degree (of course I did, though nobody seems to believe me, but I digress).

Rather, I am referring to the dark days of 1994, when you voted for me as mayor of Istanbul.

The financial crisis which we were experiencing then had crippled us. I drew you out of that mess by throwing everything I could at beautifying Istanbul. I brought you green buses, I built you recycling plants. I even gave you my email address in order to let you have a direct role in governance. Surely, my experiment changed Istanbul, the City of Centuries. Thus, I decided to rule for centuries.

But not without challenges. When you voted me in as prime minister in a 2002 landslide, we were crippled by another financial crisis, thanks to the ineptitude of those I had replaced: the lira was totally out of control, confidence in the economy was so low that almost two-thirds of bank accounts were held in foreign currencies, and allegations of corruption against the former leadership had weakened our great nation. Of course, no such aspersions whether about corruption, mismanagement or desperate dollarization can be cast against my current government. I repeat, none!

Lets travel back to those early days. When I took over, things changed immediately. We bounced back, like the great Ottomans did after their mediocre European campaigns (unfortunately, our own recent European campaigns have been thwarted by continental arrogance and conspiracy). But back to that golden era during my first term: under my watch GDP almost tripled in just four years, foreign direct investment boomed, and unemployment and inflation dropped to record lows.

My dear friends, you didnt appreciate what a good thing you had going for you.

You were thankless. You protested against progress. So, I pushed back. And when your Western backers didnt take a hint, and attempted an extra-constitutional coup, I fought back with a constitutional one that made things right, and put me properly in charge.

Now, you and your friends are at it again, doubting my plans for our economic revival.

My dear Turks, as I said at parliament recently, both the Quran and I can assure you: with lower interest rates come fewer worries and more borrowing and spending! If we shed the evil of usury, you will be self-sufficient and produce more exports. Growth will follow, Inshallah!

I want to put your money where my mouth is: in my personal resolve to cut interest rates, I have even kept every scissor I have ever used on display. After all, my economics are built on family and friends, on liberating our workers, and fighting a war of economic independence.

Trust me, brothers and sisters. My plan, based on theories by economists old and new, now depends on you. I will guarantee a return on your deposits, but only if your deposits are in liras. Things are already in motion for your benefit: price hikes have been offset by an increase in your wages. Foreigners are returning, the lira is already bouncing back, even though I had to sell billions of dollars to intervene.

And whats a little lira weakness if it helps us to export to the world the wonderful things we make, eh? Wouldnt our African brothers, also victims of Western predators, be safer with more of our armed drones? Remember, my friends: we are in the midst of the Learned Helplessness Syndrome. The independence of the Central Bank is overrated, and not necessary for those who love their country! Orthodoxy is slavery! We will break these shackles! Cok yaa Trkiye!

And do not forget, there is such a thing as Turkish exceptionalism. It was Turks who invented the COVID vaccine (even though they were in Germany). It is the Turks who are doing the most to stop Russia from invading Ukraine. It is the Turks who will help stabilize our brothers in Africa. Even Elon Musk not a Turk but still a nice man who considered it an honor to meet me has promised to enhance our search for the stars, by putting our satellite into space.

We are a great nation, my friends. Weve seen these bread lines before. But these Western reports about hunger and desperation are getting old. I am convinced that, after I stop a run on the banks, when all of this is over, we will be a breakout star. I urge you: dont believe the naysayers. Borrow freely, spend abundantly, enjoy life and dont forget to vote in 2023!

Excerpt from:
In Erdogans shoes: What is he thinking? - GZERO Media

There has been no idea any any agreement on a meeting with Turkeys President Regep Tayyip Erdogan, Prime Minister Nikol Pashinyan said at an online press conference today.

He added, however, that if the discussions between the special representative go ahead successfully and the process matures to that point, meetings on high and highest level will naturally follow.

It will definitely take place if the process goes successfully, the Prime Minister said.

He added, however, that the date of the meeting of the special representatives is yet to been agreed. The Prime Minister said it will be a definitely be a lengthy process, not one, two or three meetings, and added that there should not be exaggerated expectations.

As for the recognition of the Armenian Genocide, PM Pashinyan said it has never been a precondition for normalization of relations with Turkey.

The Armenian side, all authorities without exception have said that they are ready to normalize relations with Turkey without preconditions, which means that the recognition of the Armenian Genocide has not been a precondition for normalization of diplomatic relations and opening of borders, the Prime Minister said.

He added, however, that the stance on the international recognition of the Armenian Genocide is enshrined in the Governments program.

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No agreement on meeting with Erdogan, Armenian PM says Public Radio of Armenia - Public Radio of Armenia

Command? Dear Mr President, surely as one who aspires to be a Muslim hero you have read the Quran. Therein stands the clear injunction: Allah has permitted trade and has forbidden interest/usury (2:275). Forbidden here does not mean negotiating what is low or middle or high forbidden means zero, exactly zero. Haram is haram. This is why all early Muslim scholars rejected interest. Many scholars still do today, particularly Arabs and Pakistanis. In 2014, the top ulema of Pakistan belonging to the Fiqhi Majlis said that even the so-called Sharia-compliant Islamic banking merely renames interest as profit and, as such, is deception. All banking, they concluded, is haram. Historically, banking was absent in Muslim countries until the 18th century because nothing except zero interest can be allowed. The Ottoman rulers of Turkey were, however, not ideologues. As pragmatists who ran an empire, they broke the ban on banking because they well knew that no banking meant no trading. This Western innovation had to be adopted come what may. But, to be safe, they first looked around for muftis who could justify European banking and found some. One can endlessly debate whether these justifications are genuine or manufactured.

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Erdogan and Imran are letting emotions run far ahead of reason - Times of India

Turkish President Tayyip Erdogan gives a statement after a cabinet meeting in Ankara, Turkey, May 17, 2021.

Murat Cetinmuhurdar | Reuters

Turkey's lira fell to a fresh record low on Monday after President Recep Tayyip Erdogan said he was pursuing the expulsion of 10 foreign ambassadors.

The beleaguered currency was trading at 9.738 to the dollar at 11.45 a.m. London time on Monday, hitting an all-time low of 9.82 to the dollar earlier in the day.

Erdogan declared during a rally on Saturday that he had demanded the status of "persona non grata" be applied to the ambassadors of the U.S. and nine other Western countries after they called for the release of Turkish philanthropist Osman Kavala from prison.

The lira, having already hit a record low the previous week after Turkey's central bank cut its key interest rate despite growing inflation, is in for more pain if Erdogan continues on this path, analysts warned. It's fallen 24% versus the dollar so far this year.

"If Erdogan's threat is carried out it would trigger the worst crisis between Turkey and the Western world since the AKP got into power in 2002," Teneo co-President Wolfango Piccoli wrote Monday, referencing the president's political party.

Observers note that the Foreign Ministry has not yet appeared to carry out Erdogan's instructions, as "none of the diplomats has been formally notified," Piccoli wrote. Turkish Foreign Minister Mevlut Cavusoglu, responsible for carrying out the order, has not yet commented on the matter.

Erdogan's comments boosted fears of heightened tensions between the West and Turkey, hitting the already weak lira. Investors have long been concerned about the central bank's lack of independence from Erdogan, who has said that interest rates are "the devil" and holds the unconventional belief that cutting them will reduce inflation the opposite of what most economists say is the case.

If the ambassadors were to be expelled, "the lack of Western diplomatic representative in Ankara will hurt Erdogan," said Timothy Ash, emerging markets strategist at BlueBay Asset Management. "The 10 will reduce interaction with the Erdogan regime and investment into Turkey will suffer."

The 10 countries whose ambassadors were targeted by Erdogan the U.S., Canada, France, Germany, Denmark, Norway, Sweden, Finland, New Zealand, and the Netherlands account for half of Turkey's top 10 trading partners. The group also includes seven NATO members and six EU members.

"It goes without saying that the beleaguered Turkish Lira would fall under intense pressure, after setting various record lows over the past week," Teneo's Piccoli added.

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Turkish lira hits record low as Erdogan aims to expel ...

ANKARA, Turkey President Recep Tayyip Erdogan sat for an interview on national television late last month, apparently seeking to calm nerves about Turkeys weakening currency and galloping inflation. But the reaction has been anything but calm.

He insisted there was no turning back on his newly announced economic plan, which has promoted policies that seem aimed at defying the laws of economic gravity, like refusing to tick up interest rates to combat rising prices and buttress the value of his currency.

Interest rates make the rich richer, the poor poorer, he said. We have prevented our country being crushed in such a way. We will not allow this.

Turkeys currency, the lira, began sliding virtually as he spoke, capping a day in which it lost 8 percent of its value. It has hardly stopped plunging since mid-November, hitting new lows every few days. Turks have watched staple goods double in price and fuel costs jump by 40 percent.

Mr. Erdogans interview on TRT cost the country billions of lira in just two hours, the opposition Republican Peoples Party spokesman, Faik Oztrak, commented. TRTs show with Erdogan tonight was the most expensive production in TRT history, he said on Twitter. A former prime minister, Ahmet Davutoglu, called on the president to stop. For Gods sake dont talk anymore! he tweeted.

But Mr. Erdogan keeps talking and rattling markets and eroding confidence in the lira and his stewardship of Turkey as he doubles down on a policy prescription that few if any economists agree with and that has left suffering Turks and others wondering why he is doing what hes doing.

Mr. Erdogan has been in power for nearly two decades, with much of his political success built on nearly continuous economic growth that has lifted millions of Turks into the middle class. Facing re-election in 18 months, he is sliding in opinion polls, largely because of the deteriorating economy. His focus is how to turn around the decline in time to boost his election chances.

He is trying to keep the boat afloat in his own way, said Akif Beki, who served as chief adviser to Mr. Erdogan when he was prime minister. He believes that he can turn things around and he can convince people again when elections come closer.

But for now, markets and analysts agree, his medicine is making what ails Turkey worse, and Mr. Erdogan has become increasingly isolated in his economic plan, having narrowed his circle of advisers since his early days as he gathered up virtually authoritarian power for himself.

In particular, Mr. Erdogans switch to a strong presidential system in 2018 has made him more reliant on a small inner circle rather than the wider scope of party officials and elected politicians under the earlier parliamentary system. That has given rise to criticism that he is surrounded by yes-men and increasingly detached from the electorate and economic realities.

Mr. Erdogan has replaced a series of Central Bank chiefs and finance ministers in recent years, confident that he knows the economy better than any of them and reasoning that by controlling monetary policy he could make decisions more efficiently.

He is not listening to the economists which is typical of strongmen, said Ozgur Unluhisarcikli, the director of the Ankara office of the German Marshall Fund of the United States. The president, he added, was increasingly less tolerant of dissent, particularly from within the party.

Indeed, what exasperates many, in businesses large and small, is that Mr. Erdogan is not speaking off the cuff or dropping comments inadvertently. He and his insular team in the presidency, squired by his attentive communications director Fahrettin Altun, have been rolling out prepared speeches, which he delivers live on national television with the aid of a teleprompter.

In his first speech two weeks ago, he expounded at length on his decision to go against most Western economic practice and instead follow China in lowering interest rates and driving down the national currency to balance out Turkeys current account deficit and make its products more attractive for export. He called on Turkish citizens to prepare for a historic struggle in what he cast as an economic war of independence.

He vowed that the country would no longer have to surrender to high interest rates, inflation and currency traps and he promised to improve production, employment and clear the current account deficit.

Turkey may for the first time in its history have the opportunity to follow an economic policy in line with its own needs and realities, he said.

The lira began a free fall within hours of his speech, losing 15 percent of its value in one day. Undeterred Mr. Erdogan gave another speech the next day and several more since, each time reaffirming his determination to lower interest rates in pursuit of growth.

He has reacted to the price increases not by adjusting his own approach but by lashing out at suppliers and warning them not to hoard goods and pressuring supermarkets to keep prices down. Social media was alive Thursday with talk of price increases for toilet paper and milk products.

I am stunned by the increases, said Mehmet Eraltay, who was selling bagels from a cart on the capitals main square Wednesday. It think the end of the world is coming.

Analysts struggled to explain what has prompted Mr. Erdogan to insist on a monetary policy that goes against most widely accepted economic practice of controlling inflation by raising interest rates.

The only thing that is going on now is the upcoming elections, said Mr. Unluhisarcikli, of the German Marshall Fund of the United States. Mr. Erdogan is sliding in the polls, largely because of the economy, and is seeking to regain the momentum ahead of elections in 2023, he said. He is looking for a way out.

Most economists say the Chinese example would take a decade to take effect and could not bring economic relief within six to eight months as Mr. Erdogan is promising.

Mr. Erdogan is also constrained by his political ally, Devlet Bahceli, the right-wing leader of the Nationalist Movement Party, who frequently applies the brakes to proposals by Mr. Erdogan that would improve Turkeys international standing.

Even limited efforts to restore democratic institutions and the independence of the judiciary could go some way to answer investors concerns, Mr. Unluhisarcikli said. It could also help Mr. Erdogans standing with voters, who are feeling increasingly anxious and ignored.

One of the few polling consultants who continues to advise both Mr. Erdogan and his opponents, Mehmet Ali Kulat, said he had to deliver uncomfortable news in their most recent meeting.

His most recent survey found that around 60 percent of respondents were very uncomfortable with the economic situation and 41 percent said they could not meet their essential needs.

There is widespread distrust of government institutions and even anger in reactions of respondents to some questions, Mr. Kulat said. This is something beyond politics.

Yet the president, who is known to closely follow opinion polls, dismissed the poor results and insisted he would still win, Mr. Kulat said. Mr. Erdogan believes the data about the economy that we and other pollsters give is exaggerated, he said.

The leader of an Islamist party, Temel Karamollaoglu, who met with Mr. Erdogan in November, also described the president as dismissive of his concerns.

Mr. President believes that all developments in the economy and foreign policy are fail-safe, he said in an interview published in an online news outlet, Gazete Duvar. He doesnt see any problem. I told him, The information coming to you may be mistaken or different. He doesnt share that idea.

But Mr. Beki, the former adviser, said Mr. Erdogan would be focused on preventing the spread of bad news rather than questioning it.

He believes he knows best, he said. I dont think he listens to advice.

See more here:
Turkeys President Follows His Own Advice Even as Economy Slips - The New York Times