Can we say ‘one minute’ to credit rating agencies?

BY: Merve Şebnem Oruç*

Fitch Ratings announced its Turkey rating in August and maintained its “investment grade” assessment, confirming the credit rating as “BBB-.” However, it changed the grade from “fixed” to “negative.” Fitch claimed that the Fetullah Gülen Terror Organization’s (FETÖ) “failed coup attempt confirmed that the risks targeting Turkey’s political stability have increased,” and said that this is expected to affect economic performance, adding that growth is expected to weaken due to the decline of investments.As for Moody’s, following the FETÖ coup attempt, it skipped making an assessment and in its statement had said that the assessment process was continuing. Moody’s completed its assessment and made the statement last week. The agency downgraded Turkey’s credit rating a notch, bringing it below the “investment grade” category and changed it to “fixed.” In its statement, remarking that Turkey is in “a fragile financial and geopolitical state,” it said that no investment can be made due to the ambiguous atmosphere.

In short, while previously two of the “three giants” rated Turkey in the “investment grade” category and one in the “junk,” now two are saying “junk” and one is saying “investment grade.” Naturally, following Moody’s statement, the credit rating agency received strong reaction from Ankara and economy circles. There is no doubt about this. Of course these international credit rating agencies that claim they are political and “independent,” act in accordance with the interests of the global capital system. Hence, there is nothing surprising about this decision.

We are inwar with the global financial system based on the hegemony of the “U.S. dollar”, called the “superior mind” and borrowing with interest. We always say it; we are fighting this war against those using terrorist organizations like the Kurdistan Workers’ Party (PKK) and Daesh and the other terrorist group, FETÖ, which has lost its “crypto” quality, as tools and proxies. And, the secret hand behind these groups is becoming a little more visible to the eye and recognizable by the day. However, the tools of this structure are not terrorist groups alone, they also include the international media, which claims to be “independent” but belongs to the bosses of the current world order, the think tanks funded by them and the prerequisite to sustain this order, financial tools, also work constantly as proxies used by the same structure. One of these financial tools is the international credit rating agencies.

We have been in an open struggle against these agencies that have been stingy and suspicious toward Turkey regarding giving a grade within the flexible limits they determined themselves even at times when our country’s economy was at its strongest, since the day we paid off our debt to the IMF. However, while they are attacking us with all their tools, we are not standing idle either. For example, did the Central Bank give up its interest reduction policy right after July 15? Didn’t the Central Bank continue to drop the interest rate in August and September? Didn’t the Central Bank, which has dropped the interest rate seven times – one after the other – bring the interest corridor to a historical low?

A country moving within the global system and developing through bowing down to the bosses of the system, cannot, in whatever way or for whichever reason, dare make such a move. However, Turkey is challenging this system and openly saying, “You can all attack; I will not bow down to you.” In the meanwhile, Turkey was experiencing terrorist attacks one after the other, facing a terrorist coup attempt, refusing to change its policy against a war happening at its border in accordance with the desires of the global system, opening its doors to 3 million refugees – even though they were against it – and is implementing its own policies independently regarding this and many other similar matters. While on top of all this, as the country is continuing to reduce interest rates despite all financial pressures, Moody’s saying Turkey is not “investment grade” is not surprising at all in such a war.

What we need to do is have a state of mobilization like on the night of July 15. Since we are challenging the global system and all its tools, then we can also challenge the credit rating agencies’ “junk” manipulation as well. The government should continue to pace up structural reforms and maintain financial discipline. However, the local investor should also increase its investments in Turkey – it should take risks and boost the market without expecting everything from the government. It should give no opportunity for anybody to say, “Local investors are not investing, so why should the foreign investor come and invest?” The “Investment package for the east,” which was announced by Prime Minister Binali Yıldırım in early September, contains incredible incentives and supports – the private sector should not skip this. Turkish businesspeople should be inspired and encouraged by the megaprojects that come to life with the public-private partnership (PPP) investments and be part of brand new projects. The short-term investments through which local capital and guarantee sectors like construction have become used to profiting fivefold should go beyond the industries they have become accustomed to and attach importance to long-term and technology-focused projects with high added value and support projects developed by youth.

Moody’s may have downgraded Turkey’s rating, but what don’t they do to the countries that claim independence? If we manage to see this not as a crisis but rather an opportunity, we can eliminate our country’s dependency on foreign investment, which is when we can become completely independent.


*Merve Şebnem Oruç is a Turkish journalist and columnist.

(Published in Daily Sabah Turkish newspaper on Sunday, Oct. 2, 2016)