Lessons to learn from the economic war on Turkey

BY: Erdal Tanas Karagöl
The Gezi Park events, the Dec. 17-25 judicial coup in 2013, the July 15 coup attempt in 2016 and the latest attack on the economy through the exchange rate, which Turkey has encountered in the last few years, show that the economic war is continuing.

First, there is a constant pressure on the exchange rate and interest. The image tried to be formed during this process and the rating cut applied by credit rating agencies that take advantage of this situation, indicates that the intention is to keep the economy under pressure.

Credit rating agencies, acting as economic crises triggers need to be discussed separately. Because we are constantly witnessing how they use the rating cut overnight upon the slightest hearsay and add fuel to the flames.

Of course, Turkey’s economy demonstrated great resistance against these shocks and continues to do so. The lessons learned from the 2001 crisis, as well as the many grave economic crises it experienced in the past, are what form the basis of this resistance.

Lessons to learn

There are lessons Turkey needs to take from the recent economic coup, both at the national and global level.

So, what are these lessons?

Turkey, which has kept the public finance and banking sector very strong and makes no concessions, especially regarding low public debt and the budget deficit, saw the benefits of this in the 2008 world crisis that brought several countries to the verge of bankruptcy.

Keeping in mind that such operations targeting the economy might be repeated, steps need to be taken without wasting any time to continue this stance in public finance and to reduce the economy’s foreign dependence, hence the need for foreign capital.

Is this easy? Of course not, but it is not impossible either. In the past, Turkey’s domestic productions in the defense industry was at about 20 percent. This was a constant cause of problems with the U.S., from which we purchased certain weapons and machinery and equipment.

The current rate of local products used by Turkey in the defense industry is 65 percent. In other words, Turkey is a country that is able to use its potential in the best way possible and make extremely important breakthroughs in strategic sectors.

Showing the same determination in all sectors has now become an obligation. From now on, resources need to be allocated not for all fields but for strategic areas, namely in fields that will both decrease the Turkish economy’s foreign dependence and increase its production, and hence increase its exports.

Lessons to be learned by developing countries

We cannot be satisfied with taking national notes alone during this process. There are a lot of lessons to be taken globally as well. The new actors of world economy, in other words, developing countries that possess energy sources and with which trade is on a rise, need to be more enthusiastic about changing the now obsolete world economic order – with both its institutes and institutions.

Hence, the trade wars started by the U.S., the sanctions imposed on countries and the dollar now having turned into a means of threat have already made it impossible to avoid questioning this order.

To prevent current international economy institutes, as well as the political power gained through the dollar from becoming a threat for countries, a new money system that will serve as an alternative to the dollar, represent countries’ common ground and make trade easier is needed.

These efforts will prevent the countries that are intending to stage an economic coup, while causing credit rating institutes, which act as the hitmen of these operations, to lose significance and credibility.

In short, we are in a period in which we need to be stronger than ever against the hegemon powers of the world economy. It should be especially pointed out that Turkey, with the cooperation, dialogue, strong trade and investment environment it developed against the wind of change in the global economy, is ready to take control.