Political Tensions Hurting Turkey

(Zaman)–In a 16-page special supplement on Turkey–The Guardian–one of the most prestigious daily newspapers in England–gave an appraisal of Turkey in terms of its economy–history–culture–and tourism industry.

The supplement–intended to ease Europe’s concerns about the latest political tension in the country dwelled–inter alia–on the state of the economy.

To quote the Guardian–"How come a country that only yesterday had run out of hope after crises can become one of the rising stars of today? A certain answer to this question is confidence and stability?"

Quoting an anonymous young businessman–"How can he [Erdogan] say it’s a stable course? Inflation is out of control and the current account deficit is heading for $50 billion." The Guardian–then–in the article titled "Turkey is Fastest Growing Market in Europe," summarized the accomplishment of the Erdogan government–quoting Erdogan–"We are not the old Turkey that would have been swept away by any wind blowing."

The paper also added: "Under Erdogan–Turkey has had four years of stellar growth since the 2001 crisis eroded national wealth by 9 percent and blew the currency to the bottom of the Bosphorus–and won premiership status among emerging markets. Growth averaged 7.3 percent a year–inflation was tamed to 8 percent (and still falling)–foreign investment rose to $9 billion in 2005–income per head is up to $5,000–privatization receipts topped $9 billion last year–tourism income nudged $18 billion–listed businesses’ values are up five times to $150 billion–and the government budget deficit has been slashed to 2 percent."

Despite the encouraging numbers on the economy–however–the paper touched upon the negative indicators–such as unemployment–income discrepancy between the rich and the working class–current account deficit–and the underground economy–and added: "But–along with this rising-star status–came darkening contradictions. Unemployment–officially 11 percent–stood closer to 18 percent; income discrepancy widened with 10 percent owning 30 percent of national wealth; the current account deficit grew to 6 percent; the black economy bulged to around 40 percent of output."

The guardian further quoted Omer Sabanci–chairman of TUSIAD–the main business lobby in Turkey–saying "Market confidence in [Turkey’s] political stability and the sustainability of its economy has been shaken."

The Guardian also added the words of Mustafa Koc–head of the eponymous holding–"…Older business leaders are politically hostile to the suspected plans of Erdogan’s ruling AKP party to cement its Islamist control by calling elections in November–a year ahead of schedule–and electing him president. Their views are out of kilter with a younger generation of executives who see Turkey inexorably committed to Europe and–increasingly–as the financial hub and power-broker in a region stretching from central Europe via the Caucasus to the Middle East."

In the supplement–the Guardian also commented on the financial sector in Turkey–mentioning that–"Foreign investors are rushing to purchase stocks of Turkish businesses. Only recently the National Bank of Greece dished out $2.44 billion to purchase 46 percent of Turkish Finance bank. This points to how distant the crisis is."

Touching upon the reforms of the Turkish Government to facilitate the procedures for foreign investors–the Guardian wrote: "Government’s efforts helped bring the banking standards in Turkey closer to those of the EU."

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