What’s the matter with the Turkish Lira?
09 June 2018
The Central Bank of the Republic of Turkey (CBRT) surprised markets this week with a 125-basis point (bp) rate hike. The bank had already hiked the rate 300-bp two weeks ago. Can this move now boost the value of the Turkish lira against the dollar? I don’t think so.
Turkey, Argentina and that déja vu
02 June 2018
Turkey and Argentina were like economic twins back in the 1980s. They shared many stories about the balance of payments, currency crises, and IMF conditionality. The twins diverged later with Turkey seemingly outperforming its twin. But recent events brought them back into the same fold, and this time, Argentina appears to be in a more advantageous position. Let me explain.
Turkey needs a new story
19 May 2018
The lira is in free fall, and the entire Turkish economy is reeling from its effects, suffering in silence, praying for deliverance. In his three-day state visit to UK this week, President Erdoğan gave lengthy interviews to financial outlets and met major investors for dinner, presumably to stop his currency’s fall. What happened? The lira lost another 5 percent against the dollar, declining from 23 cents a lira to 22 cents. It seems that we don’t have a good story to tell the world any more, and the world votes with its cash.
Nation States and MENA
12 May 2018
Remember what Robert Reich, President Clinton’s labor secretary, said about the Republican-led government shutdown in 1996? “You know, much of what the federal government does in the United States... is to provide what is almost a large insurance policy for people. And it’s only when you get into trouble...that you realize that the insurance policy has effectively been cancelled. And that’s what’s happened now” he said. I think that this is a good way of thinking about the modern nation state. It’s not only about building roads and schools and military bases but also a regulatory edifice to operate the country, oversee markets, and create an environment for your citizens to freely interact with each other. That is what the Middle East urgently needs.
Ready for cohabitation a la Turca?
05 May 2018
When asked about the situation in Turkey, I have recently been quoting Austrian-British philosopher Ludwig Wittgenstein: “You cannot draw the seed up out of the earth. All you can do is give it warmth and moisture and light; then it must grow.” Countries change by interaction, not by design. That is what is happening in Turkey. The country is changing, and if you take the long view you’ll see it’s changing for the better. Let me tell you why I am a cautious optimist regarding the upcoming elections in Turkey.Turkey is due to hold snap presidential and parliamentary elections in less than two months. Many constitutional amendments passed in the April 2017 referendum will go into effect after this election. The world is struggling to make sense of things: Where is Turkey going? Is this the e
The silent backdrop to the election
29 April 2018
Turkey is heading into snap elections in less than two months. A glance at the headlines tells us one thing: Afrin is out, elections are in. You can tell a lot about a country by headlines alone. Since 2002, Turkey has had four parliamentary and one presidential election. Issues of identity play a role in these things, but then, as now, one factor is vital: the economy. As in 2002, it’s the current unsustainable state of the Turkish economy that has brought the elections to the fore. Let me elaborate.
“Soft revolution” in Armenia: A Historical Day for Democracy, Justice and National Unity
25 April 2018
For the past week, Armenia’s capital Yerevan has been witnessing unprecedented demonstrations. Thousands of people are taking to the streets in protest against the reelection of former president Serzh Sargsyan - it is important to make a note that "former president Sargsyan was elected for prime-minister post". The demonstrations started on April 13, in opposition to Sargsyan’s nomination for prime minister, and gained momentum when on April 17, he was elected Armenia’s prime minister based on the 77 Parliament votes with no abstentions.
Plunging Lira, early elections
21 April 2018
President Erdoğan surprised everybody this week by rushing the country into early elections on June 24. That’s in two months, mind you. Why this rush? I think the unbearable and uncontrollable plunge of the Turkish Lira is the major culprit.
Why did Halide Edip give her son a Japanese name?
14 April 2018
Presidents Erdoğan, Putin and Ruhani were in Ankara last week to talk about Syria. Their photo has been plastered across the news for much longer than is typical for this sort of thing. Western friends are puzzled and a bit upset, like someone who has just heard that their long-lost friend joined a drug cartel. Bob Menendez, a senator from New Jersey and ranking member of the powerful Senate Foreign Affairs Committee had a more mature attitude.
The Turkish Lira is plunging despite high growth. Why?
07 April 2018
Turkey had a record growth rate of 7.4 percent in 2017. As of April, the lira has depreciated by 8 percent in 2018. This trend, it seems, will continue. Can we say that record growth has made the Lira more vulnerable? And if so, why?