MENA Observatory – Editorial Board
Day after day, the economic situation in Turkey is getting worse, and the living conditions of its citizens are worsening as the trade deficit widens, the unprecedented collapse of its national currency against the dollar, and what made it more difficult is the continuing outbreak of the Corona virus in most states, which played a role in inflation rates, in addition to being affected Banks with the high volume of debts since the receipt of the Turkish President’s son-in-law, the Treasury and Finance Ministry, and control of everything, yet supporters of President Recep Tayyip Erdogan are still chanting the successes of the Turkish economy, as if it parallels the Chinese economy with its diversity, capabilities and solid structure, while international reports follow, It reveals facts that may be new to Erdogan’s audience and his supporters, and from what was stated in a report by the International Monetary Fund and by the former CEO of the Fund Desmond Lachman, that “Turkey will be among the first countries that will default on its external debts if the global liquidity situation worsens.”
“Turkish companies and banks will soon face problems paying about $ 300 billion in debt due to the weakness of the economy and the currency in the country,” Lachman added, during his statements in a televised interview with the Greek news site Liberal, which was published on Monday. He accused the Turkish government of denying what is happening, describing it as “still in denial of the country’s economic and financial problems and lacks a strong strategy.”
Erdogan’s son-in-law rules everything
“The Turkish lira fell to successive record low levels against the dollar this year, as the government of President Recep Tayyip Erdogan encouraged a boom in borrowing by companies and consumers, and the central bank kept interest rates at less than,” said Lakman, a resident researcher at the American Enterprise Institute. Inflation level. These policies have led to a boom in imports, which has led to an alarming widening of the country’s current account deficit.
The former CEO of the International Monetary Fund accused the Turkish regime of dissociation in its analysis of the financial situation in it, saying: “Anyone who doubts the extent of Turkey’s decoupling from reality should look at the over-optimistic goals contained in the latest new economic program announced by Treasury and Finance Minister Berat Albayrak late Last month”. He was also surprised by the irresponsible statements of the Turkish Minister of Treasury and President Erdogan’s son-in-law, saying: “At a time when his country is going through a currency crisis and its tourism economy is ready to take another blow from the second wave of the Corona epidemic in Europe, Mr. Albayrak assures us that the Turkish economy will fully recover in In 2021 and it will grow at about 6 percent.
The decline in the value of the Turkish lira
“Lachman” is an expert with more than one position and more than one role, including that he is a former chief economic strategist for emerging markets at Salomon Smith Barney, and previously held the position of Deputy Director in the Policy Development and Review Department at the International Monetary Fund. He pointed out that the Turkish lira declined by 25 percent this year, as well as the disappearance of most of the central bank’s foreign currency reserves in favor of supporting the lira.
The international expert emphasized that: “Once the global liquidity situation begins to deteriorate, Turkey will be one of the first countries to default on its foreign debts.” Expected a more widespread debt crisis in emerging markets, which will harm the global economy.
The former CEO of the International Monetary Fund, who explained what is happening, that “the problem is that emerging economies in general entered into the crisis caused by the epidemic with very high debts, and today they are exposed to a complete storm of low commodity prices, as well as weak international markets as a result of The effects of the epidemic ”. After that, he reached an important and very important conclusion when he said, “This will cause these economies to witness the worst recession in 90 years in addition to budget deficits, and he expected that the world will witness many bankruptcies, especially in Latin America, Turkey and South Africa.” .
European Union sanctions
With the financial markets closed on Tuesday, the Turkish lira recorded its weakest levels at the end of last week, and the beginning of this week, for fear of possible sanctions after the international “Bloomberg” agency published a report that Ankara will soon test the Russian S-400 air defense system. It has bought, and what appears to be an escalation of tensions with the European Union, increasing the chances of sanctions against it. The concern began with the lira losing about 0.5 percent to a record 7.8 per dollar. It was priced at 7.7950 pounds at 1503 GMT. Washington has also previously signaled sanctions over the S-400 missile system that Turkey bought last year but has not yet used it.
The risks of imposing sanctions from the European Union also increased after Turkish President Recep Tayyip Erdogan told German Chancellor Angela Merkel that the decisions taken during a union summit earlier this month were insufficient to overcome the ongoing disputes with Greece and Cyprus regarding maritime rights.
Falsifying the facts
Media outlets reported several leaks from the Turkish interior, confirming the Turkish officials ’evasion of telling the truth and their continuous attempts to falsify the facts. Among these means is the Bloomberg Agency, which cited the statements and statements of the former head of the Turkish Statistical Office and Political Opposition, Birol Edemir, who spoke at length about The fact that the Turkish government falsified information related to the economic crisis that the country is exposed to.
Edemir accused the Turkish government of schizophrenia due to its contradictory justifications, saying: “The Turkish economic data is currently separated from reality, as officials of the Statistics Office are chosen according to the loyalty criterion to the government and not on the basis of merit and merit.” Exposing the tampering with the incoming data: “When you manipulate the data, you go the Greek way,” referring to the manipulation of Greek governments with economic data in the first decade of this century, which led to the outbreak of a severe financial crisis in Greece in 2009.
The former head of the Turkish Statistical Office and the political opposition was not satisfied with these statements; Rather, he said, through the Turkish newspaper “Suzko”, that “national data on growth, jobs and inflation are” extremely questionable. ”
Despite all this evidence and statements presented by reputable experts and agencies, the Turkish government is still in denial of the country’s economic and financial problems and lacks a strong strategy, and therefore anyone who doubts the extent of Turkey’s decoupling from reality should look at the overly optimistic goals. Contained in the latest new economic program announced by Treasury and Finance Minister Berat Albayrak late last month, and this is what Lachman confirmed on more than one occasion.
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