Turkey’s problem is the president himself

Despite President Erdogan’s attempts to boost the country’s economy, it has been unsuccessful and the Turkish currency is depreciating. But with growing fears over the country’s economy has declined in investor’s confidence since 2016, undermining Erdogan’s financial strategy. 

The real cause of the current crisis in the country came in 2018. August, as tensions between the United States and Ankara escalated. Trump has repeatedly tried to impose economic sanctions on Turkey.

Turkish foreign policy decisions have created widespread reluctance to invest money in the Turkish market; a recent Santander investment report warned of “proximity to/exposure to conflicts in Syria and Iraq which enhance the security risk” alongside “increasing unrest and political conflict.” 

Only significant and concrete changes will restore investors’ confidence in the country’s ability to resolve its severe fiscal deficit and bring back the foreign direct investment the country needs.

Given the state of Turkey’s economy today, it is easy to forget that it was once an attractive option for those interested in emerging markets. But 17 years of Erdogan’s mismanagement has sent foreign money fleeing. 

This was particularly evident in the Turkish Central Bank’s June report, where statistics showed more than $8 billion of foreign investment being withdrawn from Turkish stocks between January and June. 

The restoration of the Turkish economy will thus take far more than a speech or the replacement of some cronies with others (the newly appointed Central Bank governor, Naci Agbal, and finance minister, Lutfi Elvan, are both close Erdogan confidants and members of the governing AKP).

Since Erdogan’s takeover, Turkey’s economy has been in shambles. People’s lives are being affected by the depreciation of the lira against the dollar and the euro.

Meanwhile, Turkey’s unemployment rate has recently risen, leading to effect living standards. Turkey’s military is growing, fighting a lot of fight warzone, whose last fight was in Nogorno Karabakh and Libya.

The reason for Turkey’s economic precariousness is no secret. Turkey’s problem is the president himself; improvement won’t come until he leaves.