Translated by Ollie Richardson & Angelina Siard
It so happens that I hear and read materials about the devastating impact of American sanctions on the economy of Turkey. Even Ukrainian political scientists in their reasoning advise Ankara to agree to the conditions of the US.
I respect the opinion of every expert as long as there is at least an argument in it and there are no transitions to personal insults, and let’s not forget that any process has two sides.
I, for example, categorically don’t agree that the sanctions policy of the US against Ankara has become the prime cause of the collapse of the lira.
In reality, the lira’s problems started long ago, long before the problems between Trump and Erdogan begun.
The fact is that the Turkish economy is one of the most energy consuming in the world, and respectively they are buying a lot of energy resources, the price for which over the last two years again grows.
The problems with the lira are connected to the fact that Turkey buys more than it sells — a negative trade balance indeed due to purchasing expensive energy resources.
For example, in 2017 the trade deficiency of Turkey grew by 37.5% and was $77.1 billion.
This is where the primary source of problems with the exchange rate of national currency in Turkey come from, and not from the US’ August sanctions against Ankara, especially since for the sake of fairness it should be noted that they were not the most powerful that they could’ve been.
Using how the West builds relations with Ankara as an example, it is possible to see to what extent business is important. Can you guess what country Turkey exported goods to most of all in 2017?
To the country in Europe that Mr. Erdogan criticises most of all – to Germany.
The sum of export was $15.1 billion. In turn, Germany over the past year became the second large exporter to Turkey after China – the sum of export from Berlin was $21.3 billion.
Some may call it a policy of double standards, some may call it cynicism, and some may call it defending one’s national interests. Actually, the name of this phenomenon doesn’t matter because the essence is simple: everyone wants to make money, and nobody wants to lose their markets, even despite political differences.
There are other interesting aspects of the conflict between Turkey and the US. The foreign policy and economic ties of Ankara are diversified – potentially losing their American partners, they have found for themselves alternative, even very profitable proposals and beneficial scenarios for economic policy:
1. Qatar has once again confirmed its readiness to pour $15 billion of direct investments into Turkey.
Pay attention though – Turkey doesn’t run around the world like a beggar asking for loans, like Ukraine.
There is enough confidence when it comes to giving Turkey money.
Western countries will continue to criticise Ankara, but Turkey will continue to attract western capital to itself as an economic entity.
One of the latest statements of the EBRD (European Bank for Reconstruction and Development):
“The European Bank for Reconstruction and Development (EBRD) will keep its ties with Turkey … in connection with changes in the exchange rate of the Turkish lira. … as of today, 271 projects were realised in Turkey with the assistance of the EBRD, and €10.764 billion were invested in the Turkish economy. At the same time, 94% of EBRD investments concerned the private sector”.
Think about it: potentially losing the American market, which, in principle for Turkey is not a priority and not the biggest, they don’t get into debt bondage, but collect investments from all around the world.
Losing one thing, Ankara gains another.
And it in this that the wisdom of state policy lies. Turkey doesn’t behave like Ukraine at all.
Kiev, having lost the Russian market, the generalised figure being more than $15 billion, hasn’t compensated for these losses in the EU market, having received a quota, and took out IMF loans for the sum of more than $15 billion, not to mention the $3 billion in loans from the US and the loans from the EU, etc.
If to listen to our authorities – and I stress: only listen, because it can’t be perceived seriously – then it turns out that we defend the West’s borders, save their democracy, and they love us so much and support us.
So why didn’t any of our western friends propose $15 billion of direct investments?
Trust is verified by money: in simple terms, the West doesn’t trust Kiev with its money, but it turns out that concerning Ankara, which the West criticises from sunrise to sunset, there is trust.
The conclusion is obvious: until those who hold the keys to power in Kiev come to their senses, the investor will never come here, and the debt knot around our neck will only be tightened.
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