Thursday, 9 June 2016

The President of Turkey Is Angry -- Again

Turkish president Tayyip Erdoğan is unhappy and angry – again. What upset him this time was the German Bundestag vote labelling the massacre of Armenians in Ottoman Turkey in 1915 genocide. But this anger and unhappiness are pretty much his default position when dealing with any criticism from Western countries.

By now governments in Europe and the United States should be familiar with the outrage and shock, shock of the ‘hypocrisy’ and ‘double standards’ he accuses the West of applying to Turkey. They should also pay absolutely no attention to this act – designed as it is for home consumption to ‘prove’ once again that Turkey is the victim of dastardly, perfidious outside influences. This might play well in Sivas, but not so well in Berlin.

When confronted with demands that Turkey stick to the original terms of the migrant deal allowing visa-free access for Turks to most of the European Union, Erdoğan’s henchman respond with real or feigned umbrage, loudly proclaiming that Turkey has ‘other options’ than the EU. Such as??

There was a time when the ‘other option’  claim might have been true. But under Erdoğan’s bizarre foreign policy and over-heated rhetoric Turkey is left with no other options at all. The Arab League does not want Turkey. The other Islamic countries are not about to submit to Turkish leadership. The so-called Shanghai Five group of Russia, China and various Central Asian autocracies might once have been a natural home for Erdoğan. But, given the rift with Russia, even that loose alliance is out of the question. Ever persistent, Erdoğan has turned his attention Central African countries in hopes of boosting economic and political ties. Well, who knows, that might just work. And then he can claim close alliances with Uganda, Kenya, Burundi, et. al. to fill the gap left by the European Union.

Erdoğan's lack of international influence was hammered home at the recent funeral of boxing great Muhammad Ali in Louisville, Kentucky. Erdoğan gathered together a plane load of flunkies and hustled off to Louisville in an attempt to show the world what a major player he was. Instead, he wound up looking like a completely out-of-place yokel who was told in no uncertain terms that he would not  speak at the funeral and would not be allowed to place a cloth from the Kaaba over Muhammad Ali's coffin. The humiliation only deepened when Bill Clinton and Arnold Schwarzenegger were seen greeting people at the funeral while Erdoğan was ignored. Miffed at this treatment Erdoğan packed up his entourage and returned to Turkey a day early.

Does anyone recognize this man??
This impotence in the face of the EU and U.S. infuriates Erdoğan. But, for the time being at least, there is nothing he can really do about it. He has never learned the first lesson of problem solving – ‘when you’re in a hole stop digging.’ The lesson for the EU leaders should be that they can afford to ignore Erdogan’s tirades when they remind him that brutal force against all real and perceived domestic opponents has severe negative consequences for Turkey.

All the trade and investment data show conclusively that Turkey is economically bound hand and foot to the European Union and North America. The EU countries and United States dominate trade with Turkey. The lion’s share of the dwindling foreign investment originates within the EU. Turkey depends almost entirely on funding from Western sources to close its current account deficit. None of this reality, however, stops Erdoğan from slamming the so-called ‘interest rate lobby’ for all of Turkey’s financial frailties.

The economic costs of Erdoğan’s  approach can best be seen in the numbers for direct foreign investment.

Since the banner years of 2006 and 2007 when direct foreign investment totalled almost $20 billion each year, the numbers have been falling sharply. In 2014, foreign direct investment tumbled to $8.5 billion. Last year in bounced up slightly to $11.8 billion, but in the first three months of 2016 it dropped to $1 billion compared with $3.3 billion in the first three months of 2015. One of the interesting points of this data collected by the Turkish Central Bank is that more than 80% of the direct foreign investment originates from Europe and North America – the very countries that bear the brunt of Erdoğan’s rants.

Meanwhile, the level of investment spending by Turkish companies outside Turkey continues to grow. In 2014 and 2015 it was more than $5 billion, and figures for the first three months of 2016 show a similar trend. This trend was reinforced by a comment from a senior officer of a large Turkish company who said he had more than $100 million to invest, and that every dollar of this amount was going outside Turkey. “There is much less risk outside Turkey than inside these days,” he commented.

A logical person might conclude that it is time for Erdoğan to recognize a few economic home truths and tone down is vitriolic anti-Western rhetoric. But then, one is not quite sure just how big a role logic plays in his foreign relations.

The problem is not limited to foreign relations. Domestically, the country is sharply polarized and violence has increased sharply. Previously the armed clashes were limited to the south-eastern part of the country. No longer. Now those bombs and clashes have migrated to the nation’s largest cities. One immediate effect of this trend is on the once-strong tourism sector. Tourists are staying away in droves, and one tour operator told me hotel occupancy around the country has fallen below 50%.
The latest car bomb in Istanbul killed 11 people
Of course Erdoğan and his henchmen blame foreign forces rather than look to anything they themselves may be doing wrong. Favorite targets are the Crusaders, the Mongol invaders, the Sevres Treaty, of course the Germans, and now even the hapless Zoroastrians are being blamed for car bombs in Istanbul. The government media overlook the wonderful irony of blaming the Crusaders while dressed up in warrior costumes of the Ottoman Empire – a far more successful crusading enterprise than the Crusaders ever were.
Ah, the good old days when people listened to the Sultan

A decade ago Turkey was considered a rising star among the so-called emerging markets. Leaders praised it as an example the combination of democratic values and ‘moderate’ Islam, a country that could be a shining example to the struggling nations of the Middle East. Sadly, those days are long gone.

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