In a recent episode of the long-running program Al-Etejah al’Mu’akis on Al Jazeera Arabic hosted by Faysal al-Qasim, two guests based in London and Istanbul, debated ‘why the value of the Turkish Lira was falling rapidly’. The following are key excerpts from this episode translated into English.
According to various media reports, Turkey’s currency has lost about 45% of its value this year.
The two guests featured in this episode were:
– London-based writer and journalist Ghassan Ibrahim (situated on the left of the host in the image above)
– Istanbul-based economist and political analyst Yusuf Katipoglu (situated on the right of the host in the image above)
Source: AlJazeera Channel (YouTube)
Date: November 16, 2021
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You know that a while ago Turkey ranked 17th place in terms of GDP. The question is: where is Turkey now? It was among the top twenty. It went down from 17th place to 20th. Today, Turkey ranks lower than 20, maybe 21 or less. Do you think that this indicates that the Turkish economy is improving and advancing?! Or if we add the insane collapse of the (Turkish) lira to that, we find that, as Ghassan told you a little bit ago, this bubble will burst or has already begun to burst.
Yusuf Katipoglu, economist and political analyst:
Please give me enough time (to answer), Mr. Faisal. I hope there would be a fair distribution of time.
First, I would like to raise my objection to you for not giving me enough time. You were not fair to me. I will respond to your guest’s words first, then I will respond to yours. Your guest says that the industrial sector did not make any profit, therefore there is no funding going towards the industrial sector. He said that Erdogan is taking all the money for himself and his group. Well, if this is true, then why is there a rise in FDI reaching to $210 billion in the last 15 years? It was 1.2 billion from 1982 until 2002 before the Justice and Development (Party took over). Once it did, the FDI became $217 billion.
(Your guest) says that no one is investing (in Turkey) and that there are no foreign investments. Well Siemens made a billion-dollar investment in solar energy in the Turkish market. (Your guest) talks about Erdogan’s mentality and says that he is making mistakes in the management of the country’s affairs and that Turkey has been added to the grey list. This is good as it proves that the matter is subject to politicisation. Credit rating providers: Fitch, Moody’s and Standard & Poor’s rated Turkey as not suitable for investment with a B-, but classified Egypt, which is indebted to the International Monetary Fund, as attractive for FDI. This is what we were talking about at the beginning of the episode: conspiring against Turkey by politicising economic matters, by attacking Turkey.
Let me tell your guest something. He says that Ali Babacan and Ahmet Davutoglu were great economists and they left Erdogan because he mismanaged the country’s affairs. Well, if he did so, then how did the GDP in Turkey rise by 21%?
21%?! Wait a second, wait a second. A growth rate of 21%, Mr. Youssef! Come on! Who gets such a percentage? China’s is 8 for God’s sake!
Let me tell you something. In the second quarter of 2020, the growth rate reached 21.7%. I know what I’m saying. In the second quarter of 2020, (it reached) 21.7 %, number one worldwide. These are official numbers. This does not appeal to your guest.
Then you said that Turkey has left the G20. Logically, Mr. Faisal, how did Turkey leave the G20 and get invited to the G20 (summit) at the same time? The report says that Turkey is now 16th in the G20 ranking. It is qualified to rank 13th in 2030. Be fair!
Then your guest says that Halkbank and other banks in Turkey are accused of corruption and he makes a lot of accusations. These accusations are groundless. The (existing) reserves in the Central Bank of Turkey are 127 billion dollars. Your guest says that there are no reserves in the Central Bank! Let me tell you something. Why is Turkey being targeted? Turkey has withdrawn 606 tons of gold, which is the tenth largest reserve of gold, from the banks of America and Switzerland, and has brought them to the country. Why is Turkey being targeted? They are fighting Turkey because it refused to take loans from the International Monetary Fund despite external pressures from here and there, (because) it is a sovereign country that does not follow (foreign) orders like the rest. Turkey is being targeted because it wants to support all sectors and all Turkish people of all stripes.
I agree, there is a conspiracy (against Turkey), but what is this (strong) economy and this arrogance, after which an American official comes with a tweet – Trump wrote a tweet of 5 words after which the Turkish lira and the entire Turkish economy collapsed?! Come on now! I mean, an American word can destroy the Turkish economy. You are only powerful when it comes (to fighting) Syrians.
You don’t know (the state) of the Turkish economy only by its currency, Mr. Faisal. It is Turkey’s ability to have strong production, strong exports and a high growth rate, and its record breaking, and this reflects its powerful economy…we expect an (economic) growth rate of 10% on a yearly basis, I told you, the (growth rate) was 21.7% in the last quarter, and 7% in the quarter before, (and) we expect (a rate of) 10% by the end of the year. The economy of Turkey is strong with its defense industries, 80% of which is comprised of domestic manufacturers. One of every three electronic devices sold in Europe is a Turkish device. Turkey is the largest iron-producing country in the world. The US and foreign countries import (products) from Turkey. Turkey now is manufacturing its own cars, aircrafts, and weapons. The defense industries now have a budget and it’s considered an internal budget (i.e., government-funded).
– great –
– and I’ll tell you another thing, why is Turkey economically strong? It’s economically strong because it holds the decision of sovereignty in its hands. It’s true, the (Turkish) currency gets affected (by external factors) and is changing, but (the fact is that) there is currency speculation, there is (external) influence on the currency (exchange rate), and there are some who want to demonise (the Turkish economy) and say that the Turkish economy is weak. (However,) if the Turkish economy wasn’t strong – let me tell you another thing, the ratio of trade deficit has been reduced by 40% because the exports achieved record numbers and the imports decreased. Moreover, the energy bill that Turkey pays for importing energy is $42 billion, half of it will be compensated by the discoveries of natural gas and resources of alternative energy existing today in Turkey. Turkey, my friend, is strongly heading into the 10 most powerful economic states in the world, your guest does not know what Turkey is –
– Very good, just a minute –
– He only gives ear to those who wish to demonise Turkey –
– I gave you enough time. Ghassan, I challenge you to answer (back) to these reasonable economic (facts) said by Yusuf Katipoğlu: 80% of Turkey’s defense needs are of domestic production; find me a country in the world that has reached this level of defense industry (advancement) which Turkey has reached! (In addition to) the electronics (industry), and the sovereign decision, Turkey is being fought because it practices national decision-making in its economic (sphere), and that’s what upsets the West. The West tried to stage a coup in Turkey years ago and failed, so they started to economically bring Turkey to its knees and demonise it and strike the Turkish economy etc. What do you have to say about this Mr Ghassan?
Ghassan Ibrahim, Writer & Journalist:
Actually – regarding the conspiracy mentality, that the West staged the coup and it wasn’t (planned) internally in Turkey, that’s another thing. However, there are many issues which your guest has talked about and contradicted himself on within 2 minutes (only).
He said that Turkey’s ranking is 16, then he said it’s 10 and that the economic growth (rate) is 21%. I dare anyone to go to Google – I call upon the audiences to grab their phones and browse Google and look up the rate of economic growth in Turkey; there’s no (growth) rate such as 21%! And no state in the world has (achieved such a rate)! Therefore, there are figures being thrown out absurdly.
He also talks about the investment flows, these are previous investments that occurred when the Justice and Development Party claimed that it wishes to join the European Union. It was the European funds that caused the economic bubble and the temporary economic renaissance, and its negative effects that we began to see (are clear) with the decline of the (Turkish) lira and the halt of foreign investment.
As for what he said, that 80% of Turkey’s military needs is made up of local industries, it’s simply because the Americans stopped selling aircrafts to the Turks, which is the highest cost; I mean, Turkey participated with the Americans in the manufacture of simple parts for the F-35 aircraft, (but) when the Americans got upset with the Turks, they told them ‘we won’t sell you these (weapons)’. Therefore, they (i.e., the Turks) are forced to manufacture armoured vehicles, (and) Turkey has been (undergoing the process of) manufacturing armoured vehicles for 10 years using German, Russian, and Korean parts, and it hasn’t succeed yet, and the only thing that (Turkey) succeeded (in manufacturing) was drones, whose designs were stolen from American aircrafts.
Thus, they are forced to depend (on themselves) because no one wants to sell them (weapons) except for the Russians; they would sell them a missile, and when they launch it, it would fall inside Turkey! So, they couldn’t obtain any (foreign-manufactured weapons); the French do not sell them, nor the Germans or the Americans. So, they are forced to (depend on themselves), it’s not a heroic act. Secondly, if all this data your guest talked about (shows) that Turkey is actually successful, why are we witnessing the drop of Erdogan’s popularity (among the Turkish people)?
– Ghassan, Ghassan hang on –
– it’s a simple question! –
Your talking as if the Turkish people wish to immigrate man!
Of course! (it’s true), have you noticed – an opinion poll was conducted last month and the results were announced this month, it says that two thirds of Turkish youths would have immigrated from Turkey if they could. This is an indicator that assures you that the Turkish people are dissatisfied with these policies
Erdogan, through his attempts of doing heroic acts dealing with external countries, is trying to convince the Turkish street to vote for him; he was threatening the Syrian Kurds for more than two weeks, that he will strike the Syrian Kurds, (but) without an American or Russian green light, Turkey cannot do anything! Erdogan is (now) counting on convincing the Russians by any means to conduct a military operation in Syria. The Americans preferred to cooperate with Kurdish factions over cooperation with Turkey, which is a member of NATO.
As Turkey has no friends left, its economic collapse is normal. Let’s be realistic: the people wish to escape from this country, and the economic (facts) lack any facts that indicate an actual revival. It is normal for the Government Statistical Institute to give (unrealistic) figures, to say that the rate of growth is 20%, 5%, or 10%, it is (arbitrarily) throwing figures. (Yet, for these) figures to be real, you should see that there are people working, that there are people who want to stay in Turkey, and (it would be real) when you see funds flowing into Turkey.
Transparency International ranked Turkey – I believe – 117 out of 140, and Turkey was (previously) ranked among the 90s; its transparency decreased due to the spread of corruption –
– Great –
– there is also a very important indicator emanating from the idea of the sovereignty (integrity) of justice; imagine a country being governed by the Justice and Development Party, but ranks among the worst countries in the world for the lack of justice –
– (Okay,) great –
– there is no rule of justice –
– Very good, Mr Yusuf –
– Erdogan can ask a judge to take whatever decision (suits him) with (just) one phone call!