The Central Bank of the Republic of Turkey has thus far managed to succeed in walking a fine line between hiking interest rates in order to stave off further inflation while managing to maintain an atmosphere of accessible capital which is necessary for Turkey’s rapidly growing economy.
Turkey continues to follow this Keynesian growth pattern, but in the last several weeks, western currency speculators including in organisations under the leadership or influence of George Soros have been speculating against the Lira in what the Turkish President saw as a clear attempt to meddle in Turkey’s electoral process prior to Turks going to the polls in a Presidential and parliamentary election on the 24th of June.
Despite hiking rates and working to streamline variable interest rates across the Turkish banking sector, the hybrid monetary war being waged against the Turkish economy by major western financial institutions continues with ever increasing aggression. The US based credit rating agency Moody’s has threatened to downgrade Turkey based on recent trends in the Lira and what is deceptively being called the political situation prior to Presidential and parliamentary elections on 24 June.
In reality, western financial agencies in almost certain collusion with various western so-called “deep states” are working to undermine confidence in the rapidly growing Turkish economy in an attempt to create a recession in Turkey which could itself have negative political ramifications for Turkish sovereignty. While many are still obsessing over the alleged use of English language social media by Russian actors in attempts to meddle in the 2016 US Presidential election, actual meddling in Turkey’s political process is being openly conducted by financial agencies who have speculated against the Lira and are now threatening to downgrade Turkey’s sovereign credit rating in a clear attempt to create a crisis of stagflation in an economy whose growth has thus far been generally consistent.
The Lira itself remains low versus the US Dollar but has nevertheless stabilised since the recent interest rate hikes. Nevertheless, this has not stopped Moody’s from taking a swipe at the Turkish economy.
The message to Turkey should be clear: so long as the Turkish government pursues an independent geopolitical and developmental strategy, the western financial system will exert every form of pressure at its disposal to try and drown the otherwise buoyant Turkish economy.
The US and EU both have multiple grudges against Turkey that have led to this juncture. Some of the key points of contention include:
1. Turkey’s anger at the US refusal to condemn the Fethullah Terror Organisation (FETO) and extradite its leader Fethullah Gulen
2. The US refusal to come clean about FETO agents working at US consulates in Turkey
3. The US backing of the YPG/PKK terror group in Syria in spite of a recent agreement where the US stated its intention to cooperate with Turkey in disarming the terrorists, beginning in the Syrian city of Manbij
4. US anger at Turkey’s strident condemnations of “Israeli” war crimes and likewise Ankara’s strong opposition to the moving of the US embassy in occupied Palestine from Tel Aviv to Jerusalem/Al-Quds
5. Turkey’s anger at attacks against Turks and Muslims in the European Union and the lack of consideration expressed by EU leaders
It is clear enough that the US is keen on seeing Turkey’s President Erdogan replaced by a less independent minded and less multipolar figure. But since no such pliable pro-western leader is readily available to unseat the incredibly popular Erdogan who looks set to win this month’s election with comparative ease, the US has resorted to hybrid strategies to upset Turkey’s attempts to balance its eastern and western partnerships in its own sovereign interest.
The solution for Turkey is clear: Ankara should begin to gradually divest its financial assets from western institutions and consider the prospects of developing stronger bonds with the financial sector in Shanghai. Turkey has already expressed a keen interest in trading with countries as diverse as Russia, China and Iran in a combination of national currencies as opposed to the US Dollar, but so long as Turkey is even partly beholden to the western financial system, the US and some EU countries will continually try to meddle in Turkey’s sovereign affairs.
President Erdogan’s overt enthusiasm for China’s One Belt–One Road initiative has also raised eyebrows in the West, as has Turkey’s unflinching commitment to purchase Russia’s S-400 missile defence systems. In recent days, Erdogan even proposed working with Russia to jointly manufacture the forthcoming S-500 missile defence system in a move that would be a first for a major NATO member.
Erdogan has thus far demonstrated great skill at getting the most from partnerships on all sides of the wider geopolitical ‘east-west’ divide, but when it comes to finance and Turkey’s monetary stability, Ankara must develop the tools to leverage western currency speculators like George Soros as well as credit agencies with a clearly hostile agenda.
“God willing, we will conduct an operation against Moody’s after June 24. Moody’s is making unnecessary statements despite the fact that we are not a member of it. What a shame”.
In Turkey’s case, the best defence against western financial and monetary meddling is the good offence of weening Turkish trade off of US Dollar transactions, all the while working on new partnerships with financial institutions from China and other Asian nations, including Russia. Turkey’s destiny as an independent power is at stake. When western financial institutions declare war, one must respond with vigour.
Given Erdogan’s record of standing up to western bullying, it is likely that after the 24th of June, Turkey will have many economic and political surprises in store for its western detractors.