Turkish crisis deepens with economic woes

Nothing, at the moment, seems to stop bleeding of econo­my.

Turkish special force police officers patrol at the scene of a motor-bike bomb explosion, next to a police station, on October 6th, in Istanbul. (AFP)


2016/11/27 Issue: 83 Page: 15


The Arab Weekly
Yavuz Baydar



Paris - The Peri Tower Hotel is the latest to throw in the towel.

“By the end of No­vember, we will shut our doors to tourists,” said Nazif Demir, the manager of the hotel, which has been a landmark in Cappadocia in central Turkey since 1995.

“All we know is, 2017 will be even harder than this year,” he said.

The closure is one of the many in Turkey’s deeply troubled tourism sector, shattered since mid-2015.

Tourism Ministry figures indicate that the number of foreign visitors to Turkey dropped 31.9% to 20.2 million in the first nine months of the year compared to the same period in 2015. September marked the 14th consecutive monthly de­cline, with several terrorist attacks, a failed coup attempt and bilateral tensions with Russia seen as pri­mary culprits for the overall drop in tourism over the past few years.

“This a catastrophe,” said Meh­met Isler, the head of Turkish Ho­tel Owners Association, “and 2017 does look even worse.”

Istanbul, one of Turkey’s main magnets for foreign visitors, is vis­ibly shaken by big decreases in the number of tourists. As of the end of October, more than 600 shops, out of a total of 3,600, in the Grand Ba­zaar had shut down. Another 1,500 are at risk of going out of business, market insiders said.

The district of Pera looks deso­late. Even international chains such as McDonald’s and Starbucks chose to shut branches. The same is true in Nuruosmaniye, a traditional old town market usually buzzing with activity, and Baghdad Street, a posh strip on the Asian side of town. There are also reports of the mass closures of shops in Istanbul’s many modern shopping malls.

Antalya, usually a tourism hub, has seen a 60% decrease in the number of visitors in the past ten months. Local sources said revenue losses could be as high as $5 billion.

Because of the drop in tourists, 10% of the Turkish Airlines fleet has been frozen, indicating big losses.

The Turkish lira has been losing value at an increasing rate. It has been subjected to de facto devalua­tion by 24% since March 2015, 11.4% since April.

“It is on a razor’s edge,” wrote Seyfettin Gursel, an expert on the macro economy. “The Central Bank is inefficient. We should postpone our hopes for a low inflation indefi­nitely.”

The official jobless rate in Turkey is 11.4%. The percentage of people truly unemployed is likely much higher.

All this does not bode well for a country dragged into a profound political crisis and social instability.

Turkish President Recep Tayyip Erdogan’s relentless push for a re­gime change under the guise of introducing a presidential system that will equip him with enormous executive powers lies beneath the turmoil. Polarisation deepens as he forces the pace.

The measures he endorsed under emergency rule have had an intimi­dating effect on foreign investment and financial markets. These in­clude the arbitrary seizure of prop­erty and assets whose value could amount to $10 billion that belong to the Anatolian business circles accused of being tied to the Gulen movement, which the government accuses of being behind the failed July coup.

Erdogan’s denigrating rhetoric to­wards European leaders has made matters worse. That 75% of foreign investment to Turkey comes from the European Union is enough to explain the economic damage be­ing done.

”Continued degradation of the rule of law or, indeed, the possibil­ity of civil strife entails a potential disruption in the manufacturing ac­tivities of EU firms that have locat­ed major production sites in Turkey thanks to the EU-Turkey Customs Union,” wrote Marc Pierini, a for­mer diplomat and expert on Tur­key.

“‘The same goes for a host of major EU operators in the fields of retail trade, banking and insurance and energy.”

Nothing, at the moment, seems to stop the bleeding of the econo­my. “Within the last week, Central Bank’s currency and gold reserves decreased by $5.59 billion. In the past 4 months foreign currency ac­counts went down by $17.3 billion, wrote Ugur Gurses, a columnist with the daily Hurriyet. “Now [Cen­tral Bank] reserves are down on $ 117.5 billion, and this is the biggest loss since 2009.”

The one political figure who seems to understand the urgent need to resolve the economic and political crises is Deputy Prime Minister Mehmet Simsek. In a re­cent closed-door meeting with business people, he said: “Democ­racy matters a lot. A Turkey that is detached from the European Union will be perceived as a third world country.”

In a domain where nobody dares stand up to the president, it does not seem likely that Erdogan will pay attention. Such challenges in Turkey are seen as sufficient reason to get fired.


Yavuz Baydar is a journalist based in Istanbul. A founding member of the Platform for Independent Journalism (P24) and a news analyst, he won the European Press Prize in 2014. He has been reporting on Turkey and journalism issues since 1980.


As Printed
MENA Now
Editors' Picks

The Arab Weekly Newspaper reaches Western & Arabic audience that are influential as well as being affluent.

From Europe to the Middle East,and North America, The Arab Weekly talks to opinion formers and influential figures, providing insight and comment on national, international and regional news through the focus of Arabic countries and community.

Published by Al Arab Publishing House

Publisher and Group Executive Editor: Haitham El-Zobaidi, PhD

Editor-in-Chief: Oussama Romdhani

Deputy Editor-in-Chief: Dalal Saoud

Senior Editor: John Hendel

Chief Copy Editors: Jonathan Hemming and Richard Pretorius

Analysis Section Editor: Ed Blanche

Opinion Section Editor: Claude Salhani

East/West Section Editor: Mark Habeeb

Levant Section Editor: Jamal J. Halaby

Gulf Section Editor: Mohammed Alkhereiji

Society and Travel Sections Editor: Samar Kadi

Senior Correspondents:

Mahmud el-Shafey (London)

Lamine Ghanmi (Tunis)

Correspondents

Saad Guerraoui (Casablanca)

Dunia El-Zobeidi (London)

Roua Khlifi (Tunis)

Rasha Elass - Thomas Seibert (Washington)

Published by Al Arab Publishing House

Contact editor at:editor@thearabweekly.com

Subscription & Advertising: Ads@alarab.co.uk

Tel 020 3667 7249

Mohamed Al Mufti

Marketing & Advertising Manager

Tel (Main) +44 20 6702 3999

Direct: +44 20 8742 9262

www.alarab.co.uk

Al Arab Publishing House

Kensington Centre

66 Hammersmith Road

London W14 8UD, UK

Tel: (+44) 20 7602 3999

Fax: (+44) 20 7602 8778

Follow Us
© The Arab Weekly, All rights reserved