Between the search for “hot money” and the grip of luxury living

When comparing the monetary policies of “one nation and two states”, I wrote without hesitation that Azerbaijan is pursuing the right policy. Be it so, Azerbaijan gives little, as per capita national income is not transparent and the official amount is not accurate, it is also little. However, lessons were learned from two devaluation disasters at the beginning and end of 2015: even if the government gives little money, at least it does not kill its value or kill its value after giving it. If we have to describe the monetary policy pursued by Turkey since 2018 in one word, I personally cannot find another word than "chaos". We understand that many countries without natural resources have developed and are developing, and Turkey is one of them. But first of all, I am looking for a real expert from the AKP government to explain how the state develops and the economy grows without minimizing government spending.

This time, the guest of President Erdoğan, who has been trying to breathe a sigh of relief by re-establishing relations with the Gulf countries in recent months, was the Crown Prince of Saudi Arabia. We know the importance that the AKP government attaches to the maximum development of relations with the rich countries of the Gulf, especially Saudi Arabia. However, from welcoming Mohammed bin Salman, who was on a very short visit to Ankara, to seeing him off, we saw a very strange scene: While wondering why almost all members of the government lined up for the official welcoming ceremony, what should have been the name given to the fact that the head of state personally saw Mohammed bin Salman off the plane? Is Turkey's financial crisis really so great that the head of state thought of such sincerity as one of the ways to be provided with money? The scary side of things is not this but the fact that one Saudi official told the BBC that "from now on, the development of relations with Turkey will be completely under our control".

While international financial institutions have been reluctant to lend to Turkey, the failure to get money also in the Gulf has exacerbated the problem. Undoubtedly, Ankara is well aware of the reasons why Mohammed bin Salman, who went to Cairo before Ankara and gave $ 27 billion to Abdul Fattah al-Sisi, is denying money to Turkey, so we do not need to think about it.

At this stage, we are only interested in the answer to the question "Where and how much money will be found?" Because the government, struggling to find "hot money" from abroad, ran out of budget in the first half of the year and asked for an additional budget of about $ 50 billion for the second half. Since the vast majority of domestic financial resources are derived from taxes, in the second half of the year, I apologize, "there will be no goose except for citizens to unfeather". The government abandoned the policy of "tightening its belt" after 2007, and today there is no question of a return to that policy. Despite the fact that a significant part of taxes on rising prices in the first half of the year went to the daily expenditures of the state, the demand for a new budget for the second half of the year was unprecedented in the history of the Republic of Turkey (I remember that in the past, the budget was supplemented for the last two months of the year, so the citizens did not feel much because of the small amount). As the financial discipline has been completely eliminated, according to decisions made by the Central Bank or the Banking Systematization and Supervision Council eight to nine times a week and economists familiar with the functional mechanisms of the market, along with signs of a return to the 1970s, printing unbacked money by the Central Bank is becoming increasingly common. This will further increase inflationary pressure on the market. Based on my 30 years of writing experience in Turkey, I do not see any problem in characterizing these days as "scary days".

In the midst of economic problems, it was unclear what a new military operation on the other side of the border would bring. Apparently, the plan for a "new military operation against Syria" adopted by the National Security Council two months ago has also been postponed due to economic problems. Another reason for the inability to launch the operation is Russia's failure to deactivate S-400 missiles deployed in Syria. It is now clear that Foreign Minister Sergey Lavrov arrived in Ankara to convey this. It is strange: Russia, which is allegedly completely busy with Ukraine, can have Ankara step back from the next military operation against Syria by sending its foreign minister there.

One of the articles I wrote about the state of the Turkish economy in August 2011 was entitled "Cutting its coat according to its cloth." Yes, despite Turkey's steady deficit of about $ 50 billion in annual energy imports, which seeks to grow its economy without its natural resources, no one, from the country's rulers to ordinary citizens, wants to give up the love of luxury. Thus, the main factor in strengthening both the economy and the state should be the principle of "cutting its coat according to its cloth".

I read Margaret Thatcher's book “10 Downing Street” in 1994 in Turkish. In an attempt to prevent the Falkland Islands from seceding from Britain, the prime minister of the war-torn government wrote in her memoirs, “As soon as the war broke out, I gave up a servant at my residence, and my husband and I roasted meat in the microwave in the evening.”

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