The Crisis in Turkey

David Goldman, aka Spengler, tells us that we should keep a close watch on Turkey. Goldman was formerly a banker, so his analysis emphasizes the economic realities of that critically important nation. He has argued these points before and is less than sympathetic toward those who have gotten Turkey wrong:

As the Turkish lira collapsed to levels that threatened to bankrupt many Turkish companies, the country’s central bank raised interest rates, ignoring Erdogan’s longstanding pledge to keep interest rates low and his almost-daily denunciation of an “interest rate lobby” that sought to bring down the Turkish economy. Erdogan’s prestige was founded on Turkey’s supposed economic miracle.

Hailed as ”the next superpower” by John Feffer of the Institute for Policy Studies, and as “Europe’s BRIC” by The Economist, Turkey has become the Sick Man of the Middle East. It now appears as a stock character in the comic-opera of Third World economics: a corrupt dictatorship that bought popularity through debt accumulation and cronyism, and now is suffering the same kind of economic hangover that hit Latin America during the 1980s.

While our own president has been fawning over Erdogan, the New York Times follows Goldman and sounds a tocsin of alarm about the political situation in Turkey.

In an extensive, and excellent analysis of the situation in Turkey, Suzy Hansen describes Erdogan:

Over the last decade, Erdogan has made himself the most powerful prime minister in Turkey’s history, the most successful elected leader in the Middle East and the West’s great hope for the Muslim world. In the last year, however, a thoroughly different Erdogan has emerged: a symbol of authoritarianism, corruption and police brutality whose once-populist rhetoric has turned into thundering rage.

Hansen is anything but sanguine about Erdogan’s efforts to deal with his current political crisis:

Erdogan’s response to both threats has been to punish those he considers disloyal. Critics of Erdogan are called traitors or terrorists — or, more colorfully, assassins. Thousands of activists have been detained, their schools or workplaces investigated, their homes raided. Informal emergency medical care, common during street protests, has been criminalized. Some 5,000 police officers and prosecutors, who Erdogan claims are conspiring against him, have been dismissed from their jobs or reassigned. Internet sites have suddenly become inaccessible. The judiciary is in danger of falling under Erdogan’s control. The exchange rates for Turkey’s currency, the lira, have plunged significantly, and predictions for the economy are dire. The feeling in Turkey is that, all of a sudden, the country that was a model for the modern Muslim world is on the verge of disintegration.

Both Spengler and Hansen are telling us that the situation in Turkey is very, very dire. They approach it from different angles, but their observations and conclusions are essentially the same.

When it comes to Erdogan's economic management Goldman repeats observations that he has been making for some time now:

There is a world difference, though, between a prosperous paranoid and an impecunious one. Turkey cannot fund its enormous current borrowing needs without offering interest rates so high that they will pop the construction-and-consumer bubble that masqueraded for a Turkish economic miracle during the past few years.

The conspiracy of international bankers, Opus Dei and Illuminati that rages in Erdogan’s Anatolian imagination has triumphed, and the aggrieved prime minister will not go quietly. As Erdogan abhors old allies who in his imagined betrayed him and seeks new ones, the situation will get worse.

Unfortunately, the contagion is not being contained. Goldman writes:

One of the worst ideas that ever occurred to Western planners was the hope that Turkey would provide a pillar of stability in an otherwise chaotic region, a prosperous Muslim democracy that would set an example to anti-authoritarian movements. The opposite has occurred: Erdogan’s Turkey is not a source of stability but a spoiler allied to the most destructive and anti-Western forces in the region.

Relations between Turkey and the Gulf States are now in shambles. Saudi Arabia abhors the Muslim Brotherhood, which wants to replace the old Arab monarchies with Islamist regimes founded on modern totalitarian parties, while Erdogan embraced the Brotherhood. The Saudis are the main source of financial support for Egypt’s military government, while Ankara has denounced the military’s suppression of the Muslim Brotherhood.

Whether the Gulf States simply ran out of patience or resources to support Erdogan’s credit binge, or whether their displeasure at Turkey’s misbehavior persuaded them to withdraw support, is hard to discern. Both factors probably were at work. In either case, Erdogan’s rancor at Saudi Arabia has brought him closer to Teheran.

The crisis, he says, is already here. It needs deft and skillful management:

But disaster already has arrived. In some ways Turkey’s decline is more dangerous than the Syrian civil war, or the low-intensity civil conflict in Iraq or Egypt. Turkey held the North Atlantic Treaty Organization’s eastern flank for more than six decades, and all parties in the region – including Russia – counted on Turkey to help maintain regional stability. Turkey no longer contributes to crisis management. It is another crisis to be managed.

How well is the crack Obama-Kerry foreign policy team managing the crisis?

The best answer seems: not at all.

It is too busy trying to wring concessions out of Israel while paving the way for an Iranian bomb.