Who is Uğur Gürses?
He graduated from Ankara University, Department of Economics at Faculty of Political Sciences in 1985. He started his professional career at Central Bank of the Republic of Turkey at Foreign Exchange Transactions Division in 1986. He worked at various divisions on reserve management, foreign exchange transactions and open market operations. Uğur Gürses moved to private sector in 1994. He worked for banks as executive manager. His main responsibility was on treasury activities. After leaving banking sector in September 2000, Gürses started to make TV programs on business and financial markets at CNN TÜRK. Gürses had been regularly writing articles on business and economics for Radikal Daily between 2001-2014 and Hürriyet Daily between May 2014-July 2018. After July 2018, Gürses started to share his views at his personel blog, “Ekonomi Alla Turca” – www.ugurses.net
Can the forex loss in Turkey be recovered without sending the bill to the public? If first signs of the establishment of political normalization, democratization and rule of law emerge in a powerful way in Turkey, then the “shrunken” foreign currencies will come back to the system.
If the ruling Justice and Development Party (AKP) sees an increase in erosion of their votes and the increased possibility of losing power in a possible election then it would "use all the ammunition till it is finished" for their own political continuity. But this would indeed mean leaving a “gigantic wreckage” for the citizens of the country.
The trend in that started just before the presidential elections in 2018 and accelerated after the elections changed the chemistry of the economy in Turkey. Private sector in Turkey was restricted in every aspect. From pricing to sourcing, to investment licenses, all regulatory higher bodies worked to make the entrepreneurs feel that ‘the party state’ was watching them at every step.
A currency, that is losing value and is not the good money to its own citizens, cannot be the good money of another country. Most probably those who declared they have switched to the Turkish Lira in Syria will be doing their payments in Turkish Liras and - even if it may be only a few pennies - they will keep dollars to store the value of their accumulation.
No matter how long or short the COVID-19 crisis lasts, a broad range of working masses, but especially the unskilled labor force will be the ones exceedingly affected. They will lose income and their jobs. As a result, inequality will spread on a mass scale and poverty will soar.
Ankara thinks it can obtain stability through the sale of foreign currency from the “back door,” which erodes reserves. Ankara has also resorted to bans and restrictions on foreign currency, but these are actually very old tools from the 70s.
The economy management in Ankara may have this thought of stopping the devaluation of the Turkish Lira by wounding the lira’s convertibility but actually it also damages the debt capacity of the Treasury.
What would we have included if we wanted to write a guideline for those who have the wish to intervene in foreign exchange rates but who do not have the adequate experience, but at the same time want to do it right? Taking into consideration today’s circumstances in Turkey, here is a list.
In those countries where it is presented as they have a “floating exchange rate regime,” if their central banks are intervening at the exchange rate, the name of this in economy literature is “fear of floating.”
Since the COVID-19 crisis erupted, Turkish Central Bank’s reserves fell nearly 20 billion dollars. Now, the thought of “Can there be a swap line opened from the U.S. Central Bank Fedreserve ?” is in question.
Turkey was caught with the coronavirus outbreak at a time when it was weak structurally. Just like in the COVID-19 epidemic, the underlying disease story is the story of those problems in economy which were “swept under the carpet” for a long time. Turkish government's economy policies after 2018 were based on bans, limitations and covering up of the symptoms rather than resorting to necessary steps to solve the problems.
Ali Babacan's unfulfilled desire, the “fiscal rule” theme features in the program of the newly established Democracy and Progress Party’s (DEVA) . Babacan had made preparations to start the practice of fiscal rule in 2010, until Prime Minister Erdoğan shelved this.
Even though its name is “floating exchange rate regime,” the current one in Turkey can only be called “commanded foreign exchange regime.” Some may object to that and suggest “managed floating rate regime.” If it was the latter, then the Central Bank would have openly done it. Everybody would have been informed of a rate regime which has targets, a framework and a system. But we do not know anything about this “dystopian regime.”
Talking about Turkey’s economy is like a stand-up show. Turkey’s Central Bank is as independent as the Fed, says the Finance Minister. This comparison can be uttered because of the mood created in Ankara where the government commands the economy. But even in regimes of command economic, there is interdict and logic.
Politicians may have an inclination to regard the Central Bank as a “cow of the government to be milked.” But it is logic blowing that those who have undertaken CB jobs have rolled up their sleeves and personally worked for that.
In the last two years, the economic policy team governing in Ankara that has been intervening on prices, interest and exchange rates with an iron fist has cost banking executives their jobs for making their own trade decisions in an open market. Turkey is supposedly an open market economy, but Ankara has been nudging market players under the table to the point that the market is “open” only in theory.
Both the consumption and investment data in the third quarter show a tendency toward “exhausted growth” in the private sector. I wrote at the end of October that this is the picture of weak, anemic growth. The economy is out of energy. With the economy in this weak and feeble state, Ankara cannot carry the country politically to 2023.
The "orchestrated" issue on the agenda last week was an effort to form public opinion about punishing comments on economy by jail sentences and monetary fines. Stories in newspapers were followed by a speech by Economy Minister Berat Albayrak the next day, who wanted to lay "thought infrastructure" for this.
Russia's strategy is quite clever; it continues to accumulate reserves by using dollar and euro for its exports while using ruble for one third of imports. By receiving 7-8 percent of its net foreign trade in ruble, it creates demand for its currency at the same time.More so, Russia is trying to recruit Turkey as a customer for its Russian made SWIFT alternative SPFS and again homemade credit card system MIR.
The three-way wheel of the Turkish economy, which depended on the flow of foreign capital, domestic credit growth, and household consumption, has stopped. It seems like the politicians running the country in Ankara couldn't find the answer to "What awaits the Turkish economy in 2020?"—since they undertook a military operation in Syria to get back the votes they lost due to the economic crisis.
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Duvar English’s editor-in-chief Cansu Çamlıbel and pollster Can Selçuki are joined by Robert Bosch Academy's Galip Dalay to discuss the impact of Turkish government's recent domestic policy moves on Ankara's international relations. They look for answers to whether there is any possibility that Turkey's relations with the West might change for the better any time soon.
Taner Akçam writes: The regime’s bold stroke vis-a-vis Hagia Sophia should not be seen as stemming from desperation. Rather, it is simply meant to relay the not-so-subtle message of the path to be followed by the "New Republic", and that message is that the “annihilationist tradition” of the old regime, inherited by the Republic’s founders, will be retained in the era to come.
A pro-government women's rights organization has voiced support to the Istanbul Convention, which aims to combat violence against women and from which the Turkish government seeks to withdraw. In its statement, KADEM responded to widely-known false facts about the convention, especially on it including "LGBT propaganda," saying that it doesn't promote homosexuality.
As a result of global market dynamics gold prices in Turkey have also reached record highs, as a gram of gold currently costs 437 TL. Due to escalating prices, the sale of imitation gold known as 'Syrian gold', has become popular in the jewelry markets of Hatay.
Lake Salda, dubbed Turkey's Maldives, will help NASA scientists guide the search for ancient life on Mars, as it shares many similarities with a dried-up lake bed on the red planet. Lake Salda is the only known lake on Earth that contains the carbonates and depositional features (deltas) similar to those found at Jezero Crater on Mars.
Algerian President Abdelmadjid Tebboune phoned Turkish President Recep Tayyip Erdoğan in July to secure the return of a fugitive military official, Reuters reported on Aug. 2, citing an unnamed top Algerian security source. Guermit Bounouira, a top aide to the late army chief Ahmed Gaed Salah, is accused of leaking a chart showing movements of army officers including their names and codes, the source said.
Nilüfer Bulut writes: Forced Islamization was one of the methods of survival during what Armenians call “Medz Yeghern,” the great catastrophe. Professor Zerrin Kurtoğlu Şahin says that by complying with the imposition of Islamization, these Armenians (mostly women and children) were assured their biological existence, but their cultural and social connections were ripped away.
Six Syrian students living in the southern province of Hatay were the victims of a racist attack, leaving two in critical condition. “I lost nearly all of the male children in my family in the Syrian civil war. We didn't come to Turkey for my brother to be the victim of a racist attack,” said Dua Muhammet, the older sister of one of the boys.
Thousands of Muslim worshipers gathered at Hagia Sophia on July 31 morning to attend Eid al-Adha prayers for the first time since the iconic building's conversion into a mosque. Blue Mosque, which sits just across the Hagia Sophia, however got no attention at all, despite being packed during the Eid al-Adha prayers in previous years.
Hale Gönültaş reports: A Yazidi woman who has been in captivity since 2014 was rescued from a home in Ankara. Abducted by an ISIS member in Iraq, the young woman was trafficked, eventually being tracked down by a family member.
Turkey's ruling AKP is preparing to file a lawsuit against Islamist columnist Abdurrahman Dilipak who called supporters of the Istanbul Convention as "prostitutes" in his column named "AKP's daisies."
Some 1,153 people spent the first day of Eid al-Adha at the emergency wards of Istanbul hospitals after cutting themselves or suffering other injuries while sacrificing agitated sheep and other animals. Seven of these “amateur butchers" were heavily injured and were operated on, Anadolu Agency said.
A group of Greek Orthodox Istanbulites who live abroad slammed a video by the Presidential Communications Directorate that depicted minorities in Turkey living in comfort. The minority noted that the government hadn't taken any steps to permit their return to their ancestral hometown of Istanbul, where they were forced to leave because of political turmoil.
A women's organization rooting for the Istanbul Convention will be holding a rally August 5 to protest consideration by the ruling Justice and Development Party (AKP) to recuse from the international treaty against domestic violence and discrimination.
Irish energy giant Eaton Corporation said that they ended their working relationship with Turkish distributor Berg Elektrik upon news that the latter's general manager Alp Erkin had shot and killed their neighbor's dog. While Erkin claimed he killed Nero because the dog bit his wife, Nero's owner noted that the animal was trying to protect its keeper.
Transport and Infrastructure Minister Adil Karaismailoğlu said that more than 200,000 passengers arrived in Turkey during the month of June, when Turkish Airlines recommenced international flights. The minister failed to answer a question about layoffs within the country's flagship carrier.
U.S. Secretary of State Mike Pompeo said on July 30 the United States was continuing to evaluate how it would respond to Turkey's purchase of Russian S-400 missile defense systems. "We continue to evaluate how to apply sanctions in order to achieve our end objective," Pompeo said.
A group of seven-eight unidentified Turkish citizens on July 26 battered six Syrian children under the age of 18 in Hatay's Kırıkhan district. The local governor's office on July 30 announced that an investigation was launched into the incident and two of the children are receiving treatment at hospital.
An Ankara court has reversed a ban on a gay pride march that was imposed by ODTÜ rectorate in May 2019. The court said that the rectorate's decision had no legal basis as the all-embracing ban enacted by the Ankara Governor's Office in 2017 had been already lifted.
Students enrolled in the Kurdish language departments of universities in Turkey will no longer be allowed to submit their dissertations in Kurdish. Former academic Selim Temo has also announced that from now on, all lectures at these departments will be conducted only in Turkish.
The area in the Hagia Sophia where emperors used to be coronated was left exposed when carpeting was installed in the structure to prepare it for Muslim prayer, Istanbul Culture and Tourism Director Coşkun Yılmaz said. The former museum was opened to Muslim worship on July 24, holding the first mass prayer in decades.
Dozens of celebrities all over the world, including Ellie Goulding, Christina Aguilera, Milla Jovovich and many more, have posted black and white pictures of themselves to voice solidarity with victims of femicides in Turkey. The trend began after women in Turkey said that they don't want to see their pictures in black and white in newspapers after they are killed.
U.S. Ambassador to Turkey David Satterfield and his family visited Hagia Sophia to see the restoration works carried out at the site after its conversion into a mosque. "Ambassador Satterfield toured Hagia Sophia to admire its grandeur and technical genius, and better understand the renovation and restoration work to be completed to preserve the universal value of and continued access to this monumental building," the embassy said on July 30.
The Turkish Lira has devalued drastically against the dollar, reaching almost seven liras on the dollar. Ankara has invested almost $60 billion in currency interventions in 2020 to no avail, Financial Times reported on July 28.
U.S. Secretary of State Mike Pompeo said on July 15 that companies involved in construction of the TurkStream pipeline will be subject to the U.S. penalties unless they stop their works. “It’s a clear warning to companies. Aiding and abetting Russia’s malign influence projects will not be tolerated. Get out now or risk the consequences,” he said.
The Turkish Petroleum Refineries Corporation (TÜPRAŞ) ranked as Turkey's largest industrial business with 87.9 billion liras in annual production revenue. The oil company was followed mostly by automotive producers.
On the second anniversary of Turkey's transformation into a presidential system, the main opposition Republican People's Party (CHP) has prepared a report detailing how the country stands in the ensuing years, finding that the Turkish lira has lost four times its value since 2007.
Urban Beat
Mois Gabay writes: Do you think the Camondo family will be included in the Beyoğlu Culture Road project conducted by the Ministry of Culture and Tourism? What about Arif Ergin’s “Tekvin” novel, in which he imagined that there would be a “Camondo Museum” one day?
Artifacts from Istanbul's ancient Hagia Sophia will be displayed in a nearby public building that will be transformed into a museum. Formerly used as a land office, the late-19th-century building in historical Sultanahmet will be converted on the president's orders.
Luke Frostick writes: Edanur Kuntman’s Tales from Behind the Window has been nominated for an Eisner Award. If she wins, she will be the first Turk to win an Eisner. The story is a piece of creative-nonfiction and its main narrative is drawn from the memories of Kuntman’s grandmother growing up in the Çarşamba district of Samsun.