A report by New Economy found that “Turkey had significant foreign exchange outflows” because of Turkish President Recep Tayyip Erdoğan’s costly wars. The report also found that “Turkey’s probability of bankruptcy is extremely high,” along with its three big banks of Garanti, Akbank and the Mustafa Kemal Atatürk-founded İşbank. “The country’s commercial banks, its last stronghold, have dried up from foreign exchange currency,” meaning that Turkey has nearly no money for its import and export companies.
Daily air violations of Greek airspace, the continued occupation of northern Cyprus, a failed invasion of Idlib province and continued financing of terrorist organizations in Syria, funding of Muslim Brotherhood in Libya, and overseas military bases in Africa, the Balkans and the Middle East, has all tallied up against the Turkish economy.
Turkey’s Ahval wrote that “there is no money in the treasury. Everyone knows why, but we are not supposed to talk about it. Today it is hard to speak openly about military spending in Turkey. It is also hard to even access information about Turkey’s war expenditure.” However, we can get some insights. A Stockholm International Peace Research Institute released their latest report on global military spending and found that between 2009 and 2019, Turkish military expenditure increased by 27%.
On Thursday, the same day the Turkish lira fell to new all-time low of 7.26 against the U.S. dollar, Turkey’s ruling Justice and Development Party Deputy Chairman Numan Kurtulmuş blamed his country’s economic woes because it is “under global attack.” This was mostly an outburst to distract the fact that his country has an out of control military spending.
Although Turkey is attempting to secure money from the U.S., Washington is unwilling to assist Turkey believing it is too high risk. Although Turkey has improved relations with Russia, Moscow could offer a few billion dollars, but this would be nowhere near enough to make a meaningful impact on the downturn.
So what are Turkey’s options?
The International Monetary Fund, which Turkey has already ruled out.
China, which Ankara is continually criticizing for alleged human rights abuses against the Turkic Uighur minority in Xinjiang province.
The European Union, which Turkey can always count on long-time ally Germany but faces a resistance from other states.
Turkish Foreign Minister Mevlüt Çavuşoğlu on Saturday called for deeper bonds to be forged between the EU and Turkey, saying that his country “is open to all sincere and meaningful cooperation for our common future” and “we expect the EU to adopt a rational policy that goes beyond the narrow national perspectives of Member States and reflects the Union’s global responsibilities, as well as the EU’s motto of ‘unity in diversity’.”
It now appears that Turkey is so desperate for economic relief that it is turning to the EU for assistance, even after it attempted to flood EU-member Greece with illegal immigrants in February and March, and some weeks ago Turkish soldiers shot at EU border protectors. Negotiations with the EU are likely to reach a standstill as Turkey still occupies a part of EU-member Cyprus, restricted French bank PRB Paribas from FX transactions, violates Greek airspace on a daily basis, and continues to threaten the flooding of the EU with illegal immigrants. Although Turkey will surely receive support from long-time ally Germany, it is likely to hit a roadblock with many other EU members.
In speaking with Dr Konstantinos Vergos from the Portsmouth Business School at the University of Portsmouth, he explained that “Erdoğan set a 5% GDP growth target for 2020 and that it is unlikely Turkey will have anything less than a 6% drop in GDP.”
Although Erdoğan is adamant that he does not want assistance from the International Monetary Fund, according to Vergos, if Turkey “already has 10% deficit, this is going to increase the probabilities of knocking on the Fund’s door by September.” He urged that Turkey “should decrease any non-necessary expenses, such as excess military expenditure and to focus on the big issues, like the coronavirus.”
It is unlikely that Turkey will subside its militarism as it does not want to take a step back from achieving total regional hegemony, no matter the extreme cost to the Turkish economy.
Devlet Bahçeli, the leader of Turkey’s Nationalist Movement Party (MHP) and a close ally of Erdoğan, said on November 29, 2019 that “only one hour of gasoline for an F-16 [war jet] costs $14,000.” Turkey in 2019 alone violated Greek airspace 4,811 times, meaning that up to $60 million could have been spent on penetrating Greek airspace with war jets. This does not include F-16 and naval violations in Cyprus, occupying northern Cyprus, airstrikes in Iraq and Syria, funding jihadists in Libya and Syria, continuing its domestic war against the Kurds, maintaining military bases in the Balkans, Africa and the Middle East, buying the Russian S-400 missile defense system, and many other military related endeavours.
As much as Turkey may want to blame a “global attack” for its economic problems, it is for domestic consumption that aims to distract the Turkish people that its leadership’s war machine has a huge role in the weakening of the lira. Although Turkey is now opening up to the EU in the hope of having some financial pressure released, the EU will hardly assist Turkey so long as it continues to pressurise Greece and Cyprus. It is unlikely the U.S. will help unless Turkey ends its S-400 plans, something it will not do, too. Without foreign assistance and unwilling to end its military campaigns, it now appears that Turkey’s only hope can be the International Monetary Fund that it is desperately trying to avoid being trapped in.
By Paul Antonopoulos