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Spengler

The End of Erdogan’s Cave of Wonders: An I-Told-You-So

December 27th, 2013 - 2:09 am

Turkey is coming apart. The Islamist coalition that crushed the secular military and political establishment–between Tayip Erdogan’s ruling AK Party and the Islamist movement around Fethullah Gulen–has cracked. The Gulenists, who predominate in the security forces, have arrested the sons of top government ministers for helping Iran to launder money and circumvent sanctions, and ten members of Erdogan’s cabinet have resigned. Turkey’s currency is in free fall, and that’s just the beginning of the country’s troubles: about two-fifths of corporate debt is in foreign currencies, so the cost of servicing it jumps whenever the Turkish lira declines. Turkish stocks have crashed (and were down another 5% in dollar terms in early trading Friday). As the charts below illustrate, so much for Turkey’s miracle economy.

Two years ago I predicted a Turkish economic crash. Erdogan’s much-vaunted economic miracle stemmed mainly from vast credit expansion to fuel an import boom, leaving the country with a current account deficit of 7 % of GDP (about the same as Greece before it went bankrupt) and a mushrooming pile of short-term foreign debt. The Gulf states kept financing Erdogan’s import bill, evidently because they wanted to keep a Sunni power in business as a counterweight to Iran; perhaps they have tired of Turkey’s double-dealing with the Persians. And credulous investors kept piling into Turkish stocks.

I reiterated my warning that Turkey would unravel at regular intervals, for example here.

No more. Turkey is a mediocre economy at best with a poorly educated workforce, no high-tech capacity, and shrinking markets in depressed Europe and the unstable Arab world. Its future might well be as an economic tributary of China, as the “New Silk Road” extends high-speed rail lines to the Bosporus.

For the past ten years we have heard ad nauseum about the “Turkish model” of “Muslim democracy.” The George W. Bush administration courted Erdogan even before he became prime minister, and Obama went out of his way to make Erdogan his principal pal in foreign policy. I have been ridiculing this notion for years, for example in this 2010 essay for Tablet.

The whole notion was flawed from top to bottom. Turkey was not in line to become an economic power of any kind: it lacked the people and skills to do anything better than medium-tech manufacturing. Its Islamists never were democrats. Worst of all, its demographics are as bad as Europe’s. Ethnic Turks have a fertility rate close to 1.5 children per family, while the Kurdish minority is having 4 children per family. Within a generation half of Turkey’s young men will come from families where Kurdish is the first language.

Chart forUSD/TRY (TRY=X)

Chart foriShares MSCI Turkey (TUR)

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Top Rated Comments   
Greetings:

Once again, Fouad Ajami's observation that those are the lands of "I against my brother; my brother and I against our cousin; and my cousin, my brother, and I against the stranger." is more than adequately proved.

Islam is the millstone. If your plan doesn't include constraining, undermining or eradication Islam, you don't have a plan. What you have is a hope.
16 weeks ago
16 weeks ago Link To Comment
"Iraq came apart because of US invasion, US sanctions, and then another US invasion."

In your world, Saddam Hussein and the Iraqis are little more than puppets. They're human; they made more than their share of mistakes in that time.

"Syria went up in flames because..."

Because they people are sick of a dictatorship? No? They're puppets, too?

You're a bigot, "Gubbler". A nasty, racist bigot.
16 weeks ago
16 weeks ago Link To Comment
The problem with the Middle East has long been clear to all but the most obtuse: the Islamic world is vastly inferior. Ignorance, corruption, bigotry, misogyny, tribalism, militarism are Islam's wages. What would one expect from a 'religion' whose creator kept changing the book to suit his murderous, pedophile whims? Pity poor Israel, for they will be in the fall-out shadow no matter which way the winds blow.
16 weeks ago
16 weeks ago Link To Comment
All Comments   (107)
All Comments   (107)
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14 weeks ago
14 weeks ago Link To Comment
Here's an Iranian article that speculates on the boom in american oil production.
http://iranian.com/posts/view/post/26405/jumpto/idcomment-42499

key take away:

"Over the long run the easing of sanctions against Iran spells trouble for the economics of the tight oil plays that have sprung up across the United States in recent years. The Eagle Ford and Permian Basin and Bakken fields need sustained high oil prices to make the economics of expensive drilling and steep decline rates pay off." ..................

This next quote is the money quote: ./..............

"The U.S. onshore oil industry has been perhaps the brightest spot in America’s economic recovery. How ironic then that America's recovery might end up being a casualty of the Middle Eastern peace making processes. Which brings me to my final point, obviously the U.S. will NOT jeopardize its recover (and therefore prosperity) by accelerating Middle Easter peace. I hate to say it, but there is obviously something huge a foot. There has to be a plan in someone's back pocket." ...............

what the Iranian writer doesn't get is that Obama administration is profoundly anti american and anti oil. Anything that can kill oil and kill american industry...the obama administration will do. Well, I'm probably overstating the Obama admin's problem. Really the problem is that the Obama people don't really care all that much about the USA and especially not the oil industry--except to the extent that it makes them look good--but even when the oil industry makes them look good--the obama people just don't care. they presume all miracles.
14 weeks ago
14 weeks ago Link To Comment
I don't know. It appears that Obama's embrace appears to be the kiss of death for the Muslim Brotherhood. The more Obama supports the MB the harder the Egyptians crack down on the Muslim Brotherhood.

The really humorous thing about this....and there is something really old testament humorous about this....the MB was founded by anti colonials. & obama himself is an anti colonial east africa kenya anti british mau mau style. or anyway he picked up a bit of that style The problem is that Obama and the MB are completely out of context. They are ideologically throw backs to another age in this regards. What they think they should look like to the Egyptians and what they actually look like are two very different animals.
Obama, while he may think he's anti colonial--cannot seem to comprehend that he's president of the USA. The MB who spent most of a century making a virtue of envy--when once in power --became worse than all the dictators they ever envied. They were a suffocation. Now out of power -- Obama's presence at the MB's side puts the lie to their piety claims.

All that said, the marginalization of the Muslim Brotherhood in Egypt is a huge victory for the US war on terror (why? because the MB was a breeding ground for AQ) and a significant blow against Hamas (which would seem to benefit Israel.)

How long will this state of affairs last? Sheesh. Who knows. Nor am I sure I really care much either.
15 weeks ago
15 weeks ago Link To Comment
For those who don't get the connection between Obama and the Muslim Brotherhood--its helpful to remember that in American and European demonstrations after the invasion of Iraq--there were communists and jihadists with their different banners marching side by side. Anyone looking on would ask since when do kangaroos lay down with deer. Since when do tigers lay down with lions. they are very different animals from different continents. What do lions and tigers have in common? Well both lions and tigers are meat eaters. What do deer and kangaroos have in common? Both deer and kangaroos are grass eaters. what do communists and jihadists have in commen? The answer is they both believe that men are so totally corrupt and incompetent-- that they cannot be self governing. They require the big man the king to rule and crack the whip. They are authoritarians. Obama comes from the communists. The Muslim Brotherhood was the breeding ground for the Jihadists. The people who were demonstrating in 2004 got into power in 2008 in the USA and in Egypt briefly in 2012. Look for the authoritarian/totalitarian/statists in the USA to keep pushing the envelope as they did in Egypt.
14 weeks ago
14 weeks ago Link To Comment
I am happy to say I saw it coming and it couldn't happen to better people. Islam is their problem and the harder they pray the blinder they become. Good. The satanic cult has a 1,400 year history to look back on and they still fail to see the con-job that Mohamed laid on them.
15 weeks ago
15 weeks ago Link To Comment
I am optimistic about Turkey's future. Hopefully the military will eject Erdogen as per their constitutional duty soon, so that the Turks can recover from their recent tragedy with Islam.

Just as I am more optimistic about Egypt than I have ever been. With the recent classification of the Muslim Brotherhood as a terrorist organization, and the arrest of almost all of its top leadership, and an outright ban on most of their activities, Egypt's prospects seem pretty bright.

16 weeks ago
16 weeks ago Link To Comment
As long as the Kurds are Muslim expect nothing much from them in the long run.
16 weeks ago
16 weeks ago Link To Comment
The problem with islam is that there are too many islamists. The weak "leaders" that managed to get elected in the west are constantly saying we are not at war with islam. Well, here is a news flash, they are at war with us.
16 weeks ago
16 weeks ago Link To Comment
The military will take over in Turkey in another year or two just like they did in Egypt.
16 weeks ago
16 weeks ago Link To Comment
This is why money is invested in getting oil out of oil sands in Canada or the ocean off Brazil instead of investing in technically easier oil production upgrades in the Middle East. It's easier to get things done on frozen tundra or at the bottom of the ocean than it is to deal with certain backward cultures.
16 weeks ago
16 weeks ago Link To Comment
There actually is a possibility of a Muslim Democracy, only it would require the carving of a new Kurdish state, out of portions of Iraq, Iran, Syria, and Turkey.
16 weeks ago
16 weeks ago Link To Comment
Islam needs to undergo a reformation similar to what Christianity underwent with Martin Luther before Islam has a prayer of becoming fit for modernity.
15 weeks ago
15 weeks ago Link To Comment
You can't reform something that was a lie at its conception.
15 weeks ago
15 weeks ago Link To Comment
Islam is a believe it or die religion.Turkey is already 99% muslim with 72% Sunni.They will win any eventual election with the Shia shut out as in most islamic countries. With sharia in the wings the future for Turkey is straight downward.
16 weeks ago
16 weeks ago Link To Comment
there is no possibility of a "muslim democracy" as that is a complete oxymoron. islam preaches theocracy for "government", and only theocracy.
16 weeks ago
16 weeks ago Link To Comment
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