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Turkey’s Crumbling Domestic and Foreign Policies Risk Downward Economic Spiral

A few months after Ankara violently put down a wave of anti-government protests, Turkey now risks entering a downward spiral where political authoritarianism fuels economic instability, and economic instability fuels more political protests that are put down through authoritarian measures.

Observers had already worried over the summer that the government crackdown – initiated and pressed by the government of Turkish Prime Minister Recep Tayyip Erdogan – would undermine efforts [1] to put Turkey’s economy on firm footing. Security officials went so far as to target unions [2] allegedly linked to anti-government protests. By September the Wall Street Journal was publishing [3] articles with headlines like “Turkey’s Once-Golden Economy Buffeted from All Sides.”

If Erdogan’s domestic policies have set in motion a somewhat complicated feedback loop that’s damaging the economy, the economic impacts of his foreign policy have been more straightforward. Turkey – along with the Muslim Brotherhood and to a great extent Qatar – had gambled on the rise of political Islam throughout the region, and had aligned itself accordingly.

The decline of the Brotherhood in Egypt left Erdogan [4] “raging on a daily basis,” according to Georgetown-based Turkey expert Michael Koplow. His vitriol against Egypt ended up triggering economic retaliation, [5] and more broadly his alignment against U.S. allies who backed the army cost Turkey [6] precious import markets in the Gulf.

Now Turkey’s even losing the ability to export soap operas, [7] to say nothing of an array of other goods:

“I was addicted to Turkish television series and was so emotionally involved with the characters, the scenes and the culture that I wouldn’t miss a single episode,” Said, 31, said in a central Cairo salon where she works as a hair stylist. “Now, I just hate everything related to Turkey.”…

Turkish goods shipped through Egyptian ports dropped as much as 30 percent after Mursi’s ouster, according to data from OSF International Logistics Services, a transport company in Turkey. Egypt’s Trade and Industry Ministry is threatening anti-dumping duties on Turkish steel imports. Cairo-based Oriental Weavers this month said it was canceling a carpet production project in Turkey that might eventually have meant an investment of as much as $250 million…

Elhamy El-Zayat, head of the Egyptian Tourism Federation, said Egyptians are now avoiding Turkey, which used to be one of their favorite foreign destinations. “Occupancy rates for flights heading to Istanbul have fallen,” he said. At least four Egyptian television channels have halted broadcasts of Turkish soaps since Mursi’s removal, among them Al-Kahera Wal Nas, whose owner Tarek Nour, says the message is political rather than cultural.

[Photo: JewishNewsOne / YouTube [8]]