Erdogan should leave office

Given the state of Turkey’s economy today, it is easy to forget that it was once an attractive option for those interested in emerging markets. But 17 years of Erdogan’s mismanagement has sent foreign money fleeing. 

Denying any connection between his government’s policy and Turkey’s economic collapse, the president’s rudimentary understanding of basic economic principles has bordered on the absurd.

The road to getting the Turkish economy back on track will indeed be a long one, requiring coherent economic policy not driven by the conspiratorial finger pointing and power politics of the last few years. 

It will also require a government that reins in its foreign policy adventurism, and particularly its aggression in the Eastern Mediterranean, which has severely tarnished Turkey’s relations with its largest trading partner, the European Union. As a consequence of Turkish violations of its obligations under the EU-Turkish customs union, trade has been significantly reduced.

Turkish foreign policy decisions have similarly created widespread reluctance to invest money in the Turkish market; a recent Santander investment report warned of “proximity to/exposure to conflicts in Syria and Iraq which enhance the security risk” alongside “increasing unrest and political conflict.” 

Only significant and concrete changes will restore investors’ confidence in the country’s ability to resolve its severe fiscal deficit and bring back the foreign direct investment the country needs.

Whatever course correction Erdogan has in store now, in all likelihood, it won’t reflect Turkey’s actual needs. In general, free markets simply don’t coexist with the authoritarian tendencies Erdogan’s policies have time and time again exhibited: economic manipulation; wide scale jailing of journalists critical to Erdogan’s policies; and the purging of so-called dissenters from the civil service, academia, and the justice system. 

A country cannot be on the path to real reform as long as the independence of its institutions is undermined by cronyism, its population hoards its savings in foreign currency out of fear of the lira losing its value overnight, and external debt stands at over 50 percent of GDP.