Turkish economy on a Tailspin

Erdoğan recently blamed the president of the Central Bank for the failure since he had been requested to lower the interest rates at no avail

Turkish economy on a Tailspin

Turkey and its president Erdoğan are struggling to get some traction to the economy, however it is not working.

Erdoğan recently blamed the president of the Central Bank for the failure since he had been requested to lower the interest rates at no avail. Although lowering interest rates does not lower the inflation as Erdoğan expects, since he is the president and rules by personal dictates he also expected the CB president to obey his orders immediately. When the interest rates were not brought down, the CB president was replaced by the assistant president of the bank.

The personal dictate of Erdoğan on the economy reminds us the strange discussion in the National Assembly few years back when a government deputy had shown his frustration on inflation saying, “Why is this inflation thing such a big issue? Let’s pass a law and ban it and the issue will be solved.”

The high inflation and the drop of Turkish Lira against the dollar still bogs the economic system in Turkey as mostly the small businesses and the workers suffer from the crisis. The minister of economy is Erdoğan’s son-in-law who is seen as a total failure and incompetent figure brought to his post by the widespread nepotism in the country.

According to the Confederation of Turkish Tradesman and Craftsman, more than 53,400 small businesses shuttered their shops in the last 6 months of this year alone. This is more than 400 new bankruptcies compared to the last period.

The changing of the Central Bank president does not seem to have helped the AKP government. As soon as he was brought to head the Central Bank, the new president’s previous scandalous plagiarism was reported. The new president had cheated on his post graduate thesis where he had copied-and-pasted word by word from well-known economics books and other economists’ papers. However, this embarrassing past did not make any waves in media or in the Central Bank circles. Thus, his economic skills of the new president is in question. However, as long as he obeys the orders from above economy may not recover but his seat will be guaranteed.

In the first half of the year, the application for new businesses went down.

The amount of debt the businesses were under continued to skyrocket as assets lost due to bankruptcies increased 91%.

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