The crisis in Turkey

Turkey is passing through a period of turbulence and is in a financial crisis

Editorial August 16, 2018

Turkey and Pakistan have long had good relations and there is nothing yet to suggest that has changed, but Turkey itself is passing through a period of turbulence and is in a financial crisis the gravity of which at least parallels that of Pakistan. It is having an ongoing diplomatic shouting match with the US that is fast becoming a sanctions war, and our nascent prime minister has now weighed in with his support for Turkey at this difficult time. He acknowledged the fiscal morass Turkey is mired in and echoed the Foreign Office in this respect.

Diplomatic niceties aside, the Turkish crisis has the potential to infect others around it and Pakistan needs to be careful. On Monday August 13 the Turkish central bank failed to halt the calamitous slide in the value of the lira and the newly-empowered executive president is struggling to contain the crisis. He is not as yet threatened directly, but his base is acquiring a fluidity that was absent six months ago. The lira is down 40 per cent against the dollar which in itself is a reflection of wider inflation and debt problems, none of which have appeared overnight and all of which point to a systemic failure at the heart of governance.

This instability has touched global markets, with lender banks now skittish to say nothing of the quivers in the geopolitical tectonics as Turkey sits between the US and Russia, that the Turkish PM has tried — unwisely — to play one off against another and signally failed. Also in the tight end of the Turkish funnel are Syria (via the Kurds), Iran, Nato and the EU states generally.

The optics are of a regional power faltering, its once rock solid and essentially neutral foreign and regional policies now fragmented, making dialogue with those it needs to be talking to, difficult in the extreme. None of this is going to impact Pakistan directly but caution has to be exercised by the incoming — and inexperienced — government in its first steps into the minefield of foreign policy and relations. The Turkish crisis will get worse before it gets better. Approach cautiously.

Published in The Express Tribune, August 16th, 2018.

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