TURKEY - Lira Loses 45% in One Year

Arno Froese

The two-decade economic boom that lifted millions of Turks into the middle class is beginning to unravel, threatened by a currency crisis that has people lining up for subsidized bread, cutting back on meat and fleeing for a better life in Europe.

The Turkish lira has lost as much as 45% of its value [in 2021], making ordinary Turks poorer. The pandemic-era consumer-price increases that have plagued economies across the world are supersize in Turkey, where inflation stands at more than 21%. People here are rushing to trade their shrinking wages for dollars and gold, are eating out less and are having more trouble finding imported goods, including medicine.

Mr. Erdogan and other Turkish officials have insisted that the fluctuations in the lira are temporary and are part of a longer-term strategy to encourage exports and transform the Turkish economy to one focused on productive industry. 

Earlier in his political career, Mr. Erdogan helped make Turkey’s economy one of the fastest-growing in the world and vastly expanded the country’s middle class. As mayor of Istanbul in the 1990s, he brought running water and garbage collection to the city’s slums, helping restore the city’s status as global hub of tourism and trade.

Mr. Erdogan and other Turkish officials have said that they welcome the depreciation in the lira to encourage an export-based economy similar to economies in Japan and Taiwan. The Turkish president has framed this strategy as part of a broader struggle against Western countries who he has said want to hold Turkey back.

Some economists have said the strategy is likely to fail because inflation has put pressure on exporters, who now have to pay more for energy and raw materials. Turkish exporters have complained that the wildly fluctuating lira has made pricing impossible.

-www.wsj.com, 3 December 2021

Arno's Commentary

While Turkey became a member of NATO in 1952 and an associate member of the European Economic Community in 1963, they are still waiting to be admitted as a member of the European Union. 

There are a number of reasons why Turkey has not been admitted to the EU, one being it is not a European country. Historically, it’s been considered Asia Minor. The other reason is the population of Turkey adheres to the Islamic religion, and that at 99.8% of the population. Most media outlets place the blame on Mr. Erdogan, because of his drastic and unconventional manner in guiding Turkey’s economy and finances. Erdogan also developed a sour relationship with the US, when he purchased military hardware from Russia instead of the US.

While Turkey was the first Muslim-majority nation to recognize Israel in March 1949, its relations with Israel deteriorated when Israel raided the so-called “Gaza Freedom Flotilla” on 31 May 2010. The Turkish ship MV Mavi Marmara was commandeered by Israeli forces to the Port of Ashdod. During that military operation, 9 activists were killed.

Quite obviously, with Mr. Erdogan’s broad control over the economy and no one in the government to oppose him, investors have become suspicious and reluctant to invest in the Turkish lira. 

There is another problem; namely, Turkey’s attempt to be on par with modern, successful Western countries, but at the same time, fiercely holding on to religion. Many experts refer to the forbidding of paying or receiving interest for investments. Investopedia.com states, “Riba is a concept in Islam that refers broadly to the concept of growth, increasing, or exceeding, which in turn forbids interest credited from loans or deposits. The term ‘riba’ has also been roughly translated as the pursuit of illegal, exploitative gains made in business or trade under Islamic law, akin to usury.”

This, incidentally, is a picture of Christians, who like to have it both ways: one foot in the world, and the other as a pilgrim just passing through. 

We are reminded of the prophet Elijah, who challenged Israel, “…How long halt ye between two opinions? if the Lord be God, follow him: but if Baal, then follow him. And the people answered him not a word” (1 Kings 18:21).

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

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