2012-11-06 03:36:02 UTC
July 23, 2012,
Turkey to Europe: Who’s Sick Now?
By DAN BILEFSKY
With Europe roiled by economic crisis, Turks could be forgiven for
engaging in a bit of Ottoman-style chest-thumping.
A sense of material-fueled contentment is evident in Istanbul’s giant
gleaming malls where clutches of hip young women in brightly colored
headscarves clasp their Gucci purses while shopping with reckless
Corporate lawyers join six-month waiting lists to pay more than
$150,000 for the latest BMW model. There is even a new lifestyle
magazine for the burgeoning Islamic bourgeoisie that eschews thrusting
cleavage in favor of chic designer veils and five-star resorts with
separate his and her’s beaches.
While much of the continent sputtered last year, Turkey’s economy grew
by 8.5 percent, according to official data. Even with the fallout from
the troubles in the European Union, which accounts for the bulk of
Turkey’s exports, the Turkish government forecasts that growth will be
4 percent this year. (The International Monetary Fund predicts a more
modest 2.3 percent).
During the decadence of the Ottoman Empire in the 19th century, Turkey
acquired the unwelcome nickname “The sick man of Europe.” Now that
distinction has been happily passed on to neighboring Greece, where
high-spending Turkish tourists have been flocking to islands like
Mykonos this summer, perhaps helping to give the battered Greek
economy a bump.
Yet for all the signs of evident prosperity — and the loud
declarations by Turkish leaders that Turkey is an economic model for
the world — economists warn that the Turkish economy is at risk of
overheating and then stalling.
Analysts say explosive growth in consumer credit has stoked a worrying
expansion in the country’s current account deficit, which is forecast
by the government to be 8 percent of gross domestic product this year,
an improvement over last year’s 10 percent, but hardly reassuring.
The challenges of plugging financial holes of that magnitude were
behind the country’s past two economic ruptures, and some fear that
Turkish arrogance threatens to blind Ankara to the perils ahead.
“The economy is slowing down, and if external conditions do not
improve the country may not be able to rebound like it did after the
2009 crisis,” said Sinan Ulgen, a visiting scholar at Carnegie Europe.
“The government, however, seems to discount this scenario,” he added,
noting that overconfidence threatened to blind it to the effects of
protracted crisis in Europe on Turkey.
While Turkey’s economic luminaries gloat that Turkey — not Europe or
even the United States — will win the 21st century, the I.M.F has in
recent months been expressing a far less rosy outlook. That may
explain why Deputy Prime Minister Ali Babacan, who is in charge of the
economy, recently acknowledged that Ankara had blocked the domestic
release of four to five I.M.F. reports, according to the newspaper
Milliyet. It said the minister cited “certain subjective analyses” to
justify the blackout.
Among its warnings, the I.M.F. has noted that Europe’s spiraling
crisis threatens to undermine Turkish exports while the availability
of easy credit risks drying up as European banks, which own a sizable
chunk of the Turkish banking sector, focus on challenges closer to
home. The I.M.F. has forecast 2012 inflation of 10.6 percent and an
unemployment rate of 10.3 percent.
On a trip to Turkey in May, the fund’s straight-talking chief
Christine Lagarde warned that while Turkey had had a remarkable period
of growth over the last ten years, “vulnerabilities are arising as a
result of the large current account deficit financed by short-term
The I.M.F. is not alone in advising caution.
In May, Prime Minister Recep Tayyip Erdogan lashed out at the ratings
agency Standard & Poor’s after it downgraded Turkey’s credit rating
from positive to stable, even as it improved its outlook for crisis-
wracked Greece. “This is entirely an ideological approach. You cannot
fool anybody, you cannot fool Tayyip Erdogan,” the irate prime
Justifying its view, S&P said that less buoyant European demand for
Turkish exports combined with the country’s large external debt and a
dependence on indirect taxes to plug budget gaps were undermining
Others point out that regional instability, including the festering
conflict in neighboring Syria, could also have a detrimental effect on
And while Turkey, buoyed by the Arab Spring, seeks to offset its
dependence on Europe by investing in and expanding its presence in the
Middle East, economists warn it could take decades before fragile,
still underdeveloped economies like Egypt or Iraq yield meaningful
economic dividends for Ankara.
Even as the notes of caution intensify, Turks show little sign of
reining in their bullishness.
‘‘Those who called us ‘sick’ in the past are now ‘sick’ themselves,’’
Zafer Caglayan, Turkey’s minister of economy, said recently, with more
than a hint of well-honed Turkish schadenfreude. ‘‘May God grant them
..What goes around, I suppose come around.
July 24, 2012 at 7:59 a.
Europe in perils, Turkey economy will be very cautious. Europe #1
export area for Turkey. This changes all dynamics.
However Turkey is not Greece at all. Nor Bulgaria, Romania. As a size
of economy and population is more important and competitive than many
eatsern european countries.
Turkey must be cautious, trying to stop overspending and Banking
sector, Turkey has no banking sector. in 2001 crisis almost all banks
changed and owned by foreigners. Banking problem is their problem.
Turkey has one major luck, That is Istanbul.
July 24, 2012 at 7:59 a.m.
Orhan Güner Ankara
..It is definitely the rise of Islamic bourgeoisie in Turkey. In a
way, it depicts the picture of the graving polarization in society,
Islamists vs. nationalists (secularists). What is sick here in Turkey
is the manipulation of democracy. Here in Turkey, you are either a
terrorist or a supporter of coups if you happen to speak up and oppose
the activities of the ruling government. That is why respectful
intellectuals, journalists, academicians, politicians, writers,
honourable military officers, students, even elected members of the
parliament are in jails. Funny enough, even the former head of General
Staff is tried of being the head of a terrorist organization and
attempt for bringing down the government.
The ruling party gradually took the control of jurisdiction and
judicial system. With the help of an Islamic fellowship organization
(called the "Cemaat" whose leader lives in Pennisylvania, U.S) They
can simply put whoever they want into jail. Yes, perhaps the ruling
AKP brought economic welfare for somebody to an extent, but sadly it
took away people's trust in democracy, freedom of speech and freedom
of saying "you're wrong". Personally, I don't want money, I am not
after more economic power and welfare. What's the meaning of having
more money if you can't live the way you want, express yourself
freely, believe or not believe in any religion? I don't want to live
in a golden cage and bring up my children in this cage. I just want to
breathe. I just want justice, for all.
July 23, 2012 at 3:34 p.m
Nilgun Gokgur Hanoi, Vietnam
..This is the best response among all others. I join you and
congratulate you, Orhan Bey, wholeheartedly... Turkey needs more
thinkers like you inside and outside... A big bravo indeed!
July 26, 2012 at 9:11 a.m.
..This article only uses the opposition sources which look at the
worst case scenario for Turkey. Sinan Ulgen was a politician under
Husamettin Cindoruk a fierce opponent of current government. Milliyet
is a secularist opposition daily. Here the articles cites Milliyet as
a source and today Milliyet was citing this article as the source of
the same claims about IMF. S&P is the most bearish of all the rating
agencies about Turkish economy. In short most probably Turkey will do
much better than the claims in this article.
July 23, 2012 at 3:29 p.m.
A.G.Los Angeles, CA
..Well, then the advice to The NYT: Go find the AKP cronies, minions,
and accolades of RTE and print only their version. How pathetic! 50
years ago there was a man who divided the country badly and pitted one
group against the other. Eventually he paid with his life, his name:
Adnan Menderes. RTE will do well to learn from history.
July 29, 2012 at 12:32 a.m.
M. Guney Gamber Istanbul, Turkey
..I guess NYT ist still trying to show Turkish economy as bad as
possible just to support the views of Standard and Poors. I am even
myself not sure if they will ever pubish my comment here. There is no
even a sign of positivism in this above article and just telling to
the world that "Hey, Turkey's economy is not that good as they think
and they are really foolish to think that they are doing well." Why do
you always have to show to the world that Turkey is not good, just
tell me why ?
July 23, 2012 at 3:28 p.m.
laissez faireAnkara, Turkey
..Perhaps they make more money by publishing such articles instead of
more honest and better informed assessments.
July 25, 2012 at 12:22 a.m.
Uziel Nogueira Florianopolis - SC - Brasil
..Wikipedia: The economy of Turkey is defined as an emerging market
economy by the IMF and is largely developed, making it one of the
world's newly industrialized countries. The country is among the
world's leading producers of agricultural products; textiles; motor
vehicles, ships and other transportation equipment; construction
materials; consumer electronics and home appliances. In recent years,
Turkey had a rapidly growing private sector, yet the state still plays
a major role in industry, banking, transport, and communications. The
EU is the main exporting market to Turkey's products.
Despite Turkey's good economic moment, it is to early to open the
champagne and celebrate. As early as 2005, the country's public
finances were a big mess. As usual, an IMF loan was in place with
strict conditionality on public spending. Moreover, Turkey is very
vulnerable to a contagion effect from an economic weak Europe.
Successful emerging economies such as Turkey and Brazil will do well
as long as advanced economies overcome their financial problems and
The longer the financial problems in the EU-US persist, the more
vulnerable the Turkish economy be to a sudden economic downturn. In
today's world, a reversal of fortune can happens overnight to any
country. As the old saying goes, enjoy the moment, wish for the best
and prepare for the worst.
July 23, 2012 at 3:23 p.m.
M. Guney Gamber Istanbul, Turkey
..Well, the problem here is not the vulnerability of Turkey against
shocks. The problem in this article is that the synical way of
writer's approach against Turkey. He is making fun of Turkey openly
and consider them as stupid and blind people who cannot see the future
well. I never believe Turkey will go down with the others. If he did
not go down with Europe, then why he should go down now ? I do not
like the articles supporting Israeli views. The aim is to give false
news about the current Turkish economy and show the ruling party as
weak. In this way, they try to prevent more people to be attracted to
Turkey and its economy. I advise NYT to find unbiased and honest
writers to talk about Turkey.
July 24, 2012 at 2:04 a.m.
..It is true that NYT has a "style of writing" that it adopts in
articles about China, India, Turkey, Russia and such other countries
and societies which normally angers those who know these countries
well, but to suggest that Turkey's economy cannot get into trouble
because it did not get into trouble this time round when the rest of
Euro is in trouble is utter nonsense !
If the reported about the suppression of IMF's reports in Turkey by
its Government is correct, then it also speaks of a longer term
malaise that affects many Islamic societies - a deep seated instinct
towards censorship, and a deep dislike for freedom of speech and
thought ! Very few societies - unless they are commodity based like
Saudi Arabia is - can thrive in the long run when its citizens cannot
access information freely or speak what they think freely ! At the end
of the day West has excelled because of its use of Science and
Technology, and Science and Technology cannot go very for in societies
that curtail access to information and freedom of speech !
July 25, 2012 at 5:40 a.m.
m fatih istanbul
that s right we are improving our country's heavy industries and also
ecucation system . i think in the future Turkey will be a superpower
in the world unless we wont fight ( with any muslim country (syria).
July 23, 2012 at 8:32 a.m