The Prime Minister of Turkey, Recep Tayyip Erdogan, he is literally messing around in his country (already today, for example, he has censored YouTube to avoid videos that annoy him). Things are not going well there. The riots of a few months ago in the Istanbul Gezi Park they were already a glimpse of what was to come. The Erdogan government now faces a very serious economic problem.
La turkey economy it is slowing down at a very dangerous rate. Its currency is hovering around all-time lows against the dollar and some of its major companies face huge foreign debts. And all this despite the fact that Erdogan himself, at the beginning of his term in 2003, managed to attract the attention of investors from other parts of Europe, Russia and China.
As the crisis began to hit the more developed economies, investors set their sights exclusively on the more emerging markets, which promised higher returns. Turkey was among them. Other countries in Europe viewed the march of capital to Turkish soil with envy.
During the foreign boom time, Turkey has enjoyed such a boom that even the country's GDP and the per capita income it has increased three times since 2003. However, it all ended last summer, when, thanks to the economic stability of the United States, investors began to withdraw their money from the markets until now emerging. During this process the turkish inflation it was placed at 7,4%, well above the initial forecasts.
The country's currency, the lira, began to fall, forcing Turkish central banks to take a radical approach and interest rates that went from 7% to 12%. With these measures they tried by all means the exit of foreign capital. But of course, a higher interest rate entails a sudden stop to economic growth. As debt rises, prices go up in a tail-biting whiting.
Erdogan strongly opposed the banks' measures and concluded that this was a conspiracy against him and his government. Meanwhile the turkey poverty grows considerably. It is curious that a country among the twenty largest economies in the world has one in five of its inhabitants living below the poverty line, one of the highest figures on the planet.
The truth is that Turkey is experiencing times of uncertainty and social unrest. Its stock market has already lost a third of the value it held around this time in 2013. This weekend's local elections may prove crucial.
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