Recep Erdogan is no King Canute.
The Danish monarch ordered the tide to halt in order to show his obsequious aides how the sea’s waves ignore him and wet his feet, and how nature mocks his power.
Turkey’s president, by contrast, challenged nature to a duel, as he ordered Turks with “dollars, euros or gold under their pillows” to buy his lira, the battered currency that this month alone lost one third of its value, and some 50% since the beginning of the year.
Nature’s response – an even faster flight from the lira – underscored the tragedies of Erdogan the man and Turkey the country.
Yet the real tragedy beyond the lira’s meltdown is the broader Muslim world’s historic failure to produce modern economies.
Erdogan the man has now welded Napoleon’s hubris, Stalin’s paranoia and Nero’s pyromania, having remodeled himself as absolute president while arresting thousands of imaginary enemies before torching the lira and setting the economy ablaze.
It is therefore tempting to attribute Turkey’s financial mayhem to the role of the individual in history – to the man who in 2005, after deleting six zeros from the old lira, said, “We are very happy to have rid Turkey of such a shame, of multi-zeroed banknotes,” only to later praise cheap money, make his son-in-law finance minister, and warn the central bank not to raise its embattled currency’s interest rates.
Even so, at play here is something larger than one man. For what is now unraveling is the entire millennial hope that Turkey’s Islamists will inspire economic modernity elsewhere in the Muslim world.
The Muslim world’s economic underperformance is a statistical fact decried by the UN’s Arab Human Development Reports, and reflected in 57 Muslim-majority countries’ per-capita GDP sloshing at $15,966, as opposed to 50 European countries’ $27,330, and 36 OECD member-states’ $38,877.
Subtract from the Muslim states’ already low figure the astronomical GDP’s of petro-states like Qatar and Kuwait, and the scale of the Muslim economies’ crisis becomes glaring, raising the question: Why are they behind?
How the West got ahead is clear. The Industrial Revolution happened in Europe, and left everyone else behind.
However, other civilizations soon got busy catching up: Japan did it in the 19th century, then came Korea, Brazil, China, India and others. The Muslim world remained behind, with one exception: Turkey.
Since the Ottomans’ downfall, Turkey gradually became a fully industrialized society, a respected automotive and white-goods manufacturer whose exports drive the world’s 17th largest economy, at $850 billion. Turkey was therefore set aside while scholars probed the Muslim world’s economic crisis.
Some blamed the banning of the printing press, which Muslim leaders feared – rightly – as a threat to faith; others pointed to medieval Muslim cities’ lack of anything like Europe’s independent-minded Hanseatic League; others noted Muslim societies’ lack of guilds, and Islamic law’s failure to recognize the corporation as a legal entity, which made it difficult for businesses to transcend clan and tribe.
The common denominator among all these is a refusal to share power. Is Turkey’s economic crisis, then, about Muslim civilization’s political DNA? Indeed, even if Erdogan is ultimately deposed and disgraced, he could not purge thousands of academics, jurists, journalists, businessmen and military brass without the backing of millions who prefer his Islamism and authoritarianism over the West’s alternatives.
Then again, republican Turkey went through pains to abandon the Sultans’ ways.
Last century’s Turkey built a functioning democracy with an independent judiciary, a free press, pro-business laws, big banks, insurers and industrial corporations, freely researching universities and a vibrant community of opinionated novelists, poets, filmmakers, and social critics.
Much of this is now gone as Erdogan, in the spirit of medieval Muslim norms, refused to tolerate any institution’s independence. That is why after decapitating the military, conquering the courts, flooring the media, and castrating parliament and cabinet, he turned to the last independent agency, the central bank, whose disempowerment was just laid bare.
The central bank’s response to the lira’s crisis, to ease the flow of dollars, euros and gold from the commercial banks to the financial markets, is symptomatic treatment. It will supply foreign cash and temporarily block the lira’s plunge. It will not, however, restore foreign investors’ trust in the economy that Erdogan has challenged with a culture of borrowing, deficits, cronyism and governmental intrusion.
Trust's restoration must start with a sharp hike in interest rates, and with the politicians’ removal from monetary policy, the way Israel’s were in 1985 when the Knesset banned, by law, printing money as a means of covering deficits, a key measure in the austerity plan that saved Israel from economic ruin.
Alas, such pragmatism is for Erdogan unbearable, because it means ceding power, and because it means raising interest rates, a potion to which he appears religiously hostile. And so, like the medieval sultans, Erdogan is overruling experts, choking institutional independence and inspiring a culture of obedience and nepotism, all of which are as good for the economy as cholesterol is to the heart.
Elbowing an 80-year-old secular establishment which had steered Turkey from the Mideast to the West, Erdogan planned a grand return to the Mideast, in what came to be known as neo-Ottomanism.
In the West, hopes ran high that the economically vibrant Turkey would inspire economic transition in the Arab world. Yet Arab leaders rejected Turkey’s extended hand, behaving as if their citizens didn’t need the jobs, factories, banks, highways, universities and social mobility that Arab economies lacked and Turkey produced.
Within several years, the same Arab leaders who shunned Turkey’s economic partnership faced the social wrath that unseated the leaders of Egypt, Tunisia, Libya and Yemen, and sparked multiple civil wars. Now, having failed to redeem the Arab Mideast, Turkey is imitating it, marching bravely into an abyss of debts, deficits, bankruptcies, layoffs, and despair.
Violence, judging by regional precedent, is but a matter of time. www.MiddleIsrael.net
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