Qatari-Iranian palliatives failing in rescuing Turkish economy

Mahmud al-Batakoshi

The Turkish lira has been losing value against all foreign currencies since Turkey started interfering in Syria. The US dollar now pegs at 5.88 liras, which contributes to raising the prices of commodities across the board.

Turkey’s foreign debts have reached $44.7 billion at the end of June this year. The trade deficit has risen four-fold, amounting to $108.8 billion, according to the Turkish government.

The inflation rate has risen as well as the unemployment rate. This is bringing more pressures to the private sector. The Turkish economy has also become stagnant for the first time in ten years. This is raising the cost of insurance on Turkish sovereign debts.

This is prompting Turkey’s allies, Qatar and Iran, to intervene to rescue the Turkish economy. On September 25, the Governor of the Central Bank of Iran said his country would include the Turkish lira in its currency basket, instead of the US dollar. This allows Iran to hit two birds with one stone, namely evade US economic sanctions, and rescue Turkey.

Turkey reciprocated by defending Iran against accusations of standing behind attacks on oil facilities in Saudi Arabia. Turkish President, Recep Tayyip Erdogan, called for practicing caution when it comes to accusing Iran of perpetrating the attacks.

“We have to admit that all parties in Yemen can launch such attacks,” Erdogan told the American news channel, Fox News, on the sidelines of the UN General Assembly meetings in New York. “It will not be good to hold Iran totally responsible.”

Qatari ruler, Tamim bin Hamad al-Thani, also hurried to rescue Erdogan by announcing a fresh package of investments in Turkey. Turkey and Qatar signed 52 deals since the beginning of the economic crisis in Turkey.

Turkish companies carry out a large number of the projects implemented in Qatar now, especially infrastructure projects. The same companies invest around $16 billion in Qatar. There are also 242 joint Turkish-Qatari companies in Qatar.

Qatar invests about $23 billion in Turkey. The volume of trade between the two countries has risen to $1 billion.

Nevertheless, all these efforts are doing nothing to prevent the Turkish economy’s free fall. Three Turkish banks had to sell $1 billion in the market to prevent the Turkish lira from further devaluation, according to Bloomberg.

Economists attribute the deterioration of economic conditions in Turkey to negative ramifications from the failed 2016 coup satire and the subsequent arrests of political opponents.

The lack of freedoms and deteriorating political conditions, they said, cause investors to escape Turkey.