By Yusuf KANLI
TDN- How many of us have seen the famous "The perfect storm" film directed by Wolfgang Petersen? I think the film was released in 2000 or 2001. If I recall correctly, it features George Clooney, Mark Wahlberg and Diana Lane. It is based on a book of the same name by Sebastian Junger.
The film was about the adventure of the crew of a fishing ship captured in an unusually intense storm pattern. It was a real nightmare.
Nowadays, we keep on hearing the same expression, not in connection with a group of seamen caught up in some very serious adverse weather conditions, but rather about a country, Turkey, which may face some very tough challenges in the months ahead both because of the impacts on the Turkish economy of the global developments unleashed with the U.S. mortgage crisis - the cost of which to the global economy is claimed might exceed $ 500 billion - as well as the domestic developments that might evolve because of the closure case against the ruling Justice and Development Party (AKP).
Economists are already issuing some "preemptive warnings" and demanding Turkey take some serious measures before it becomes too late. The Turkish lira has been overvalued. Current accounts deficit could not be brought under control and remains at an unprecedented high figure. Unemployment remains a serious burden. Inflation has taken a very dangerous upward trend once again. That is, there are many serious problems in the Turkish economy already.
The AKP is in efforts to send some alarm signals across to the judges and through the political corridors of Ankara and trying to make people believe that the closure case opened against it is the main reason of some negative developments in the economy in the last few weeks. That's of course an effort with which the AKP can fool only itself as neither the impacts of the across Atlantic crisis, nor the effects of the closure case are yet reflected on the performance of the Turkish economy.
The U.S.-instilled crisis has started hurting Britain first in Europe, as expected. Latest reports by the International Monetary Fund and British housing institutions underline that there has been almost 10 percent decline in real estate values and unless interest rates are lowered the slump will continue. There are fears that the mortgage crisis will have impacts far more serious than the similar crisis in Japan in 1992.
While there are some not so serious signs of the global crisis on the Turkish economy already, the real impact will come in the months ahead. Local adverse conditions, increasing credit costs and growing unpredictability in Turkey have already pulled real estate prices in Turkey down by between 10 and 25 percent depending on location. There are fears that a crisis in the construction sector will have across the board serious effects on the Turkish economy.
No one is yet talking about the possibility of withdrawal of foreign investments from Turkey, but as the international crisis continues to seep into Britain and into other European countries, the Turkish economy may enter into some very serious liquidity shortage woes.
Turkey cannot afford a crisis
In this junction Turkey least needed a domestic political crisis that has the potential to spread to the economic sphere rapidly. In short, a "perfect storm" is building up for Turkey and the Turkish economy. Urgent measures must be taken and perhaps a new stand-by deal with the IMF - which would ensure fiscal discipline - must be considered. On the other hand, the ruling AKP, in full awareness of both what's at risk for itself and for its leader, Prime Minister Recep Tayyip Erdodan, and the possible impacts of the global developments on Turkey, should speed up the "reconciliation" and "consensus seeking" mechanisms and find without further delay a way out from the current nasty situation with a magic formula which would not only save itself - and perhaps the pro-Kurdish Democratic Society Party (DTP) - but which will not be perceived by the public as an effort bending the laws in the AKP's favor.
The Monday night statement of the AKP that it will give prominence to the so-called 10th democratization package and the move to find a way of saving itself from closure by the Constitutional Court will follow that while in the meantime efforts will be underway to forge a reconciliation and consensus with the opposition parties to enhance Turkish democracy was a promising development but since then antagonism persists on the AKP front and leaves no area for a political compromise deal.
Time, however is running out and the "perfect storm" is building up.
(Yusuf Kanly can be contacted at [email protected] or [email protected])