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Turkey's economic lie
Moved to Opinion because it was published as an opinion piece.
Some refer to him as "the Middle East's new sultan in a neo-Ottoman empire" -- yet the truth about Erdogan's kingdom is utterly different. We are not facing an economic power, but rather, a state whose credit bubble will be bursting any moment now and bringing down its economy.

The budget deficit of the collapsing Greece compared to its GDP stands at some 10%, and the world is alarmed. At the same time, Turkey's deficit is at 9.5%, yet some members of the financial media describe the Turkish economy as a success story (for comparison's sake, Israel's deficit stands at some 3% and is expected to decline to 2% this year.)

While Turkey's economy grew by some 10% this year, this was merely the result of financial manipulation.
Erdogan did train as an economist...
So how does the system work? The banks in Erdogan's Turkey handed out loans and mortgages to any seeker in recent years, offering very low interest rates; this was in fact a gift. As the interest rate was so low, Turkish citizens used more and more credit, mostly for consumption.

And how did Turkey's Central Bank finance this credit party? Via loans: Erdogan's bank borrowed money in the world and handed it out to its citizens. However, Turkey's deficit kept growing because of it, until it reached a scary 8% of GDP; by the end of the year the figure is expected to reach 10%.

Turkey's external debt doubled itself in the past 18 months, which were election campaign months. Only a small part of the deficit (15%) was financed by foreign investment. The rest constitutes immense external debts.

...Turkey's unemployment rate is 13% and the local currency continues to plummet vis-à-vis the dollar -- it reached its lowest levels since the 2009 global crisis. With a weak currency and with a stock exchange that lost some 40% of its value in dollars in the last six months, Erdogan wants to be the Middle East's ruler?
Posted by: g(r)omgoru 2011-09-19
http://www.rantburg.com/poparticle.php?ID=330077