Page 3 - Turkey Outlook 2022

1.0 Executive Summary

Turkey. Country of action. The Turkey watcher knows they can hardly take
their eye off the place for a split second. And in 2022, such sentiments might
apply more than ever. Mired in unprecedented Turkish lira volatility, the nation
has entered another phase of escalation in its ongoing collapse in all fields.

It’s well known by now that chaos has beset Turkey’s economy, but how many
outside of the country can properly see the chaos that has crept into almost
any sphere you can name, from foreign policy to the health system, education
system, food security and so on, and on.

The prevailing consensus right now suggests that Turkey is embroiled in a
financial and economic crisis, just as it was in August 2018. But this publication
is sticking to its contention that the beginnings of the country’s full-blown
collapse on all fronts—part of which can be accurately described as a financial
and economic depression—can actually be found in the aftermath of the failed
coup attempt in July 2016.

There has been a nonstop worsening of Turkey’s plight ever since those
fraught days when President Recep Tayyip Erdogan declared that he had
survived an armed conspiracy to topple him and, emboldened, set about
becoming all-powerful.

The last time Turkey saw the type of food and basic goods shortages that are
in evidence today was at the end of the 1970s. It was a time when many
people died in clashes between the right and left. The PKK, a Kurdish terrorist
organisation, arose on that fertile ground. The chaos paved the way for the
1980 military coup.

Turkey rarely enjoys a “bloodless” year, but 2022 has to be marked out as a
candidate that will claim an unmistakably tragic page in history when it comes
to violence.

The only hope for the country is that the Erdogan administration will chance its
arm in a snap poll. Ever since the regime lost the Istanbul mayoral election,
plus a rerun, in 2019, we have, rather than posing the question of whether
Erdogan will lose the next parliamentary and presidential elections, pondered
whether any election will be held.

The election does not need to be “fair”. Erdogan will lose any election.

In this most positive case, Turkish assets, led by the lira, would see a sharp
rally. It would begin as soon as the market became convinced that Erdogan
would have to hand over the reins of power. Turkey would then fall into another
“hot money trap”, as all “semi-colonies” do. An actual recovery, which could be
described as at least returning to the 2015 settings, would require, at a
minimum, five years of uninterrupted healing, with the programme to cover
each and every corner of life.

It should be noted that, in the post-Erdogan period, any government,
democratic or undemocratic, would have to politically and economically
surrender to an International Monetary Fund (IMF) programme. And past

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