Page 7 - TURKRptFeb21

Biden appears to be Erdogan’s sole hope and if Biden accepts the task of rescuing Erdogan all other problems plaguing the Ankara palace could be managed.
But if Erdogan cannot find a way to obtain strong backing from Biden, 2021 could see the collapse of Turkey’s governing edifice.
In such a case, Erdogan will resort to whatever means he has at hand, just as he burnt the country after he lost his parliamentary majority in the June 2015 elections—but he would lose in a snap poll.
By February or March, it should be clearer whether Erdogan has Biden’s support or not.
Turkey’s conflict with the Kurds, Erdogan’s relations with the jihadists he has struck cooperation deals with in Syria, the chance of the country shifting back to being a parliamentary republic and changing alliances in the political coalitions will be other closely observed matters.
The trick will be to look for real developments amid all the noise generated in and by the media. Same applies for the talk by the EU politicians.
Poverty levels in Turkey are deepening and it is the reason why Erdogan would lose any upcoming election.
Turkey will still not be over the spread of coronavirus by the end of 2021. If the situation with the pandemic means Turkey cannot properly launch its
tourism season in April, it would mean a tectonic collapse in the economy. Official data series are a bad joke.
It is pretty much certain that the 2020 official growth rate will be posted over 1.5% and if the Erdogan show remains in place, expect 5% in 2020.
Forecasts will converge to the order at the statistics institute.
The construction and automotive industries were bailed out again in 2020 with the dumping of cheap loans. More industries, led by tourism and retail, will join the bailout queue in 2021.
Problem loans currently make up around 15% of Turkish banks’ loan books and the figure is expected to extend into the 20%s in 2021.
Ongoing “regulatory forbearance” and the restructuring of loans hide the real picture, but the banks’ balance sheets, weighed down by non-performing loans (NPLs), are in fact among Turkey’s most serious headaches.
Turkey is currently in the midst of a growing second wave of high stakes debt restructurings. Its banking industry has been subject to non-stop loan restructuring cycles since 2016.
More industries join the restructuring queue with each economic crisis, and the restructuring efforts in effect now take place amid interwoven crisis cycles.
A contrived advantage for the Turkish banking industry is that its financial statements are unaffected by the situation and it can go on releasing huge profits—this is because of the generous “regulatory forbearance” exercised by the Erdogan administration.
The contractors behind giant infrastructure black holes along with energy, construction, tourism, airline and retail companies, along with a great
7 TURKEY Country Report February 2021 www.intellinews.com