Last week, President Recep Tayyip Erdoğan’s visit to Hungary was the top topic in Türkiye. Secondly, the steps taken in pursuit of hot money made the headlines. And many political parties engaged in the debates on Sheikh Sait, who led the rebellion against the new-established Turkish Republic in 1925.
Erdoğan in Hungary
President Erdoğan was on a 2-day visit to Hungary.
In Hungary, Erdoğan first met with his Hungarian counterpart, Katalin Novak. Welcomed with a military ceremony, Erdoğan had a closed-door meeting with Novak that lasted about 2 hours.
Then Erdoğan met with Hungarian Prime Minister Viktor Orban in Budapest. A Türkiye-Hungary High-Level Strategic Cooperation Council Meeting was held under the chairmanship of Erdoğan and Orban, and a 17-article cooperation agreement was signed between the two countries.
After the meeting, Erdoğan in his assessments on social media, noted that they aimed for a trade volume of $6 billion between the two countries and planned to deepen cooperation in the field of energy.
During the agreements a large group of Turkish ministers and officials were present including Minister of Family and Social Services Mahinur Özdemir Göktaş, Foreign Minister Hakan Fidan, Minister of Energy and Natural Resources Alparslan Bayraktar, Interior Minister Ali Yerlikaya, Minister of Culture and Tourism Mehmet Nuri Ersoy, Minister of National Defense Yaşar Güler, Minister of Industry and Technology Mehmet Fatih Kacır, Minister of Trade Ömer Bolat, Presidential Communications Director Fahrettin Altun, Presidential Chief Advisor Ambassador Akif Çağatay Kılıç.
Prime Minister Orban stated that President Erdoğan had put forward a great project for the next century, saying, “The next century will be yours. We believed in this, and we made agreements.”
During the joint press conference between the two leaders, the Hungarian leader made the following statements: “Today, we have elevated our relations to comprehensive strategic cooperation. I don’t know if there is anything beyond this, something higher. In diplomatic terms, I believe this is the strongest in terms of friendship and brotherhood.”
Besides bilateral relations, it was reported that the two leaders also discussed the issues of NATO expansion, ongoing Israeli attacks in Gaza and topics related to the European Union.
After the meeting, Erdoğan presented a TOGG, a Turkish product car, to Orban, and in return, Orban a horse to Erdoğan.
President Erdoğan also made significant statements on the Gaza during the flight back from Hungary. Erdoğan emphasized the historic responsibility of the US to persuade Israel to abandon cruelty and stop the ongoing massacre in Gaza: “In our meeting with Biden, I reminded the US of that historic responsibility. I called on them to take the stance the whole world is expecting.
(…)
It is imperative to take fair steps for a more just world. I believe that the US has a historic responsibility in this process and it must fulfill it. That responsibility is to make Israel abandon this cruelty and stop the massacre in Gaza. However, instead of stopping Israel, the US has almost encouraged it. Israel, deriving courage and strength from the US, has all acted against international law or human rights. We are talking about an Israel that acts with an attitude of ‘I have the US behind me, and it will protect me under any circumstances.’ In our meeting with Biden, I reminded the US of that historic responsibility. I called on them to take the stance the whole world is expecting. How else can the world shout that Israel must be stopped? For weeks, humanity has been saying ‘enough’ on the UN platform and in the squares of countries.”
Pursuit of hot money
As the economic problems continue to intensify, economic authorities are seeking foreign hot money as a solution and are taking new economic measures in this regard.
Minister of Finance Mehmet Şimşek, who has visited Gulf countries four times, held meetings with investors in the US, the UK and France. In January, Şimşek will make on another visit to the US, this time accompanied by the governor of the Central Bank Hafize Gaye Erkan.
Most recently, Şimşek made statements during his visit to Spain:
“Our international investor meetings continue in Spain. The meeting, organized by BBVA, with executives of globally influential Spain-based companies worth $2 trillion and the financial sector, was very productive. Investors from the communications, finance, energy, health, tourism, automotive and textile sectors are showing great interest in Türkiye’s growth potential and the opportunities it offers. Our program and its results were closely followed with great curiosity in both our one-on-one meetings and our extensive investor meetings. Our Medium-Term Program will significantly contribute to revitalizing investment appetite for our country and increasing international investments.”
With Mehmet Şimşek leading the economy and Hafize Gaye Erkan heading the Central Bank, the government has shifted its focus on policies aimed at attracting foreign investors and money to Türkiye, also by using interest rate hikes.
When he came to office, Minister Şimşek outlined the components of the new program as follows:
– Restoring fiscal discipline; bringing the budget deficit, excluding the earthquake impact, to a level compatible with Maastricht criteria.
– Gradual monetary tightening and an income policy consistent with the inflation target to reduce inflation to single digits in the medium term.
– Implementing structural reforms that will make macro-financial stability and all other achievements permanent.
In line with these principles, interest rate hikes have been implemented more than once. However, these could not prevent the rise in foreign currencies, especially the dollar and the euro, and the decline in the Turkish Lira. Inflation, particularly food inflation, continues to increase. And no certain solution was found against unemployment.
Some experts express the view that the fragility in the economy is causing foreign investors to be cautious in investing.
Economist Hakan Topkurulu, in his article on new economic policies, says the following:
“On December 7th, Thursday, the Central Bank’s reserve amount was announced. The Central Bank’s total reserves amounted to 140 billion 149 million dollars. Of this reserve, 46 billion 916 million dollars were in gold, and the balance of 93 billion 233 million dollars consisted of cash foreign exchange reserves (…) Is this reserve accumulation really a necessary endeavor? Why is society being sensitized to this extent? Could this be a perception management operation.
First of all, I would like to emphasize that this foreign exchange reserve (excluding gold) is not a net reserve. In other words, foreign exchange reserves are not money owned by the Central Bank. This foreign exchange is primarily money deposited by banks as statutory reserves and obtained from abroad as SWAP.
As of June 2023, Türkiye’s total external debt is 475 billion 768 million dollars. Of this debt, 234 billion 855 million dollars are private sector debt and 240 billion 913 million dollars is public debt. Of this debt, 46 billion 234 million dollars belong to the Central Bank of the Republic of Türkiye.”
Topkurulu, after sharing these data, criticizes the government’s economic policies:
“Now, let’s put it this way. Let’s say that the reserve of 93 billion 233 million dollars is a net reserve, that is to say it belongs to the Central Bank. The question is, why does the Central Bank not attempt to pay off its debts and try to get rid of the burden of paying interest, instead of holding so much reserve money? If we say that ‘it doesn’t have its own money and this is reserve money anyway and it has to borrow, why are we cheering so loudly with someone else’s money? (…) Let me state this right away: After the general elections in 2023, the AK Party chose the path of solving its problems within the Atlantic economic system and is trying to fulfill the requirements of this path.”
Topkurulu emphasizes that the pursuit of hot money will not be a solution to the problems and adds that the West expects concessions from the government in exchange of hot money.
Debates on Sheikh Sait
The other topic that shaped thel last week’s agenda in Türkiye was historical debates surrounding Sheikh Sait, who led a rebellion in 1925 against the young Republic of Türkiye mostly on ethnic and religious bases with the support of the British. Sheikh Sait was executed after the the rebellion was crushed.
The debates started after the trustee administration appointed by the government to Diyarbakır Municipality (in the southeastern part of the country) named a new boulevard in the city after Sheikh Sait. Almost all the political parties engaged in the discussion.
Regarding the issue, the leader of the main opposition party Republican People’s Party (CHP), Özgür Özel, stated the following:
“If me calling Sheikh Said a traitor or a hero would make you happy… I know that the Sheikh Said rebellion was a uprising against the Republic in its own context. If the sufferings that occurred during the suppression of this uprising are hurting the hearts of some grandchildren today, one must respect that. However, we need to learn from history. It is not anyone’s place to attribute the discomforts and sorrows to Atatürk or burden the CHP where there were no communication facilities like today and it was not possible to follow orders given.”
Another statement on the issue came from the Peoples’ Equality and Democracy Party (DEM Party), which has close ties with the PKK terrorist organization. Co-Chair Tuncer Bakırhan stated the following:
“Sheikh Said is the honor and value of the Kurdish people. He has made significant efforts in the struggle for the existence of his people and has paid a price for this cause. We do not accept insults and disrespect towards him. We also condemn those who insult.”
While the ruling party AKP continues to be silent, the chairman of the Nationalist Movement Party (MHP), the ally of the AKP, Devlet Bahçeli, made statament:
“Said is a traitor, the terrorist leader of his time, a murderer, a beast, a servant of imperialism. He attacked our soldiers, incited the people to rebellion, attempted to invade Genç, Palu, Elazığ, Silvan, Lice, Varto and launched attacks to seize Diyarbakır. He stated that if these attacks had been successful, he would support from England for the so-called Kurdistan. Whoever praises such a scoundrel is in the same pit (…) Naming a boulevard after Sheikh Said in Diyarbakır is a grave insult and disrespect, especially to my brothers and sisters in Diyarbakır.”
Vatan Party leader Doğu Perinçek also made an assessment on the issue and said the following:
“Sheikh Sait in 1924-1925, incited some of our people, tried to divide our homeland, sent letters to the English asking them for support. He was used for the resolution of the Mosul issue in favor of England. He rebelled against our Republic. Atatürk suppressed him with arms.
There is no difference between praising PKK and praising Sheikh Sait. Sheikh Sait is the grandfather of the PKK.”
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