Turkey's balancing role in global eco-politics

Published 13.12.2019 22:31
Updated 20.12.2019 02:22

Global eco-politics are experiencing a heavy and painful transformation due to indifference and irresponsibility in dealing with problems worldwide; likewise, the necessary attention and sincerity have not been utilized in processes that will provide solutions to the fundamental problems of the 21st century. The impositions of the established order under the control of neoliberals and neo-imperialists and their insensitivity and coarseness toward humanitarian values have poisoned the world's social and natural atmosphere.

The air has become heavier and the oxygen we breathe is so thin, we feel desperate. However, instead of trying to stop the rise of the Asia-Pacific region, which is an inevitable reality for the 21st century, by using neo-imperial methods, the "developed" Atlantic could have summoned Turkey and India as the balancers of the global transformation.

However, the Atlantic Alliance is currently trapped in the neoliberal and neo-imperial order. It, unfortunately, doesn’t accept the advance of the democratic cultures of Turkey and India and only sees them as a frontier against Russia and China in the global system. This is a huge mistake because Turkey and India have sufficient economic power to act as role models for weaker democratic countries. Moreover, the Atlantic Alliance should also keep in mind that the two countries can help the Eurasian region improve and enhance its economy.

The rationale is plain and simple. Both Turkey and India are developing at a pace that allows them to overcome the pressure of the established order. Therefore, both countries' growing relations with Russia and China, their constructive steps to improve cooperation and increasing their role in the global political economy have all reached a level that makes assigning Turkey and India some roles impossible. If the established order is blind enough to think that they can get results by building a terror corridor in southern Turkey or by igniting the Kashmir issue between Pakistan and India, they are laying the foundation for their own demise.

However, Russia and China also need to take a long look in the mirror. Neither positively contributes to their geostrategic position with their open and implicit threats on a regional and global scale. From the Eurasian point of view, it cannot be stated that they send satisfactory, comprehensible messages of inclusiveness and embracing understanding. They lend the image of prioritizing regional or global developments solely in line with their own interests.

It is in everyone's interest that Russia and China move toward a more constructive position for the future of Eurasia. Therefore, they need to establish enriched and multifaceted relationships with Turkey and India. Particularly, if China's Belt and Road Initiative does not provide expansion that offers opportunities to countries that are party to this project. If it doesn’t work from the East to the West as well as from the West to the East, it will not build an inclusive future, and the initiative may face many obstacles. Smart players would do well to analyze and support Turkey and India's indispensable role and shape their strategies accordingly.

CBRT continued, FED paused

As I mentioned in my article Wednesday, my expectation for the interest rate decision after yesterday’s Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee (MPC) meeting was that it would be cut between 0.75 and 1.25 points. Just like the earlier preplanned steps that the MPC adopted with consecutive rate cuts, it seems like the MPC, again, adopted a preplanned step.

In an environment where MPC meetings are held every month, the CBRT can skip the first three months and leave the next rate cut for April by continuing to send out strong signals on price and financial stability upon closely following the trend of the annualized headline inflation in the first quarter of 2020 and after the three-month inflation remaining under 2% in the first quarter of 2020.

The CBRT, as a justification for the 200 basis point interest rate cuts, pointed to the finding, a prediction that the disinflation process, i.e. the process of recovering from high inflation, will continue without losing momentum in the light of the global and regional macroeconomic developments. It, in turn, stated improvement in inflation continues to spread across all price indices and is also observed in core inflation values. Thus, the risk of diverging from the disinflation path, or easing the inflation, is a balanced, in other words, low risk. At this point, the CBRT also observes the attitude of the two major central banks, the U.S. and the European Central Bank (ECB).

Even though uncertainties may decline, the FED, on the other hand, finds a step toward an interest rate hike in the U.S. economy early and points out that a possible interest rate hike can only take place in 2021.

On the ECB front, President Christine Lagarde said necessary support was given through monetary policy and that euro area countries with a good fiscal balance of the public sector should support growth by focusing on public spending. If the stance of the two central banks puts the euro-dollar parity on the 1.14-1.11 dollar band, a relatively stable non-weakening euro will not cause any further difficulties for Turkish exporters.

Depending on the steps already taken and to be taken by the CBRT, the dollar and the euro attaining a competitive level will strengthen the contribution of Turkey’s exports in growth and employment.

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