Why Turkey will be more reliable from now on
There is no country other than Turkey that has so rapidly recovered from such a terrorist attack and attempted coup with the markets "running like clockwork" as Prime Minister Binali Yıldırım said. First of all, we can say that this attempted coup, which can also be evaluated as a total attack against Turkey, has strong external connections. In this respect, the attempted coup of July 15 is a new-generation war and a terrorist attack that includes different war scenarios from the military coups that were staged in Turkey and Latin America during the 1970s and 1980s.
Given that such terrorist attacks started with the 9/11 attacks in the U.S. in 2001, we can understand how robust Turkish economy has remained in the face of the July 15 attack. We know that the U.S. economy was paralyzed after the 9/11 attack, with 1.8 million people losing their jobs within a year following the attack. Although the U.S. Congress granted $15 billion to the aviation sector alone after the attack, it failed to prevent its collapse. Losses in U.S. stock exchanges reached $1.4 trillion within a week following the attack. Furthermore, the U.S. lost five million tourists in 2001 alone.
The Turkish bond market has risen by only 20 basis points since July 15. People flocked to ATMs in the first hours of the attempted coup, however, even ATMs in uncrowded holiday resorts satisfied their demand of cash withdrawal. There was not a serious demand for foreign exchange in the morning that followed the attempted coup. On the contrary, domestic investors sold $2.5 billion. There was not a significant outflow in bank deposits and interest rates hovered between 10.5 percent and 11.5 percent. Moreover, there was not a great leap in the exchange rates on the first Monday after the attempted coup. When we examine 90 countries that have experienced a military coup, attempted coup or great terrorist attack, we do not see an equivalent country to Turkey, which rapidly recovered from the July 15 attempted coup. Interestingly enough, residents' switch from foreign currency to Turkish lira continued until international credit rating agency Moody's announced Turkey's credit score in the afternoon on July 19. Foreign currencies and interest rates did not even experience bubbles. Then why did Moody's examine Turkey in a negative way and say that it might downgrade Turkey's credit rating to the junk level? For now, we cannot explain this situation as continuation of the bloody attempted coup, however, we are watching malevolent initiatives and we consider them to be negative. This being the case, the intention of the international credit rating agencies, the seriousness of which has been questioned by all segments on all levels for a long time, must be further questioned based on this. We cannot help but think whether it could be the task of such agencies to complete the economic aspect of this attempted coup, which politically failed and which is essentially a crime against humanity.
Turkey's resistance will be recorded as a great success not only in the history of Turkey, but also of humanity, as it is also a struggle for economic independence. People who resisted in the streets and squares and stood in front of tanks on the night of the attempted coup and the following nights went to work in the morning and opened their workplaces to turn the wheels of the economy. People looted ATMs when they failed to provide cash during the European crisis in Greece, Portugal and Spain. In other words, there was not a civil war or attempted coup, but an economic crisis in these countries.
A credit rating agency authority says that the July 15 attempted coup has raised Turkey's political risks and that these risks have continued for two years. This is true, as operations and terrorist attacks on Turkey have risen since Dec. 17 and Dec. 25, 2013. The PKK and DAESH terror paved the way for the July 15 attempted coup. The street terrorism, which nearly grew into a civil war before Sept. 12, 1980, opened the way for the military coup of the 1980s. Likewise, this wave of terrorism is what paved the way for the attempted coup on July 15. In short, the attempted coup of July 15 was the bloody finale of an attack against Turkey and President Recep Tayyip Erdoğan that had increased in frequency since 2013. If so, Turkey's political risks have declined since July 15.
Credit rating agencies downgrade the scores of countries based on some criteria. They downgrade their credit scores if they find that there is a significant fall in their medium-term growth potential; they lose their capability of taking necessary economic measures and carrying out reforms as a result of political developments or uncertainties, and they start losing their credibility and capacity of external financing and borrowing, if this situation becomes permanent.
Let us look at Turkey after July 15. With the decisions that were made by the National Security Council (MGK), the liquidation and immobilization of the Gülenist Terrorist Organization (FETÖ) in the state and state institutions will be accelerated. The possibility of military coups in Turkey has completely disappeared with the civil resistance on July 15. The attempted coup has brought democratic social consensus to the highest level in Turkey. This, at the same time, paved the way for a new democratic constitution and prioritized the abolishment of the 1982 Constitution that was issued after the military coup of 1980. In this respect, Turkey is now a more investible and more visible country in economic terms. Turkey's growth potential and capability of finding external financing has reached the highest level in the medium term. From now on, the Turkish economy will be a more outward-oriented, more reliable and more visible economy that will grow faster.
Given that such terrorist attacks started with the 9/11 attacks in the U.S. in 2001, we can understand how robust Turkish economy has remained in the face of the July 15 attack. We know that the U.S. economy was paralyzed after the 9/11 attack, with 1.8 million people losing their jobs within a year following the attack. Although the U.S. Congress granted $15 billion to the aviation sector alone after the attack, it failed to prevent its collapse. Losses in U.S. stock exchanges reached $1.4 trillion within a week following the attack. Furthermore, the U.S. lost five million tourists in 2001 alone.
The Turkish bond market has risen by only 20 basis points since July 15. People flocked to ATMs in the first hours of the attempted coup, however, even ATMs in uncrowded holiday resorts satisfied their demand of cash withdrawal. There was not a serious demand for foreign exchange in the morning that followed the attempted coup. On the contrary, domestic investors sold $2.5 billion. There was not a significant outflow in bank deposits and interest rates hovered between 10.5 percent and 11.5 percent. Moreover, there was not a great leap in the exchange rates on the first Monday after the attempted coup. When we examine 90 countries that have experienced a military coup, attempted coup or great terrorist attack, we do not see an equivalent country to Turkey, which rapidly recovered from the July 15 attempted coup. Interestingly enough, residents' switch from foreign currency to Turkish lira continued until international credit rating agency Moody's announced Turkey's credit score in the afternoon on July 19. Foreign currencies and interest rates did not even experience bubbles. Then why did Moody's examine Turkey in a negative way and say that it might downgrade Turkey's credit rating to the junk level? For now, we cannot explain this situation as continuation of the bloody attempted coup, however, we are watching malevolent initiatives and we consider them to be negative. This being the case, the intention of the international credit rating agencies, the seriousness of which has been questioned by all segments on all levels for a long time, must be further questioned based on this. We cannot help but think whether it could be the task of such agencies to complete the economic aspect of this attempted coup, which politically failed and which is essentially a crime against humanity.
Turkey's resistance will be recorded as a great success not only in the history of Turkey, but also of humanity, as it is also a struggle for economic independence. People who resisted in the streets and squares and stood in front of tanks on the night of the attempted coup and the following nights went to work in the morning and opened their workplaces to turn the wheels of the economy. People looted ATMs when they failed to provide cash during the European crisis in Greece, Portugal and Spain. In other words, there was not a civil war or attempted coup, but an economic crisis in these countries.
A credit rating agency authority says that the July 15 attempted coup has raised Turkey's political risks and that these risks have continued for two years. This is true, as operations and terrorist attacks on Turkey have risen since Dec. 17 and Dec. 25, 2013. The PKK and DAESH terror paved the way for the July 15 attempted coup. The street terrorism, which nearly grew into a civil war before Sept. 12, 1980, opened the way for the military coup of the 1980s. Likewise, this wave of terrorism is what paved the way for the attempted coup on July 15. In short, the attempted coup of July 15 was the bloody finale of an attack against Turkey and President Recep Tayyip Erdoğan that had increased in frequency since 2013. If so, Turkey's political risks have declined since July 15.
Credit rating agencies downgrade the scores of countries based on some criteria. They downgrade their credit scores if they find that there is a significant fall in their medium-term growth potential; they lose their capability of taking necessary economic measures and carrying out reforms as a result of political developments or uncertainties, and they start losing their credibility and capacity of external financing and borrowing, if this situation becomes permanent.
Let us look at Turkey after July 15. With the decisions that were made by the National Security Council (MGK), the liquidation and immobilization of the Gülenist Terrorist Organization (FETÖ) in the state and state institutions will be accelerated. The possibility of military coups in Turkey has completely disappeared with the civil resistance on July 15. The attempted coup has brought democratic social consensus to the highest level in Turkey. This, at the same time, paved the way for a new democratic constitution and prioritized the abolishment of the 1982 Constitution that was issued after the military coup of 1980. In this respect, Turkey is now a more investible and more visible country in economic terms. Turkey's growth potential and capability of finding external financing has reached the highest level in the medium term. From now on, the Turkish economy will be a more outward-oriented, more reliable and more visible economy that will grow faster.