🇹🇷 What can stop Turkey's economy from unravelling? | Counting the Cost

  • 🎬 Video
  • ℹ️ Description
🇹🇷 What can stop Turkey's economy from unravelling? | Counting the Cost4.5
Istanbul plays an oversized role in the Turkish economy and politics. It has been the gateway to the presidency for Recep Tayyip Erdogan and represents a third of the country's economy.

After a quarter of a century, Erdogan lost the battle to control the financial capital but controversially another vote to elect the mayor has been planned.

It is just one of a number of issues that has many people and businesses losing faith in the country. After a credit-fuelled boom led to bust many are switching to the dollar. Foreign exchange deposits and funds rose to a record high of $182bn this month.

The lira has fallen about 37 percent since the beginning of 2018, pushing the economy into recession. The central bank has stopped short of implementing capital controls on the way governments limit the flow of money in and out of the country. During the boom years, delivered mostly through property and construction, corporations borrowed in dollars and are now finding it difficult to repay $200bn in loans.

Meanwhile, unemployment has jumped to a decade-high of 14.7 percent and inflation soared to 19.5 percent. The Turkish government has promised a series of financial reforms to revive the economy. But for now, many consumers are struggling to pay for imported goods.

Where did it all go wrong for the economy?

"In 2008, our GDP per capita was above $8,000 and it raised up to $12,000. But today we are below the 2008 numbers," says Durmus Yilmaz, former central bank governor. "The reason behind it is the chosen growth model. You can't be a big economy with the skyscrapers you build in Istanbul, Ankara or Izmir, but they can be your prestige projects."

"Turkey shall never capitulate them. All infrastructure, canal, railway, fast train projects must continue, even with [a] foreign subsidiary. Because these are the essentials of an economy. However, a substantial part of foreign money we received has been allocated to a construction sector that feeds 750 different sub-sectors. This created a boom in the economy. But at the end, your cash flow is in local currency but your debt is in foreign exchange. So we are stuck now."

In order to fix the Turkish economy, he says "our job is to follow token economy policies and build up the country's interest accordingly. As the opposition, we and others say the finance and treasury minister, the president's son-in-law, should resign. But this will not resolve the problem. This is a systemic issue. This system has paralysed the decision-making process in the economy. If you monopolise the authority, that person manages all."

"We have to address the key trigger of the problem, which is this new presidential system, which is unique to Turkey. Our institutions are now paralysed. We need to rebuild our system by introducing a rule-based system in line with universal law, separation of powers, checks and balances. Otherwise, I believe the current system will self-terminate," Yilmaz says.

Mozambique's debt crisis
Mozambique is hoping to secure billions of dollars for reconstruction after the devastation of cyclones Idai and Kenneth. Cyclone Idai alone left more than 600 people dead and about 1.8 million people in need.

According to the United Nations, Mozambique needs $3.2bn for post-cyclone reconstruction. The International Monetary Fund (IMF) says growth could slow to at least 1.8 percent from 3.5 percent from losses to agriculture, transport and communications. Food shortages in Beira, one of the hardest-hit cities, and surrounding areas could push prices up 8.5 percent from 5.5 percent.

Mozambique's port of Beira is an important hub for the country, as well as for neighbouring Malawi and Zimbabwe. But it is not operating right now. And according to the finance ministry, most homes, hospitals and schools had suffered large-scale destruction.

A debt crisis has complicated Mozambique's finances.

In 2016, it admitted to $1.4bn in undisclosed funding. That prompted the IMF to cut off support, triggering a currency collapse and debt default. It has little hope of repaying the debt.

In 2017, the debt-to-GDP ratio was 112 percent. By 2022, the IMF forecasts that it could climb to over 130 percent. But the country is resource rich. It hopes to become the next liquified natural gas powerhouse. By 2025, Mozambique is on track to invest $128bn. But it would still be many many years before it gets over its debt crisis and begins to reap the benefit of the gas.

More from Counting the Cost on:

Download — 🇹🇷 What can stop Turkey's economy from unravelling? | Counting the Cost

Download video
💬 Comments on the video

When a country starts to import everything specially food, this problem will prevail. Dont copy other countries on outrageous development to look like its progressing for that is a mistake. I know the Turkish people are hardworker, they can get through this phenomenon.

Author — Angel Grace


I want to buy products made in different countries, not made in China only. I am sick and tired to buy made in China products.

Author — Doogie Chen


Onions can not unravell Turkish economy. If we can't find onions we will eat cakes!

Author — Henry Kissinger


Cheaper vacations in Turkey then, I guess :-)

Author — zapfanzapfan


assalamualaikum I am from India God bless Turkey don't worry Allah will help you don't trust foreign countries you please tighup with Arab nations

Author — Mohamed Akbar



Author — Steven Obinator


Turkey was poor until 2000’s so if they go back to being poor its not a big deal for them.

Author — Ben Does Dabs


Durmus yilmaz words cant be trusted, his hate towards the rulling party may influence what he says .

Author — mk bijnaam


Taht Isaac Laian guy is 100% Iranian xD

Author — Micober Ss


Make peace with the Iraqi people. Allow water to flow to neighboring countries. Make Iraq a trading partner.

Author — MrZeeshawn


Turkish citizens should sue trump for economic war behavior.

Author — Peter Wang


In China 1000 shops are closing every day one bigs cities. China suffers a lots.

Author — Sonam Gyaltso


Hey Turkey continue to make China & Russia great again

Author — DriM BiG


Turkey's collapse is already here. All they are trying to do is make it look like its solid but it's just not going to hold anymore. They are so deep in the red that its already shown up in the publications. Now the globe is calling their bluff and cashing in now or threatening war. That's why they had the coup attempt.

Author — D. R.


Turkey will ride fine if only on the expectation of 2023. The Turks know Macroeconomics well and better than most. Temporary hiccups are inherent in the system.



What can stop unravelling? Very simple - replacement of the sick islamo-fanatic in the head by somebody who will reinvest dividends of 10 good years back to the economy and not use it to support islamic oppositions and regeemes allover the region in order to feel modern chaleef, while ruining the relationships with ex-partners (Egypt, Israel).

Author — Flat Jicinska


Every where in the globe from EU, North/South America, South/Far East Asia, Middle East to Africa are all facing similar economic slowdown and Turkey isn't ammune this world wide phenomenon. I'm very confident Turkey will overcome this economic hiccup.239

Author — Moe Osman


Apparently Trump is clueless in economy and trade, only thing people hoped he knows at least.

Author — multisphere1


Regarding Turkish economy, dont get too big too quickly, dont borrow too much abroad, dont sail too close to the wind. Drum up some business with this new trade group that includes Russia

Author — Nancy Hobson


Call the moving truck western companies you waited a year already to see if there would be a deal with china it will only get worse when tge CCP starts to harass your company time to leave you dont want to-be there when chinas economy starts to tumble leave now ao ypu can get ahead of other companies who waisting there time believing things will change

Author — X ShockWaveAMG