Opinion |

A Turkish Fantasyland and an Israeli Nightmare

Turkey’s mix of make-believe statistics and political repression is going to end badly. Israelis shouldn’t be so confident it couldn’t happen to us

David Rosenberg
David Rosenberg
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Turkey's President Recep Tayyip Erdogan, delivers a speech during a rally of supporters a day after the referendum, outside the Presidential Palace, in Ankara, Turkey, Monday, April 17, 2017.
Turkey's President Recep Tayyip Erdogan, delivers a speech during a rally of supporters a day after the referendum, outside the Presidential Palace, in Ankara, Turkey, Monday, April 17, 2017.Credit: Burhan Ozbilici/AP
David Rosenberg
David Rosenberg

Walt Disney Company hasn’t opened a Magic Kingdom in Istanbul, but Turkey doesn’t really need one: President Recep Tayyip Erdogan’s government presides over a Fantasyland of its own. In Erdoganland, the economy is growing by leaps and bounds, the money is free and easy, and the only statistics are the ones you close your eyes and wish for.

Turkish gross domestic product officially grew 5% year on year in the first quarter – a rate of growth far in excess of what economists expected, and, on the surface, a remarkable comeback for an economy hit hard by last year’s coup.

“I hope we have left the worst behind. In all areas, we have been moving forward,” said Erdogan, playing the same role as Mickey Mouse does in Disneyland, as the happy parade’s drummer extraordinaire.

Of course, there’s a big difference. The Disney rodent hasn’t summarily dismissed 150,000 civil servants and army officers as suspected enemies of the state. He hasn’t removed thousands of judges, prosecutors and academics, or seized hundreds of businesses as part of a post-coup crackdown.

Also, tickets to Disneyland may be steep, but speech is free. And as much as Mickey’s employer’s stock-in-trade is make-believe, the company doesn’t cook its books as Turkey has.

Let's make believe

Last year, the government’s statistics bureau suddenly announced it was changing the way it calculates economic data, throwing away the conventional tools statisticians use, which suddenly made the economy a fifth bigger than it had been. For Erdogan, however, that wasn’t enough, especially as real growth remained sluggish. To get the numbers that would make the Turks continue to feel good, he’s turned to a dangerous game of deficit spending and easy credit.

As a June 22 Bloomberg News report noted, the government has provided $50 billion in guarantees for bank loans for businesses. A new sovereign wealth fund is being used to finance high-profile infrastructure projects. And borrowing has surged 22% since the coup.

All of this largesse increased the first-quarter GDP, which was lifted by a 9.4% jump in government spending and a 5.1% increase in consumer spending.

Exports were up even more, but that should be no surprise, considered the lira has tanked.

None of this is any way to run an economy.

Borrowing-and-spending parties like this always end with a hangover of unpayable debt, failed businesses and rising unemployment. But from Erdogan’s point of view, what matters is that the party keeps acting hardy until elections in 2019, at which point happy Turkish voters will return him and his AKP Party to office.

Meanwhile, in Nightmareland

Erdogan’s economic Fantasyland sits side by side with another attraction you can call Nightmareland. It’s a world where Turkey is threatened by enemies at home and abroad who have to be crushed at all costs.

The coup fit snugly into this worldview and has been the excuse for a perpetual state of emergency and a marketing tool for the constitutional reforms Turks approved in April giving Erdogan unprecedented power.

The president insists he needs that power to defend the country, but the use he has made of it is actually destroying the Turkish economic miracle that began about the time he came to power. Foreign investors, who Turkey desperately needs to help offset a gaping current account deficit, have shunned the country.

As one observed, “Few foreign investors are concerned about democracy and human rights, but they are very concerned about economic stability and the rule of law because they want to make sure their money is safe.”

Even Turkish businesses are having second thoughts about how much they want to be in Erdogan’s Nightmareland and have begun moving operations to other countries.

Turkey’s troubles may seem to be irrelevant to us here in Israel.

After all, our economy’s growth has a firm foundation based on real statistics. There is a borrowing binge underway that could become dangerous, but no one accuses the government of engineering it. Foreign investment is growing, with Intel’s $15.3 billion purchase of Mobileye a case in point: No one is nervous about putting their money in Israel and businesses aren’t fleeing. Finance Minister Moshe Kahlon’s tax cuts have the whiff of election economics, but they aren’t a danger to the economy.

But there was a time not too long ago when Erdogan was hailed as a responsible leader and an example of how Islam and democracy could go hand in hand. It all changed in the space of a few years, into a Turkey of repressive politics and crony capitalism, which are more natural partners than Islam and democracy.

Israel is in a perpetual struggle with crony capitalism, as the investigation into Netanyahu buddy Shaul Elovitch’s dealings with the Bezeq phone company just revealed. Meanwhile, the right seems intent on reining in freedom of expression. So far, that drive has been to little effect, but the trend is there, as is the desire. It’s not impossible to imagine Israel becoming a Nightmareland of perpetual campaigns against internal enemies and a Fantasyland of a single narrative of Zionist virtue and an ever-growing economy that pretends to benefit all while it enriches the powerful. We’re too close to that to ignore the danger.

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