Saturday, July 23, 2016

Crackdown in Turkey Is an Economic Blow

The predictions of a prolonged recession in the U.K. after word of its exit from the EU were, at least, greatly exaggerated. On the far corner of Europe, though, Turkey really is heading into a recession. The military coup attempt did more damage than the world knew at the time, and the political crackdown now underway has already come perilously close to shutting down the economy. Roughly 100,000 workers have been fired or arrested or have had their licenses to work revoked. So many education workers were removed that schools and universities are effectively not operating. The state of emergency and general turmoil will keep most foreign tourists out of the country for months or years. A weakened military will probably no longer be able to protect the most volatile border zones. Banks and large businesses may not be able to issue bonds for several years. These are not trivial adjustments in an economic sense. Fortunately, the political crackdown has spared agriculture and public utilities. With food and water, there is an opening for the country to survive the tough times ahead and eventually start on the way back to normal.