Turkey Faces Currency Crisis As COVID-19 Strains Economy
RACHEL MARTIN, HOST:
Turkey has a serious coronavirus problem. So why has the country donated 50 planeloads of medical equipment abroad? Here's NPR's Peter Kenyon.
PETER KENYON, BYLINE: To hear President Recep Tayyip Erdogan and his top deputies tell it, Turkey's citizens should be proud of their country's status as one of the leading donors of anti-coronavirus supplies in the world. Video distributed by the Foreign Ministry shows a Turkish military cargo plane delivering supplies to the U.S., including medical masks, gloves, gowns and other protective equipment. President Recep Tayyip Erdogan called the flights gestures of solidarity with Turkey's NATO allies and others.
But not everyone agreed. A lawmaker from the Anatolian city of Usak tweeted that there were shortages of supplies in hospitals there as well as a need for more masks and protective clothing. Why, he asked, weren't Turkish citizens being taken care of first? At the same time, economists began to point to the sharp drop in Turkey's foreign currency reserves and raising red flags about the value of the Turkish lira. The government's message was, essentially, don't worry.
(SOUNDBITE OF ARCHIVED RECORDING)
MURAT UYSAL: (Speaking Turkish).
KENYON: Turkey's central bank governor stepped forward to focus on a rare bright spot amid the plunge in productivity and consumption. Inflation was also coming down, he said. But economist and political analyst Attila Yesilada says people are increasingly worried that the Turkish currency could suffer a huge drop in value, triggering rising inflation.
ATILLA YESILADA: I think it is now a consensus in the economist community and, more importantly, the trader community that Central Bank reserves are so low that they can't stop an attack on the Turkish lira, and that by itself is a self-fulfilling prophecy.
KENYON: Economists estimate that Turkey could see its GDP shrink by nearly a quarter unless broad and heavy public supports are quickly launched. The economic turmoil and the uncertainty about how long it might last could have serious political consequences for Erdogan.
Elections aren't scheduled until 2023, but some of Erdogan's former top allies have left to set up rival political parties and are preparing to oppose Erdogan's expected bid for another five-year term in office. If party leaders begin to sense that Erdogan is losing what Yesilada calls his magic touch with the voters, there could be a move to bring elections forward, especially, he says, if fears of a currency collapse continue to rise.
YESILADA: Mr. Erdogan has, at most, two or three months to successfully wind down this epidemic as well as to breathe some life into the economy, without a currency crisis.
KENYON: In the meantime, the Turkish Medical Association has called on the government to be more forthcoming about the measures it's taking to combat the pandemic at home.
Peter Kenyon, NPR News, Istanbul.
(SOUNDBITE OF ABAJI FEAT. VARDAN GRIGORYAN'S "HOPE")
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.