Turkish economy is the perfect showcase for how geo-politics affects economies, or more precisely, how a country’s rejection of subordination in international relations leads to threats of economic sanctions by powerful states
Recent fluctuations in the value of the Turkish Lira have placed Turkish economy in the limelight again. Analysts point at a number of issues, mostly those related to domestic politics or economic management, which may be responsible for the continuation of the economic distress. All these explanations have some merit and there is certainly plenty the Turkish administration should be doing to overcome fragilities.
However, it seems that power relations at the global level and their direct influence on Turkish economy are mostly ignored. I would argue that most of Turkey’s short-term economic troubles are due to the diplomatic conflict with the U.S. over regional issues and continuing threat of sanctions against Turkish economy.
A number of critical events in recent years have put Turkey and the U.S. at odds. The parallels between certain turns in Turkish economy and clashes in the U.S.-Turkey diplomatic relations are difficult to overlook.
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