How Turkey's Economic Problems Are Viewed In Istanbul

Aug 14, 2018
Originally published on August 14, 2018 8:15 pm
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The economy of Turkey is at the center of global financial concern. Its currency has lost some 40 percent of its value this year. That includes a steep slide this week causing prices to rise. Meanwhile, tensions with Washington led President Trump to slap heavy tariffs on some products from the NATO ally. NPR's Peter Kenyon reports on how the economic problems are viewed in Istanbul.

PETER KENYON, BYLINE: In 2010 when I changed U.S. dollars for Turkish lira, the rate was about 1 1/2 lira to the dollar. Those days are well and truly over. The money changers' large signs show the lira currently hovering near seven to the dollar, which is great if you're a tourist spending hard currency like Rouba Abu-Saud visiting with her husband from Jordan.

ROUBA ABU-SAUD: But the price is good, yeah, not so much expensive. It's fair.

KENYON: But for Turkish consumers and shop owners, it's a different story. Mehmet Ersan says he's happy to talk, but first he wants to make one thing clear. He pulls money out of his pocket to prove it's all in Turkish lira, saying President Recep Tayyip Erdogan asked people to sell their foreign currency, and he did. He says Erdogan is absolutely right to stand up to Donald Trump and his punitive tariffs.

MEHMET ERSAN: (Through interpreter) You know, I'm 63 years old, and Erdogan is the best prime minister and president I've ever seen.

KENYON: But when asked if the currency crisis is having any effect on his friends who own the shops on this part of the street, Ersan says he knows most of them, and there's plenty of reason to worry. He says, thank God the tourists keep coming.

ERSAN: (Through interpreter) You know, the way things are these days, if the Arab tourists didn't come, the shopkeepers would be going hungry. I swear, if they didn't come, people would be going hungry.

KENYON: The biggest source of tension at the moment is an American pastor, Andrew Brunson, who's on trial for espionage in western Turkey. The U.S. wants him released and wasn't satisfied when Brunson was moved from prison to house arrest. That prompted Trump to order tariffs on Turkish steel increase to a painful 50 percent. Erdogan took to the stump to voice his angry defiance.

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PRESIDENT RECEP TAYYIP ERDOGAN: (Through interpreter) You work with us in Afghanistan, Somalia and NATO, and then you go stab your partner in the back. You call this acceptable.

KENYON: Erdogan added more threats today, speaking of boycotting U.S. products such as Apple iPhones. But as the currency stays near historic lows, more questions about Erdogan's handling of the economy are being heard. Omer, a 42-year-old who manages a shop selling Turkish delight and tea, declines to give his last name for fear of retaliation. But he says Erdogan's economic vision seems to consist of a series of mega construction projects which Omer sees as a giant waste of money.

OMER: (Through interpreter) I don't believe the currency crisis was caused by foreign intervention. Fundamentally it's the result of a wasteful economy.

KENYON: Meanwhile, many people here don't see the currency crisis as a reason to panic. There are no runs on banks or shortages in the shopping markets. And despite the tough talk from Erdogan, people think there may yet be movement in Pastor Brunson's case. He's been visited by a senior U.S. diplomat, and his lawyers made another plea for his release. Whether a resolution to the Brunson case would bring an end to Turkey's currency crisis, though, is far from clear. Peter Kenyon, NPR News, Istanbul.

(SOUNDBITE OF SHOOK'S "TRACES") Transcript provided by NPR, Copyright NPR.