ΣΧΕΤΙΚΑ ΑΡΘΡΑ
By Dr Aris Petasis*
This particular article is a continuation of other articles I wrote and in which I support that sound economies rest on democratic government. It is axiomatic for economic models that operate within faulty political systems to become unstable and to falter.
About a year ago a strong supporter of the Annan plan tried to convince me that we ought to hurry and surrender to Turkey via a “bizonal-bicommunal federal” solution…. “before it is too late” (his words.) He then asked me, “do you know where the Turkish economy will be in a year from now?” I responded, “I wouldn’t be surprised if the government of Turkey and its economy collapse a year from now.” My interlocutor’s face turned red with anger and he lost his composure on hearing my forecast which turned things upside-down in his head.
Democracy: The democratic index (of the Economist Intelligence Unit–EIU) classifies Turkey’s political system as “hybrid.” The next class below is that of “autocratic” (the category where Cuba, N. Korea belong). The EUI’s ranking depends primarily on a country’s: level of civil liberties, breadth of political involvement and political culture. The Economist, traditionally friendly with Turkey published the following disturbing information (Economist 2nd February, 2013): a.) one in five generals, or a total of 400 generals, are now in Turkish jails, b.) Turkey bombed and killed 34 Kurdish civilians without any investigation, c.) Turkey’s armed forces to this day do not report to the minister of defense, d.) the internal regulations of the army give it the right to interfere in the political process, e.) in the last 40 years the army overthrew 4 civilian governments (an average of one coup per 15 years,) f.) in one of these coups d’etat 50 civilians were executed and 500,000 were jailed some ultimately dying in jail and g.) in the last 10 years a total of 934 young army conscripts committed suicide (one suicide every 4-5 days for a period of 10 years). The families of some of these unfortunate young men suspect murder. Turkey holds top place in terms of jailed media correspondents. It seems that Turkey and democracy move in opposite directions.
Economy: The sharp fall in the value of the Turkish lira, a dangerous development for an importing country, comes as no surprise considering Turkey’s autocracy and democratic deficit. Within 4 short days of public unrest Turkey’s stock exchange took a tumble and the much vaunted foreign investments began to leave the country. Companies find it difficult to service corporate debt; worse, 2/5 of these debts are in foreign currency. The feet of clay on which the Turkish economic miracle (!) stood have been found wanting.
As a note of encouragement to those of us that are exposed to propaganda in the form of, “let’s hurry to surrender before Turkey grows stronger and at the end giving us worse terms of capitulation than now” I put forward the following for consideration: Turkey’s GDP growth of 4.5% is misleading and does not tell us much about its democratic polity and economy. The core politico-economic fundamentals of Turkey forebode continued economic and political instability: 1.) Turkey operates on the edge of autocracy and therefore cannot stabilize its political system and its economy. Optimistic forecasts about future significant growth rates for MINT countries (Mexico, Indonesia, Nigeria and Turkey) by people such as economist Jim O’Neill are dampened by the ΒΒC’s, “politics (meaning democratic shortfall!) are a challenge for Turkey” (BBC, 06.01.2014), 2.) Turkey’s current account deficit (imports higher than exports) now stands at 8% (same as Greece’s at the start of the crisis), 3.) Turkey’s per capita income, in current values, is a pitiful $10,595 (Cyprus’ stands at $26,389), 4.) Turkey’s distribution of income is similar to that of Turkmenistan with a Gini coefficient of 40.3% (source:CIA) while Cyprus’ Gini coefficient is at 29%. (note: a high Gini coefficient denotes a distorted distribution favoring the rich), 5.) Turkey’s average unemployment rate over the last decades was 11-12% (whilst that of Cyprus was 3.2%), 6.) Turkey’s inflation stands at 7.3% (that of Cyprus at minus 1.3%), 6.) the average monthly salary in Turkey is a meager $1,150 (Cyprus’s stands at $2,800.) (main source of above figures: central banks of Turkey and Cyprus) 7.) the Turkish government tries to intimidate and control the judicial arm whilst Cyprus’ justice system is independent, 8.) the democratic process is constantly violated in Turkey; “I will brake the arms of those that try to undermine me” of the Turkish Prime Minster speaks volumes.
Where do we go from here? Economies of autocratic states are programmed to fail; whilst those in democratic systems, and despite intermittent economic crises, are programmed to do well. Autocratic Turkey invaded Cyprus in 1974 and ruined the economy of its victim. In less than 40 years we see the autocrat aggressor trailing the democrat victim by a long margin. In the above facts one can see our immense reserves of optimism, patriotism, determination to stay free and our legendary resilience. The present economic crisis is just an aberration in our path to greater things. For the first time in centuries we see the geopolitical realities slowly turning in our favour; particularly the geostrategy surrounding our energy reserves. All we need to do now is truly appreciate the new positive realities and immense opportunities and use these to the advantage of a democratic and free Cyprus.
* Dr Aris Petasis, is member of the Board of Trustees, International Fund, Moscow State Aviation University.