Economy

The Truth Hurts: Why Turkey’s Decision To Block An IMF Report Exposes More Than It Hides

Editorial: As concerns about the economy deepen, Prime Minister Recep Tayyip Erdogan’s government has blocked publication of the IMF’s latest report on Turkey. It’s the latest sign of a lack of professionalism.

Istanbul market (John Walker)
Istanbul market (John Walker)
Erdal Sağlam

ISTANBUL – The government of Prime Minister Recep Tayyip Erdogan has blocked the public release of the International Monetary Fund's latest report on Turkey. The IMF allows individual governments the right to deny permission to publish a country report if they so choose, though this right is rarely exercised.

So what should we make of the Turkish government preventing the latest report from going public? "Smart governments' seldom exercise this right, which amounts to rejecting transparency. They generally choose to go public with a report even if it is not in their favor because they know that not publishing it will have much greater consequences.

So, does the IMF report contain shocking developments we don't yet know about? Personally, I think it is unlikely that the report contains any criticism we haven't heard or talked about. In all likelihood it mentions the current economic imbalances and weaknesses. These are obvious to everyone.

Bit if there isn't much that is new, whey then would Deputy Prime Minister Ali Babacan and his team have taken such a drastic decision?

What they fear is that, should the report be made public, it will make international investors skittish and put a short-term end to the inflow of foreign capital. This seems to me proof that they do not want to hurt the flow of liquid cash into the country ahead of elections on June 12; hence the nominal measures they have forced the Central Bank to adopt against the current account deficit and inflow of foreign cash.

So, why are exchange rates rising? This is the point that they are missing. Of course there are factors like global economical imbalances, an insufficient increase in production and the ongoing crisis in Greece. But even so, Turkey has been on a negative track for the past month compared to other developing countries.

The foreign capital flow into Turkey has been decreasing in recent months. The reason for this is a growing perception of the risk inherent to the Turkish economy. Earlier expectations that Turkey's economic rating would go up after elections have begun to be replaced by worries that just the opposite could happen.

Clues in the JP Morgan report

So, why did they stop the IMF report from coming out? Herein lies the real amateurishness. Just as with other countries, the IMF likes to see its country reports published and to let investors know about any risks it might see. This has always been the case. The IMF also disapproves of governments that block publication.

Do not imagine that in a situation like this, the IMF simply sits back and keeps quiet. Instead, when asked, it will continue to inform investors curious about risks in Turkey's economic situation.

Just to remind anyone who might launch into a conspiracy theory at this point: the IMF doesn't follow this procedure just for Turkey, but for all countries as part of its international mandate. The IMF's influence over international banks and brokerages is also no secret.

Seen from another perspective, this is the kind of professionalism the IMF expects. If the present Turkish government were made up of professional leaders instead of a bureaucracy of devoted ideological believers, they would understand this attitude.

In sum, this is also the context we can use to view last week's JP Morgan report advising investors to reduce the weight of Turkish holdings in their portfolios. "In Turkey, high inflation, deteriorating current account deficit and relatively complacent policy worries us. The hikes in reserve ratio requirements (RRRs) have cut consensus earnings forecasts for banks," said JPMorgan.

Are these lies? Do we not face mounting risk? Aren't we expecting hard times after the election? Even if the government blocks publication of the IMF report, they cannot prevent the truth from getting out.

photo - John Walker

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Society

What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel

-Essay-

BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.


Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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