November 5, 2018
Volume 13, Issue 1
Foreign Policy and International Relations Club
Dış Politika ve Uluslararası İlişkiler Topluluğu
Trump administration to reinstate all Iran sanctions The Trump administration is to reinstate all US sanctions on Iran removed under the 2015 nuclear deal.
put on the sanctions list, including major banks, oil exporters and shipping companies. US Treasury Secretary Steven Mnuchin also said that the Brussels-based Swift network for Washington is to reintroduce the making international payments was sanctions on Monday 5 November. expected to cut off links with targeted President Donald Trump withdrew Iranian institutions. Being disconnecfrom the agreement in May, describing it as "defective at its core" because it had not stopped Iran developing a ballistic missile programme and intervening in neighbouring countries. The agreement saw Iran limit its controversial nuclear activities in exchange for sanctions relief. Barack Obama, the US president at the time, had argued the deal would prevent Iran from developing nuclear arms.
The US has been gradually reimposing sanctions, but analysts say this move is the most important because it targets the core sectors of Iran's economy. The sanctions will cover shipping, shipbuilding, finance and energy. More than 700 individuals, entities, vessels and aircraft will be
Iran's Supreme Leader Ayatollah Ali Khamenei said the move "disgraced" US prestige and liberal democracy. "The challenge between the US and Iran has lasted for 40 years so far and the US has made various efforts against us: military, economic and media warfare," Mr Khamenei wrote on Twitter. "This new US president has disgraced the remnant of America's prestige," he said, adding that "America today is far weaker", suggesting that US military power was beginning to "wane and deteriorate".
Iran’s foreign ministry spokesman Bahram Qasemi told state TV that Iran had "the knowledge and the cated from Swift would almost comple- pability to manage the country's ecotely isolate Iran from the international nomic affairs". financial system. US Secretary of State Mike Pompeo set out 12 de- Meanwhile, EU states that backed the mands that Iran must meet if sancti- nuclear deal have said they will proons are to be lifted - including ending tect EU firms doing "legitimate" busisupport for militants and completely ness with Iran. BBC / November 3, ballistic missile development. 2018
THIS WEEK
EUROPE Page - 2
ASIA & PACIFIC Page - 3
OPINIONS Page - 4-5
MIDDLE EAST & AFRICA Page - 6
AMERICAS Page - 7
OPINIONS Page - 8-9
TURKEY Page - 10
ECONOMY & BUSINESS Page - 11
EDITORIAL Page - 12
EUROPE Angela Merkel to step down as German chancellor in 2021 Germany's Angela Merkel has said she will step down as chancellor in 2021, following recent election setbacks. "I will not be seeking any political post after my term ends," she told a news conference in Berlin. She also said she would not seek re-election as leader of the centre-right CDU party in December. She has held the post since 2000. The CDU was severely weakened in elections held on October 28 in the state of Hesse, the latest in a series of setbacks. Both the CDU and its national coalition partners, the Social Democrats, were 10 percentage points down on the previous poll there. Parties like the left-leaning Greens and the far-right, anti-immigration AfD have grown in national support following the 2017 general election, as backing for the major centre parties has waned. Mrs Merkel said she took "full responsibility" for poor performance. "As chancellor and leader of the CDU I'm politically responsible for everything, for successes and for failures," she said. She also made it clear she would not handpick her successor as party leader and would "accept any democratic decision taken by my party". Annegret Kramp-Karrenbauer would be the obvious choice for Merkel loyalists to replace her. She is currently the party secretary. However, Health Minister Jens Spahn, a leading critic of the chancellor's open-door migration policies, has also announced his candidacy. BBC / October 28, 2018
Ukrainian President Petro Poroshenko met with Ecumenical Patriarch Bartholomew I in Istanbul Saturday, where the two signed an accord paving the way for the independence of the Ukrainian Orthodox Church from Russia. The Moscow church called the accord "catastrophic.” DW / November 3, 2018 Spanish prosecutors have called for former Catalan Vice President Oriol Junqueras to be imprisoned for 25 years on charges of rebellion and misuse of public funds, the highest prison term being sought for separatist leaders who pushed for the region's independence last year. Al jazeera / November 2, 2018 Denmark has recalled its ambassador to Iran after it accused Tehran of plotting a foiled "attack" against three Iranians living in the Scandinavian country. Al jazeera / October 30
Hungarian government offers help to Turkey’s Judicial reform Hungary is ready to provide Turkey with all assistance to that country’s efforts to reform the rule of law and its judiciary. Hungary has the experience through which public trust in the judiciary could be strengthened, Trócsányi said, adding that the government is also ready to share with Turkey its experience on the introduction of new court procedures. The Turkish judicial reform is aimed at making procedures shorter and more effective, digitisation, as well as promoting mediation rather than filling suits, Trócsányi said. The Turkish justice minister welcomed the Hungarian oer and expressed his wish to visit Budapest next spring. Daily News Hungary / November 2, 2018
Brexit: UK and EU solve Northern Irish border status British Prime Minister Theresa May is reportedly planning to present the plan to her Cabinet on Tuesday. It would potentially solve one of the thorniest problems plaguing the Brexit talks. Britain and the European Union have reportedly agreed to a compromise that would avoid a hard Irish border after Britain leaves the bloc in March 2019. The legally binding deal would see Britain remain temporarily in the EU's customs union. Membership of the customs union would solve one of the biggest stumbling blocks in the Brexit negotiations by ensuring no border checks between Northern Ireland and the Republic of Ireland. British Prime Minister Theresa May is reportedly planning to present the compromise deal to her cabinet on November 6. It would also avoid the need for an EU-backed "backstop" proposal that Britain has dismissed. That proposal would keep both Irish territories in the same trading area, but separate Northern Ireland from the rest of Britain. DW / November 4, 2018 2
ASIA & PACIFIC Political Crisis in Sri Lanka Sacked Sri Lankan leader's party denounces November 14 as 'too late' to resolve protracted crisis over rival PMs. Sri Lanka's President Maithripala Sirisena has ordered parliament to reconvene in 10 days, drawing sharp criticism from the party of the country's sacked prime minister which decried it as "too late". The announcement came amid mounting pressure to let legislators hold a vote in order to resolve a protracted political crisis over two rival prime ministers. Sirisena had suspended parliamentary proceedings until November 16 after abruptly firing Prime Minister Ranil Wickremesinghe last week and replacing him with Mahinda Rajapaksa, a controversial former president. Mangala Samaraweera, a member of Wickremesinghe's United National Party (UNP), condemned Sirisena's decision to recall parliament two days prior to the initial suspension order, saying it was "an eyewash to appease the ever increasing" international and local pressure. The United Nations and many Western countries had urged Sirisena to summon the House immediately, after Wickremesinghe called his October 26 sacking "unconstitutional" and refused to step down. The deposed leader has demanded a vote to prove his majority. But in recent days, a steady stream of defections has eroded his narrow majority in the 225-member House. Meanwhile, hundreds of people rallied in Colombo earlier on Sunday, calling Sirisena's actions "an attack on democracy" and protesting against allegations that legislators were being offered millions of dollars to switch support amid the intensified horse-trading between political parties. Al Jazeera / November 4, 2018
Flight JT610 of Indonesian Lion Air airline, heading to the Indonesian city of Pangkal Pinang, lost contact with the traffic control early Monday shortly after departing from the Indonesian capital of Jakarta. Later, the plane was reported to fell into the sea shortly after taking off. All 189 people on board the aircraft died in the accident. The authorities launched an investigation into the crash. Sputnik / November 4, 2018
Chinese vice president meets visiting Pakistani prime minister Chinese vice president Wang said that Pakistan is China's only all-weather strategic cooperative partner. The friendship between the two countries has stood the test of time and has always enjoyed strong vitality. China will continue to place Pakistan in the priority direction of neighboring diplomacy, said Wang, pledging to work with Pakistan to maintain frequent exchanges of high-level visits and meetings, strengthen strategic communication and further enrich and expand the China-Pakistan Economic Corridor construction. Khan said that Pakistan is deeply proud of the bilateral friendship and always adheres to a friendly policy towards China. He said that the Pakistani side admires China's achievements in reform and development. Xinhua / November 4, 2018
Pakistan works to stop Asia Bibi leaving after blasphemy protests Administration accused of signing Bibi’s ‘death warrant’ in deal with hardliners. Pakistan’s government has been accused of signing the “death warrant” of Asia Bibi after it said it would begin the process of preventing her leaving the country. Bibi, a Christian farm labourer, was acquitted of blasphemy on Wednesday. She had spent eight years on death row after she drank from the same cup as a Muslim, prompting false allegations that she insulted the prophet Muhammad. Bibi’s lawyer, Saif-ul-Mulook, has reportedly since fled the country amid fears for his life, telling AFP: “I need to stay alive as I still have to fight the legal battle for Asia Bibi.” The ruling Pakistan Tehreek-e-Insaf (PTI) administration signed an agreement with the anti-blasphemy group Tehreek-e-Labbaik Pakistan (TLP) on Friday night, giving in to many of its demands in the face of massive, countrywide protests calling for Bibi to be put to death. In a document signed by the PTI’s religious affairs minister and the TLP’s second-in-command, Pir Afzal Qadri, the government promised not to oppose a court petition to reverse Bibi’s release. It also pledged to work in the meantime to put her name on the exit control list (ECL) which would prevent her leaving the country. The Guardian / November 3, 2018 3
OPINION Angela Merkel Resigns: A Surprise or ‘Too Little Too Late’? In a recent turn of events, the ‘Iron Chancellor’ of Germany, Angela Merkel, has decided to step down from the leadership of her party CDU in December, and from the German Chancellery in 2021. This announcement was a shock to some, while some stated that it was a decision taken ‘too little too late’. For myself, after the initial surprise, I came to notice the reasoning behind Mrs Merkel’s decision. Initially, it is very hard to understand why Merkel resigned. Germany, since 2005 when she came to power, has economically and politically grown considerably. German economy leads the European Union, and so does the country Oğuzhan Sabuncu lead the Union politically. Despite such figures and facts, the leader of GerPolitical Science and Pub- many in times of growth has decided to gradually step down. What could be the lic Administration reason behind this? sabuncuoguzhan@gmail.com
The latest general elections in Germany gave a strong signal about Merkel and her party’s (CDU/CSU) dwindling popularity. Having forced to try out many different formulas for a coalition, Merkel could not manage to form it with many minority parties (which would be called the ‘Jamaica Coalition’ due to its colours). Eventually, she had to turn to their rivals, the Social Democrats to establish a grand coalition to form a government. However, as I have mentioned before, this was a particular point in Merkel’s political presence as it became apparent that the German public had started to turn away from her. Noticing this, the lack of support to her party and policies, Mrs Merkel made a relatively late but wise decision to give up on her post in her party. Her decision to continue until 2021, however, may not see out the due date since the loss of support to her European policies and immigration decisions may cause popular unrest and accelerate her complete resignation procedure. In addition to the simple explanation of the loss of popularity, it is argued by some that the way politicians carry out the politics has disenchanted the voters. Politicians of the major parties are seen to be seeking for their own interests, rather than those of the public. Furthermore, politics of identity have undermined the notion of loyalty to the major, established parties which represent ideologies, not the fragments of identity that the voters may relate themselves with. Combining all of these reasons, it becomes easier to understand why Merkel decided to step down from her posts. She is rumoured to support the idea that the party needs a new face to re-consolidate the voters and carry on with the policies for the sake of Germany, and even Europe itself. Regardless of whomever that will become the next Chancellor of Germany, it would not be wrong to predict that her skills as a negotiator, and solid and strong attitude will be missed, especially in international politics. It will be interesting to observe how Germany and the European Union will navigate through during the times of the “rise of populism/far-right” without the captaincy of Angela Merkel.
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OPINION A Brief Explanation of the Messages of the Turkish Central Bank Recently, the central bank of Turkey updated its inflation expectations for the end of the year. It is indicated that the monetary tightening policy should be continued further. According to Murat Çetinkaya, Head of Central Bank of Turkey, such a policy is an important figure to support the economy. Other headlines are about what an average follower of Turkish economy can guess: degree of pass-through is high, medium range target is kept at 5%, Central Bank of Turkey wants to start the disinflation as soon as possible etc. These sentences are important; however, it seems the disinflation period is not likely to be starting soon. What Mr. Çetinkaya implies is there are no reason for disinflation to start soon since the expectations and explanations he made during his presentation is indicating a different scenario than the government advertises. There is no clear statement about the overall effects of the new economy program to the economy. He only said that the Central Bank is expecting its positive effects to be seen on economy in November. Another important aspect is that he said the degree of pass-through is above the historical average. This can alone hamper the growth and increase inflation. Degree of pass-through is a problem for central banks since they cannot prevent it with the tools they have. It is directly added up in inflation. High degree of pass-through is a systematic problem for Turkish economy since it is dependent on raw materials, intermediaMert Malkoç te products and especially energy. According to him, the pricing is shaped by considering exchange rates higher than historical levels tested before. This sentence is stating a failure. If Business Administthe pricing behaviour indicates an overall higher-than-average inflation expectation or exchange ration rate expectation, then this means Central Bank is failing to manage the expectations which is important to ensure the soundness of the economy. It would be unrealistic to expect that people Malthink Central Bank is timing its moves strategically. The late decisions to increase the interest koc.mert@metu.edu rates is likely to be the most important reason behind such panicky moves in the economy. This .tr is also related to the pressure on the Central Bank by the government. When the exchange rate skyrocketed, people expected an increase on interest rates to be implemented; however, when central banks do such moves that are slow to react what is going on in the economy, it reduces the impact of the move. After a point, everyone realizes that the depreciation is too high to be tolerated, they make their move to avoid losses and after that point, the effects of the policy rate changes have lesser effects than the rightly timed one. Trust has the utmost importance for central banks since they rely on it. If people expect a decrease in inflation, then they make their moves accordingly. In most cases, this is more important than inflation itself. If people trust the central bank of the country, even with the high levels of inflation, the overall trust to the central bank makes it easier to solve the issues. Otherwise panic may prevail, and efficiency of policies may reduce. If we look from the government’s point of view, it does not want to lose its strong argument about growth rate that they achieved previously. However, if they do not make a real move about the inflation, the situation may end up in a much worse position than they dream off. They can push the limits if they want but all economies have a capacity. If they do not give importance to the overall condition of the economy, then it will rearrange itself accordingly. All economies are dynamic and changes continuously. An overheated economy only causes problems. Inefficiency is the most visible one in Turkish case. The exhaustion of resources causes an increase in prices that result in inflation. An effective inflationary policy is what the Turkish economy needs. Government should let the economy to slow down for a while to prevent further increases in inflation. However, we should indicate that all the short-term moves against inflation is to gain time for the long-term moves. Increase in interest rates is not a long-term solution for the economy also. Now the borrowing is much more expensive than it was 4-5 years ago. The Fed is increasing its interest rates and the European Central Bank will also start doing so in 2019. With the high fluctuation of the Turkish economy added, it can be inferred that it is much harder to innovate, create value. Moreover, Turkey should reform its educational system, invest on long-term projects, reform its legal system, follow a more consistent policy regarding international relations. Basically, the country needs to create incentives and enthusiasm in its economy to be more stable and attract investors. To sum up, the Central Bank of Turkey indicates that it moves with the incentive to ensure the financial stability. Also, it seems that it does not believe the new economy program will make a difference for the system. The overall picture of the economy tells us that the inflationary pressure will continue for a while since the policy of the central bank has time lag, it requires some time to be efficient. High degree of pass-through and pricing behaviours may pose some problems regarding inflation. One should not forget that there is a time lag between the implementation and the effect. However, all these problems would have been less if the central bank made the right moves at the right time. There is a long path ahead for the Turkish economy, first it should solve short-term problems such as high depreciation, high inflation, then it should focus on structural reforms which are likely to be much costlier than before. The opportunity to do these moves were imminent when the quantitative easing policy was first implemented; however, now it is lost, and Turkish economy should invest much more effort for these reforms, if it is willing to do so.
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MIDDLE EAST & AFRICA US defence chief demands Yemen ceasefire; peace talks in 30 days James Mattis says the US has watched the bloody conflict 'long enough' and he wants 'dropping of bombs' to stop. Top American officials called for a ceasefire in Yemen and demanded warring parties immediately come to the negotiating table. "We have got to move toward a peace effort here, and we can't say we are going to do it sometime in the future and we need to be doing this in the next 30 days.", Mattis said. The US Secretary of State Mike Pompeo later called on the Saudi-Emirati coalition to stop air attacks in populated areas in Yemen. Pompeo said the "time is now for the cessation of hostilities" in the war-plagued country. Also, Mattis said the United States is calling for all factions to meet United Nations Special Envoy Martin Griffiths in Sweden in November and "come to a solution". Saudi Arabia and its allies intervened in the conflict between embattled Yemeni President Abd-Rabbu Mansour Hadi, whose government is recognised by the United Nations, and the Houthis in 2015. At least 10,000 people have since been killed and the country that now stands at the brink of famine that threatens an estimated 13 million.The UN says Yemen could become the worst humanitarian catastrophe the world has seen in 100 years. Al Jazeera / November 1, 2018 Brazil's President-elect Jair Bolsonaro has told an Israeli newspaper he intends to defy the Palestinians and most of the world by moving his country's embassy from Tel Aviv to Jerusalem. Brazil would become the second major country after the United States to do so. Al Jazeera / November 1, 2018 The movement of a jailed Nigerian Shia cleric whose followers have repeatedly been targeted by the authorities said. on Wednesday security forces had killed 42 of its members during two days of violent crackdowns on protests. TRT World / November 1, 2018 Damascus will cooperate with Geir Pedersen, new UN special envoy for Syria, if he does not use the methods that outgoing envoy Staffan de Mistura did, Syrian Deputy Foreign Minister Faisal Mekdad said. Sputnik / November 4.
Bahrain opposition leader sentenced to life in prison Bahrain's opposition leader, Sheikh Ali Salman, has been handed a life sentence after the Court of Appeal found him guilty of spying for Qatar. The ruling comes just months after the Bahraini High Court of First Tier acquitted Salman of the charge of "colluding" with the rival state. Human rights group Amnesty has described the decision as a "travesty of justice" amid Bahrain's "continued crackdown on dissent". "Ali Salman, who led the now outlawed Al-Wefaq movement, was accused of plotting with Qatar to stoke anti-government unrest in 2011, along with fellow opposition leaders Hassan Sultan and Ali al-Aswad. They have also received life sentences. BBC / November 4, 2018
Egypt security forces kill 19 suspects linked to Coptic attack Suspects were involved in killing seven Coptic Christian pilgrims in Minya province on Friday, interior ministry says. Egyptian security forces have killed 19 people linked to a deadly attack on Coptic Christians, according to the interior ministry. The suspects were killed in a gunfight in the desert of Minya province in central Egypt after security forces pursued them. Those killed were part of the group that killed seven Coptic Christian pilgrims in the same province on Friday. ISIS claimed responsibility for the attack, although it provided no evidence of its involvement. Friday's attack was the latest in a string of assaults against the minority Coptic community. They are the Middle East's largest Christian community and have long complained of persecution and insufficient protection. In December 2017, a gunman killed 11 people at a church and a Christian-owned shop near Cairo.More than 100 Copts have been killed in such attacks since 2011. AP / November 4, 2018
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AMERICAS Trump Administration Tightens Sanctions Against Cuba and Venezuela New U.S. penalties target Caracas’s trade in gold; Bolton calls two nations, along with Nicaragua, the troika of tyranny.
The Trump administration unveiled new sanctions against Cuba and Venezuela, part of an effort to target what White House national-security adviser John Bolton called a “troika of tyranny” that includes Nicaragua. Bolton praised Latin American leaders such as Brazil’s newly elected conservative firebrand, Jair Bolsonaro, as “positive signs for the future of the region,” but said the three targeted countries are being singled out for political oppression and humanrights violations. Bolton said the State Department has added more than two dozen entities owned or controlled by the Cuban military and intelligence services to a sanctions list putting any financial dealings with them off limits to Americans or U.S. companies. Nearly 200 agencies, companies and hotels already are on the list. Trump issued an executive order on Thursday expanding on a series of sanctions the White House has leveled against Venezuela by barring U.S. individuals and companies from dealing with Venezuela’s gold sector. The Nicaraguan regime, Mr. Bolton said, “will feel the full weight of America’s robust sanctions regime” in response to its repression of its citizens, he said. The Trump administration in July imposed sanctions on Nicaraguan government officials for violence against political demonstrators that left hundreds dead. Venezuela condemned the new sanctions imposed by the United States on Venezuela's gold exports. In the statement, It was said that "The arrogant attitude of the imperialist believing that its sanctions will subdue the people of Venezuela doesn't surprise us.” The Wall Street Journal / November 1, 2018 Brazil’s president-elect Jair Bolsonaro announced that his future Minister of Science and Technology would be the astronaut Marcos Pontes. Pontes, who became the first Brazilian astronaut during the Lula administration, were at a certain point considered to be Bolsonaro's running mate. Folha/Nov. 2, 2018 Keiko Fujimori, head of Peru's opposition was arrested on charges of money laundering stemming from illegal campaign financing. Under a court order, she will be held in detention for 36 months as the investigation continues. Xinhua November 1, 2018 Donald Trump has announced he plans to terminate the right to citizenship for babies born on US soil to noncitizens. “It was always told to me you need a constitutional amendment,” Mr Trump told . “Guess what, you don’t.” Independent / October 31, 2018
Jair Bolsonaro elected president in Brazil New president-elect Jair Bolsonaro promises to be a "defender of the Constitution, of democracy, and of freedom." Right-wing candidate Jair Bolsonaro has been elected the next president of Brazil, winning 55 percent of the vote over his leftist rival, Fernando Haddad, who tallied 45 percent. In total, approximately ten million votes separated the two candidates with over 57 million voters going for Bolsonaro while some 47 million went with Haddad. In his victory speech, Bolsobaro said that “this government will be a defender of the Constitution, of democracy, and of freedom.” “This is a promise,” he exclaimed, “not from some party, it is not the vain word of a man, it is an oath to God,” he added. The Rio Times / October 29, 2018
Ecuador warns Assange over new rules Ecuador could revoke the asylum status granted to WikiLeaks founder Julian Assange if he fails to abide by new regulations governing his stay at the Ecuadorian Embassy in London. "If Mr. Assange doesn't comply with these rules, obviously the Ecuadorian government will be able to reconsider its decision of having granted him asylum and revoke it," Attorney General Inigo Salvador said. It was the latest sign of rising tensions between Ecuador and Assange, who has been held at the embassy since 2012, when the previous Ecuadorian administration granted the anti-secrecy activist political asylum. Though the original Swedish allegations of sexual misconduct that drove Assange to seek asylum have long since been dropped, the British said they will arrest him as soon as he sets foot outside the embassy for having violated his parole terms. Assange, who denies the allegations, believes the ultimate goal is to extradite him to the United States to stand trial for revealing state secrets. In December 2017, Ecuador granted Assange citizenship and requested that Britain give him diplomatic status, which was refused. Xinhua / November 1, 2018 7
OPINION The new danger for Middle East
Kağan Dağdeviren Political Science and Public Administration
Prince Mohammed Bin Salman (MBS), the Crown Prince of Saudi Arabia, can be the new King after his father’s dead. When people around the world saw him, there was no widespread opinion about him due to lack of information, but after his bold reforms ,especially on women rights, Westerners have thought that he was the man who can change the Saudi Arabia and make it a contemporary country. But his plan to impose embargo against Qatar, the war led by Saudi Arabia in Yemen and the murder of Jamal Khashoggi have changed peoples’ opinions radically. Now, people think that his ambition can create frightening events, and he can cause many problems in Middle East. Because of these reasons, in this opinion, I will evaluate briefly how he will affect the Middle East and the possible consequences of his regime, and also I want to express how dangerous he is for Middle East.
The Prince has ambitious plans for the Kingdom and Middle East. First of all, he wants to make Saudi Arabia the leader of the muslim world and the most powerful country in Middle East and he wants to eliminate his rivals within the Kingdom. Also, he has daring plans for Israel-Palestine conflict.These points I mentioned are actually not realistic or peaceful and will certainly create problems. kagandagdeviren1998@gmail.com
Firstly, we need to think how he can make Saudi Arabia the strongest state among muslim countries and in Middle East. The Prince will face two major problems. These are the non-Arab countries in Middle East, Iran and Turkey. Saudis and Iran have had problems for many years for the leadership of Muslim countries and now they are fighting with their proxies in Yemen to show that one of them is stronger than other. Also, they have a problem in Lebanon on who will govern the country whether Hezbollah or Saudi backed prime minister Hariri. It is doubtless that this rivalry will grow with the rise of MBS. The latter,Turkey, is another problem for the Prince because both Erdogan and MBS want the leadership of Sunni world and they are in different sides to achieve this. For example, they are in opposite sides in Qatar crisis, and they have different toughts on Iran regarding how to approach it. For Saudis, Iran is the biggest enemy. On the Other hand, for Turkey Iran can be good partner in some situations. Also, they have different thoughts on ‘Muslim Brotherhood’. While Turkey seems them as a partner, Saudis think that this group is a danger for the kingdom. The another problem for the Prince is his thoughts about Israel-Palestine conflict and how to approach Israel. Different than other leaders in Muslim world, MBS accepts Israel as a good partner and he recognizes their sovereignty, but these approach to Israel, is not admissible for many Muslims, and this creates enemies for MBS in the Islamic world. For example, this approach cannot acceptable for Turkey and Iran, and because of this, they are trying to eliminate the influence of Saudis and MBS on the Israel-Palestine conflict, and are supporting pro-Palestine groups. The last and may be the most dangerous problem for the Prince is his rivals in the kingdom. The problem with his rivals is that actually he can not be king because of the regulations of the kindom. But he and his father are ignoring it , and he is not tolerant to solve the problems with them. For example, he jailed many princes and potential rivals in one day. It shows that he is very determined to take the Kingdom under his rule, but these rivalries can create many issues for MBS and may overthrow him, and it is certain that this overthrow cause blood and fight in the Kingdom. The terrifying thing in this sitauation is that it can cause instability in the region. As it can be seen that the Prince is not regular and ordinary leader for Middle East. He has ambitions and some of them are not possible to achieve and can cause bloody fights in Middle East. He can also create new problems which can not be solved easily. If the countries in the Middle East can unify against MBS, his ambitions can be prevented but I do not think it will be the case. 8
OPINION Is An Economic Winter Coming? Since the start of 2018 Turkish economy has been performing its worst in recent years. Recent developments starting in early 2018, have put Turkey at an economic impasse. Actions taken by the Central Bank of Turkey has been not only slow but also have shaken the trust towards the capableness of the CBT. After the rose in the Dollar/TL parity reaching record heights with 6.8, the general public started to expect it to reach as high as 10. Especially since the start of October, TL have been steadily getting stronger and less volatile. Seeing this stabilization and fall in the Dollar/TL parity, politicians’ view seems to be “the worst is behind us”. It is not only false but also incomprehensive and unrealistic way of thinking.
Kadir Köylü kadirkkoy-
Now that, TL is in a 5.4-5.5 band and there is an opinion in the highest levels lu@gmail.com of government thinking the hardships will be over. It can be easily said that explaining the complex relations in the economy with only Dollar/TL parity International Relations would be immature. Inflation numbers rising to the highest in last 15 years combined with high-interest rates, rising unemployment rates and reluctance to solve the problems that have been faced by the government are the main reasons of the bad condition of the Turkish economy. Firstly, The numbers in September suggests Consumer Price Index to be 24.52% and Producers Price Index to be 46.15%. Indicating that the burden has been mostly on the producer’s side. Which can only mean the households have not been able to see the effects yet. Producers would have to increase the prices in order not to take on this heavy burden by themselves. Secondly, the rising rate of unemployment suggests that there will be a fall in buying power. Combined with companies in hardships facing a cash flow problem it doesn’t look good for the sectors in general. Companies declaring planned bankruptcy, have been causing disruption in the flow of money of the suppliers of the company and the creditor banks. The banks as to price these bankruptcies increased the interest rates. Combining hardships of companies with lower buying power will lead companies in bankruptcy deals to a tighter rope. In a survey conducted by Mediar in Istanbul suggests that 77.86% of people think that the Turkish economy is in a crisis. It can be seen that “the worst is behind us” rhetoric that has been used by the ruling party have not resonated in the general public. It can be understood that people can already feel the rising prices while still the industry pulling most of the heavy burden. Although after solving political crises with the United States the climate have been generally optimistic about the economy, problems that the Turkish economy face are organic problems that needs to be solved with a more complex and comprehensive understanding rather than a “save the day” approach which seems to be the current administrations stance about economics. Turkish economy faces a vicious circle of disturbance in the money flow and low demands due to unemployment. A rough winter awaits Turkey with rising prices of goods and gas with already high cost of living expenses. The approach that correlates a stable Dollar/TL parity to a “good” economy, is wrong on many levels. It is incomprehensive in explaining the complex balance in economics. Even if it was true the TL lost around 35% against the American Dollar since the beginning of 2018 which still is one of the worst performances against the Dollar this year. Recent developments only helped to slow down the ongoing shrinkage. Without complete and structural reforms, this financial bottleneck will not be easy to deal with in the upcoming months.
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TURKEY Turkey exempted from Iran sanctions: Turkish Minister Turkey's Energy and Natural Resources Minister Fatih Donmez said late Friday that they have an information that Turkey will be granted waiver from the U.S. oil sanctions against Iran, but they don't have all the details yet. Mike Pompeo declared that 8 countries including Turkey would be granted waivers from the U.S. oil sanctions against Iran, Donmez told reporters at Turkish parliament. "I want to express my pleasure for this statement. We always stated that such sanctions could negatively impact peace, stability and economies in neighboring countries like Turkey and we elaborated this reality during the talks with U.S. officials," he said. He added that they also stressed the importance of gas and oil trade with neighboring countries for Turkey's supply security. Turkey imports almost nearly half of its oil needs from neighboring Iran. The country also imports oil via pipelines from Iraq and Azerbaijan. However, geographical proximity and stable transport routes facilitate oil trade between Ankara and Tehran. "Now it is understood that what we said during these talks was accepted at some point. I think that this outcome will contribute to peace and stability in the region. The information we have now is showing that Turkey is included among these 8 countries but we received no further details yet. However, I can say that this decision is pleasing," Donmez said. Anadolu Agency / November 2, 2018 The United States and Turkey have lifted sanctions against top officials in each other’s government in a mutual sign on Friday of warming diplomatic relations between the two NATO allies after last month’s release of an American pastor. The New York Times / November 2, 2018 Turkey announced on Saturday that it has recalled its ambassador to Uganda after she wore a Greek mythologyinspired outfit to an event marking the 95th anniversary of the proclamation of the Republic of Turkey. Euronews / November 3, 2018 Foreign Minister Mevlüt Çavuşoğlu hosted the Sixth TurkeyAzerbaijan-Iran Trilateral Foreign Ministers’ meeting. At the meeting common issues, in particular energy security and transport were discussed. Turkish Ministry of Foreign Affairs / October 30, 2018
EBRD cuts Turkish forecasts on back of recent lira volatility The European Bank for Reconstruction and Development (EBRD) has cut its forecasts for economic growth in Turkey in 2019. However, in its latest Regional Economic Prospects report, the EBRD said the lira seems to have stabilised after a series of sharp central bank interest rate rises, the adoption of the government’s New Economic Programme and a recent rapprochement in relations with the United States of America. The EBRD expects growth in Turkey of 1 percent in 2019, compared with a prediction of 4.2 percent in May this year. Economic growth is expected to have slowed to 3.6 per cent in 2018 from 7.4 per cent in 2017 after indications of a sharp slowdown in the second half of this year. European Bank for Reconstruction and Development / November 1, 2018
Istanbul opens mega-airport set to be world's busiest Turkey's newest airport, planned to be the world's largest, has been officially opened in Istanbul. Istanbul Airport will be capable of handling up to 90 million passengers by 2021, with further expansion leading to a total capacity of up to 200 million. That would be almost double the capacity of the world's busiest airport last year, Atlanta. President Recep Tayyip Erdogan officially opened the airport on Monday to coincide with the 95th anniversary of modern Turkey's foundation. . The $12bn project has been spearheaded under Mr Erdogan's government, which envisions Istanbul becoming a global transit hub between Asia, Africa and Europe. Istanbul's existing Ataturk Airport will continue to operate as normal until the end of the year, when it will transfer its international code - IST - as its replacement begins to ramp up its capacity. BBC / October 29, 2018
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ECONOMY & BUSINESS Italy's Economy Stalls as Eurozone Slows Down Italy's economy came to a standstill in the third quarter of the year, registering no growth at all.
It comes as the new coalition government is arguing with the European Commission over the need for an expansionary budget to boost growth. Meanwhile, figures from the European Union showed economic growth in the 19 countries using the euro currency slowed by more than expected. Eurozone growth slowed to 0.2%, from 0.4% in the previous quarter. Growth across all 28 countries of the EU fell to 0.3% from 0.5%. Italian Prime Minister Giuseppe Conte said the zero growth in Italy justified Rome's expansionary 2019 budget, which the European Commission has rejected because it breaks EU rules. He said on Facebook; "The slowing GDP is another reason to go full steam ahead with the budget." Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "This is a sobering number for the new government, though we suspect that it will meet it with fighting talk, at least initially. "After all, with growth now stalling, fiscal stimulus is needed more than ever, or so at least the argument will go in Rome." Figures from the French statistics agency INSEE showed France's economy picked up thanks to a rebound in consumer spending. It grew by 0.4% in the third quarter, compared with 0.2% in the previous three-month period, but the rate was less than forecast, meaning the government may miss its full-year growth targets. BBC / October 30, 2018
US Wage Growth Hits Nine -Year High
Committee discusses measures against macroeconomic
Wages in the US grew at their fastest pace for nine Measures to be taken on parities, liquidity and foreign years last month, the latest official figures show. exchange reserves against macroeconomic risks were discussed at the first Financial Stability and Development Committee (FİKKO) meeting under the chairThe US Labor Department said wages grew at an annual manship of Treasury and Finance Minister Berat Alrate of 3.1% in October, accelerating from a rate of 2.8% bayrak on Nov. 1. the month before. The economy also added 250,000 jobs last month, beating expectations, while the jobless rate remained at 3.7%. The report quickly became fodder for political debate ahead of next week's high stakes cong- In line with the New Economic Program (YEP), FİKKO ressional election. President Donald Trump celebrated replaced the Financial Stability Committee (FİK). The the figures on Twitter as "incredible" and urged his fol- meeting included the participation of chiefs from the lowers to "Vote Republican".In an unusual move, the Central Bank of the Turkish Republic (CRBT), the BanWhite House also organised a briefing call for reporters king Regulation and Supervision Agency (BDDK), the to promote the gains. The top Senate Democrat, Chuck Capital Markets Board (SPK), the Savings Deposit InsuSchumer of New York, issued a statement of his own, rance Fund (TMSF), Borsa Istanbul and the Banks Assoaiming to redirect voter attention. The latest numbers ciation (TBB) along with Albayrak and the Deputy Trea"may look good" but should be considered alongside ot- sury Minister Nureddin Nebati and Deputy Finance Miher economic policies, he said. "When the average family sees their health care costs go up because of Republican nister Osman Dinçbaş, according to a follow-up ministry actions, these numbers will mean little," he said. Among statement. “In a bid to enable FİKKO to take a more actieconomists, there was wider agreement that the jobs re- ve role in coordinating the financial system, a number of port pointed to strength in the US economy, despite re- subgroups were planned to be formed and details about cent worries that weakness may be emerging in some the committee’s working methods were discussed,” read sectors such as housing and trade. BBC / November 1, the statement. “The monetary tightening policies of the European Central Bank [ECB] and the Fed, potential 2018 fluctuations in global markets and measures on that can be taken on parities, liquidity and foreign exchange reserves against these risks were discussed,” it added. hurriyetdailynews / November 1, 2018 11
EDITOR Salih Bülbül
COORDINATORS Işılay Merve Güzbey, Fırat Arslan, Kadir Köylü EUROPE Mert Malkoç, Salih Bülbül ASIA Yasemin Karakuş, Çiğdem Gedikli M. EAST & AFRICAS Kadir Köylü, Batuhan Akkuş AMERICAS TURKEY Işılay Merve Güzbey, Sinem Ay
ECONOMY & BUSINESS Fırat Arslan, Elif Yaren İnce
OPINIONS Oğuzhan Sabuncu, Kağan Dağdeviren, Mert Malkoç, Kadir Köylü
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Editor: bulbullsalih@gmail.com 12