New dawn, gathering cloudsTHERE is much to make investors jittery about Turkey. It is becoming ever more involved in the chaos in neighbouring Syria (see article). The Kurdish insurgency in the east of the country appears to have restarted. Politicians are still wrangling over a coalition after an indecisive election in June. The country may be in for a period of unstable, short-lived government or even a fresh election. Worse, Turkey has long been identified as one of the most vulnerable emerging markets, with slowing growth, a large current-account deficit and high corporate dollar-denominated debt. It is little wonder that the lira has been one of the world’s weakest currencies this year.
Fans of the Justice and Development (AK) party and its longtime leader (now president), Recep Tayyip Erdogan, like to boast of its stellar economic record since first forming a government in 2002. It is true that, after the bumpy 1990s and the humiliating bust of 2001, which...Continue reading
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