Tag: turkey

The Kids Are All Right

Is libertarianism a worldwide trend among young people? There are poll reports from the United States, Great Britain, and Turkey this week that point in that direction.

The College Republican National Committee put out a report finding that young voters are very much against excessive government spending (though they do support higher taxes on the wealthy) and are strongly in favor of gay marriage. They want to reform entitlements but see the Republican party as “closed-minded, racist, rigid, old-fashioned.”

Meanwhile, the Economist, in an editorial titled “The strange rebirth of liberal England” (in an allusion to a famous history book), writes, “Young Britons have turned strikingly liberal, in a classical sense….The young want Leviathan to butt out of their pay cheques as well as their bedrooms.” An accompanying article declares, “Britain’s youth are not just more liberal than their elders. They are also more liberal than any previous generation”:

Young Britons are classical liberals: as well as prizing social freedom, they believe in low taxes, limited welfare and personal responsibility. In America they would be called libertarians.

More than two-thirds of people born before 1939 consider the welfare state “one of Britain’s proudest achievements”. Less than one-third of those born after 1979 say the same. According to [the long-running British Social Attitudes survey], members of Generation Y are not just half as likely as older people to consider it the state’s responsibility to cover the costs of residential care in old age. They are also more likely to take such a hard-hearted view than were members of the famously jaded Generation X (born between 1966 and 1979) at the same stage of life.

“Every successive generation is less collectivist than the last,” says Ben Page of Ipsos MORI, a pollster.

And finally comes this headline from the Hurriyet Daily News in Istanbul: 

Protesters are young, libertarian and furious at Turkish PM, says survey

An online survey of 3000 protesters conducted by two academics found, among other things:

A majority of the protesters who completed the survey, 81.2 percent, defined themselves as “libertarian.” A total of 64.5 percent of the respondents defined themselves as “secular.”

Maybe this really is the libertarian momentStudents for Liberty attracted 1,400 attendees to its February national conference, and another 365 to a European conference in March. Now, as the Economist says, if only the young people will vote – and the parties will offer them candidates.

Is Turkey Golden?

Recently, Moody’s Investors Service took some wind from Turkey’s sails, when it declined to upgrade Turkey’s credit rating to investment grade. Moody’s cited external imbalances, along with slowing domestic growth, as factors in its decision. This move is in sharp contrast to the one Fitch made earlier this month, when it upgraded Turkey to investment grade.   Moody’s decision not to upgrade Turkey, and its justification, left me somewhat underwhelmed – given how well the Turkish economy has done in recent years.

Since the fall of Lehman Brothers, Turkey’s central bank has employed a so-called unorthodox monetary policy mix. For example, a little over a year ago, it began to allow commercial banks to purchase gold from Turkish citizens and allowed banks to count gold to fulfill their reserve requirements. Incidentally, this was a remarkable success – from 2010-2012, the Turkish banking sector’s precious metal account increased by over 7 billion USD.

For all the criticism its unconventional monetary policies have garnered, the Central Bank of the Republic of Turkey has, in fact, produced orthodox, golden results. Indeed, as the accompanying chart shows, the central bank has delivered on the only thing that really matters – money.

Turkey’s economic performance has been quite strong (despite some concerns about inflation and its current account deficit) . Turkey’s money supply has been close to the trend level for some time, and it currently stands 2.41% above trend. This positive pattern is similar to that of many Asian countries, who continue to weather the current economic storm better than the West.  And, it stands in sharp contrast to the unhealthy economic picture in the United States and Europe – both of which register significant money supply deficiencies.

So, why would Moody’s not follow Fitch’s lead and upgrade Turkey to investment grade? To understand this divergence, one should examine Turkey’s recent current account activity. Since late 2011, Turkey’s current account has rebounded somewhat (see the accompanying chart).

But, if gold exports are excluded from the current account (on a 12-month rolling basis), a rather significant 47% of this improvement, from the end of 2011 to September 2012, magically disappears.

Where is this gold going? Well, a quick look at the accompanying chart shows just how drastically exports to Iran and the UAE have surged this year.

Taken together, the charts indicate that Turkey is exporting gold to Iran, both directly and via the UAE , propping up their current account in the process. This has put Turkey and the UAE in the crosshairs of proponents of anti-Iranian sanctions.   Those who beat the sanctions drum are now seeking to impose another round of sanctions, aimed at disrupting programs such as Turkey’s gold-for-natural-gas exchange. This proposal clearly highlights some of the problems associated with sanctions, specifically the unintended costs imposed on the friends of the U.S. and EU in the region. Indeed, Dubai has already taken a hit, with its re-exports falling dramatically as a result of the sanctions.

What is the U.S. to do – go against Turkey, its NATO ally? Believe it or not, some in the Senate are allegedly considering such a wrong-headed move.

If these proposed sanctions are implemented, then Moody’s pessimistic outlook on Turkey may turn out to be not so far from the mark, after all – and Turkey will have no one but its “allies” to blame.

NATO and Turkey: Moribund Alliances, Military Snares, and Unnecessary Wars

NATO fulfilled its Cold War role by deterring rather than sparking conflict. Yet if Turkey and Syria come to blows, the transatlantic alliance could turn into a transmission belt of war for America.

Syria’s developing civil war has spilled over into Turkey. Moreover, Ankara has begun to meddle in the conflict next door. Despite Turkey’s denials, the Erdogan government appears to be channeling arms shipments to rebels and sheltering Syrian opposition activists.

Thus, tension between the two governments was rising even before the Syrian military destroyed a Turkish RF-4E reconnaissance plane. Damascus claimed the aircraft was in Syrian airspace; Ankara said the jet had strayed over Syrian territory but was over international waters when downed. The plane may have been on a surveillance mission:  the Erdogan government has been pressing for NATO military action against Syria.

After the shoot-down, Prime Minister Recep Tayyip Erdogan said “any military approach to the Turkish border from the Syrian side will be perceived as a threat and will be dealt with accordingly.” Ankara also sought backing from NATO’s members: “We consider this act to be unacceptable and condemn it in the strongest terms,” explained Alliance chief Anders Fogh Rasmussen.

Rasmussen said that Article 5, regarding use of military force in defense, had not been discussed. And he stated “It is my clear expectation that the situation won’t continue to escalate.” Wars have a way of happening unexpectedly, however. If Turkey attacks Syrian military units in their own territory, sparking retaliation by Damascus followed by a call from Ankara to NATO for support, the United States could find itself, however reluctantly, at war.

Alliances make sense when directed against an overwhelming outside threat. The Soviet Union constituted one. Syria does not.  NATO has turned into an association which drags members into everyone else’s wars, actually reducing collective security.

The United States pulls Europe into Afghanistan, a mission widely opposed by the European people. Europe pulls America into Libya, a mission widely opposed by the American people. Turkey could pull both America and Europe into Syria, a mission generally opposed by both the American and European people.

The security argument for Washington’s defense of Europe disappeared years ago. The worsening confrontation between Turkey and Syria offers a sharp reminder that NATO is not only unnecessary but dangerous. The U.S. should drop this outmoded security commitment before it draws America into yet another war in the Middle East.

Cross-posted from the Skeptics at the National Interest.