Turkish economy is still steady as a rock

On July 15, 2016 Turkish democracy and its legitimate government was attacked by a group of soldiers in the army who were members of the Fetullah Gulen terrorist organisation (FETO). Bridges on the Bosporus were blocked by the putschists, our parliament and presidential palace were bombed.
Terrorists attempted to capture or assassinate our elected president and took hostage the chief of staff of our army.
This attack against our elected government and democracy has been overcome by the unity and solidarity of our people with its government and operations by our police and armed forces against these terrorists.
Financial markets reacted to this coup attempt as expected, which created turmoil and uncertainty, especially in the first week following it. But the negative outlook was very short-lived.
Lira started regaining its value a week after the coup attempt. On August 12 it was floating just 2.7% below its value on July 14. BIST 100 index which stood at 82.825 points on July 15 declined during the week following the coup.
Just like the Turkish lira, the index started its upward trend on July 22 and has been steadily increasing. The BIST 100 closed on Friday, August 12, at 79.367 points.
The coup attempt and the decision of the S&P to downgrade Turkey’s rating will not have any lasting effect on Turkish economy.
Just like our prime minister stated, as our democracy and rule of law are stronger than before the attempted coup, our economy is still steady as a rock.
First of all, S&P was already rating Turkey below its “investment-grade”. Other credit rating agencies like Moody’s and Fitch on the other hand have been rating Turkey at investment-grade, and did not change their ratings following the coup attempt.
Therefore, lowering of the rating by one agency did not and will not have a lasting impact on Turkish economy.
Secondly, the Turkish government and financial bodies have been taking the necessary steps to minimise volatility after the coup attempt. The central bank stated that it would provide liquidity for banks. Very recently it lowered its reserve requirement for banks to further boost liquidity. It is estimated that that these moves should result in 0.5% contribution to banks’ annual earnings.
Banks, on the other hand, responded with lowering interest rates on loans which will result with increases in growth.
The government is also restructuring debts of almost 6.3mn companies and individuals regarding taxes and social security fees.
A sovereign wealth fund, which will be among the largest 20 of its kind when established, is planned by the government.
This fund will create an additional 1.5% contribution to annual growth in the next decade, and will be used to finance large-scale projects.
While large-scale projects will augment infrastructure and growth, Turkey’s low budget deficit and fiscal robustness will not be affected thanks to this fund.
Indeed, Turkish economy already continues to produce and our exporters are selling their products overseas as usual.
No ports and airports or production facilities were affected by coup attempt.
As a matter of fact, exports increased three weeks in a row after July 15.
The Turkish business community is feeling optimistic after the coup attempt and have launched a campaign to counter ongoing disinformation on what happened and what’s happening in the country.
International investors are also showing appetite to continue to invest in Turkey. Our Qatari friends need a special mention in this regard.
HH the Emir was one of the first leaders who expressed support to our government and Turkish people. HE the Prime Minister also called our Prime Minister and stated that Qatar was shoulder to shoulder with the legitimate government of Turkey.
The Minister of Foreign Affairs and Chief of Staff of Armed Forces paid visits to Turkey to show their support for our government and president.
On the economic front, we appreciate Qatar’s commitment to make further investments in Turkey in line with its long-term perspective to enhance bilateral economic relations between our two countries.
Qatar Chamber of Commerce and Industry (QCCI) vice chairman Mohamed bin Ahmed bin Towar al-Kuwari stated during an event organised by the Turkish Businessmen Association-Qatar and QCCI that Qatari investments in Turkey would not lose speed.
Indeed, investments by Qatar companies in Turkey ranging from banking sector to agriculture, media and beyond has reached $1.2bn as of 2015.
The trade between our two countries have been increasing in the last couple of years and bilateral trade was around $1.3bn in 2015. I believe there is potential to double this number over the next couple of years.
During Turkey-Qatar High Strategic Committee’s first meeting in Doha, 17 bilateral agreements including a memorandum of understanding for long term LNG trade were signed that would strengthen the economic, political and cultural relations.
Turkey also remains to be a popular tourism destination for Qataris. The number of Qataris visiting Turkey was around 6,000 in 2010. With growing economic and cultural ties between our countries this number has exceeded 33,000 in 2015. After the coup attempt our Qatari brothers and sisters are continuing to visit Turkey.
Our embassy is also working hard to meet the demand of non-Qatari residents requiring an entry visa. We are taking the necessary steps to further ease the visa process.
Also, I am pleased that the Qatar Tourism Authority (QTA) has very recently opened an office in Istanbul, which will help strengthen the tourism relations between our two countries.
Turkey faced a heinous attack against its democracy, but its people, and government stood strong against terrorists who wanted to hijack people’s will.
Turkish people understand and will never forget the solidarity shown by the Qatari state and its people during this hard time.
Turkish economy also stood up well after this attack and continues to be a large, vibrant and productive economy in its region. It is financially and commercially sound and keeps presenting countless possibilities for internal and external investors.

*Ahmet Demirok is Turkey’s ambassador to Qatar.