Turkey’s key sectors may crumble as the economy shows strong signs of slump

The Peri Tower Hotel was the latest to throw in the towel.

“By the end of No­vember, we will shut our doors to tourists,” said Nazif Demir, the manager of the hotel, which has been a landmark in Cappadocia in central Turkey since 1995.

“All we know is, 2017 will be even harder than this year,” he said.

The closure is one of the many in Turkey’s deeply troubled tourism sector, shattered since mid-2015.


Tourism Ministry figures indicate that the number of foreign visitors to Turkey dropped 31.9% to 20.2 million in the first nine months of the year compared to the same period in 2015. September marked the 14th consecutive monthly de­cline, with several terrorist attacks, a failed coup attempt and bilateral tensions with Russia seen as pri­mary culprits for the overall drop in tourism over the past few years.

“This a catastrophe,” said Meh­met Isler, the head of Turkish Ho­tel Owners Association, “and 2017 does look even worse.”

Istanbul, one of Turkey’s main magnets for foreign visitors, is vis­ibly shaken by big decreases in the number of tourists. As of the end of October, more than 600 shops, out of a total of 3,600, in the Grand Ba­zaar had shut down. Another 1,500 are at risk of going out of business, market insiders said.

The district of Pera looks deso­late. Even international chains such as McDonald’s and Starbucks chose to shut branches. The same is true in Nuruosmaniye, a traditional old town market usually buzzing with activity, and Baghdad Street, a posh strip on the Asian side of town. There are also reports of the mass closures of shops in Istanbul’s many modern shopping malls.

Antalya, usually a tourism hub, has seen a 60% decrease in the number of visitors in the past ten months. Local sources said revenue losses could be as high as $5 billion.

Because of the drop in tourists, 10% of the Turkish Airlines fleet has been frozen, indicating big losses.


The Turkish lira has been losing value at an increasing rate. It has been subjected to de facto devalua­tion by 24% since March 2015, 11.4% since April.

“It is on a razor’s edge,” wrote Seyfettin Gursel, an expert on the macro economy. “The Central Bank is inefficient. We should postpone our hopes for a low inflation indefi­nitely.”

The official jobless rate in Turkey is 11.4%. The percentage of people truly unemployed is likely much higher.

All this does not bode well for a country dragged into a profound political crisis and social instability.

Turkish President Recep Tayyip Erdogan’s relentless push for a re­gime change under the guise of introducing a presidential system that will equip him with enormous executive powers lies beneath the turmoil. Polarisation deepens as he forces the pace.

The measures he endorsed under emergency rule have had an intimi­dating effect on foreign investment and financial markets. These in­clude the arbitrary seizure of prop­erty and assets whose value could amount to $10 billion that belong to the Anatolian business circles accused of being tied to the Gulen movement, which the government accuses of being behind the failed July coup.

Erdogan’s denigrating rhetoric to­wards European leaders has made matters worse. That 75% of foreign investment to Turkey comes from the European Union is enough to explain the economic damage be­ing done.

”Continued degradation of the rule of law or, indeed, the possibil­ity of civil strife entails a potential disruption in the manufacturing ac­tivities of EU firms that have locat­ed major production sites in Turkey thanks to the EU-Turkey Customs Union,” wrote Marc Pierini, a for­mer diplomat and expert on Tur­key.

“‘The same goes for a host of major EU operators in the fields of retail trade, banking and insurance and energy.”

Nothing, at the moment, seems to stop the bleeding of the econo­my. “Within the last week, Central Bank’s currency and gold reserves decreased by $5.59 billion. In the past 4 months foreign currency ac­counts went down by $17.3 billion, wrote Ugur Gurses, a columnist with the daily Hurriyet. “Now [Cen­tral Bank] reserves are down on $ 117.5 billion, and this is the biggest loss since 2009.”

The one political figure who seems to understand the urgent need to resolve the economic and political crises is Deputy Prime Minister Mehmet Simsek. In a re­cent closed-door meeting with business people, he said:

“Democ­racy matters a lot. A Turkey that is detached from the European Union will be perceived as a third world country.”

In a domain where nobody dares stand up to the president, it does not seem likely that Erdogan will pay attention. Such challenges in Turkey are seen as sufficient reason to get fired.

Meanwhile, discontent grows in large sectors like tourism. A recent study amongst its members showed that more than 74 % of them believe the crisis is because of the ‘misconduct ofTurkey’s foreign policy.

About yavuzbaydar

Yavuz Baydar has been an award-winning Turkish journalist, whose professional activity spans nearly four decades. In December 2013, Baydar co-founded the independent media platform, P24, Punto24, to monitor the media sector of Turkey, as well as organizing surveys, and training workshops. Baydar wrote opinion columns, in Turkish, liberal daily Ozgur Dusunce and news site Haberdar, and in English, daily Today's Zaman, on domestic and foreign policy issues related to Turkey, and media matters, until all had to cease publications due to growing political oppression. Currently, he writes regular chronicles for Die Süddeutsche Zeitung, and opinion columns for the Arab Weekly, as well as analysis for Index on Censorship. Baydar blogs with the Huffington Post, sharing his his analysis and views on Turkish politics, the Middle East, Balkans, Europe, U.S-Turkish relations, human rights, free speech, press freedom, history, etc. His opinion articles appeared at the New York Times, the Guardian, El Pais, Svenska Dagbladet, and Al Jazeera English online. Turkey’s first news ombudsman, beginning at Milliyet daily in 1999, Baydar worked in the same role as reader representative until 2014. His work included reader complaints with content, and commentary on media ethics. Working in a tough professional climate had its costs: he was twice forced to leave his job, after his self-critical columns on journalistic flaws and fabricated news stories. Baydar worked as producer and news presenter in Swedish Radio &TV Corp. (SR) Stockholm, Sweden between 1979-1991; as correspondent for Scandinavia and Baltics for Turkish daily Cumhuriyet between 1980-1992, and the BBC World Service, in early 1990's. Returning to Turkey in 1994, he worked as reporter and ediytor for various outlets in print, as well as hosting debate porogrammes in public and private TV channels. Baydar studied informatics, cybernetics and, later, had his journalism ediucatiob in the University of Stockholm. Baydar served as president of the U.S. based International Organizaton of News Ombudsmen (ONO) in 2003. He was a Knight-Wallace Fellow at University of Michigan in 2004. Baydar was given the Special Award of the European Press Prize (EPP), for 'excellence in journalism', along with the Guardian and Der Spiegel in 2014. He won the Umbria Journalism Award in March 2014 and Caravella/Mare Nostrum Prize in 2015; both in Italy. Baydar completed an extensive research on self-censorship, corruption in media, and growing threats over journalism in Turkey as a Shorenstein Fellow at the Kennedy School of Government at Harvard.
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