CuriousInvestor

Turkish Shareholders Association Plans to Sue the Turkish Central Bank

While I do appreciate your economic point (though I vehemently
disagree with your politics), an export-led model and low interest rates is not a cure-all, as Japan for the past 20 years illustrates. The world's largest exporter, Germany, is also a less than sterling poster-child for that type of economy going forward. And China, while a fantastic story on many levels, has had growth come at extraordinary costs that no democratic country would be willing to bear in the short-term. It's very telling that China has been emphasizing its domestic economy more and more this decade, sacrificing or de-emphasizing export competitiveness (increasing interest rates, reserve ratios, etc.).

The most suitable economic strategy, as AKP has tried, is to put money and tools in the pockets of the average Turk, both by encouraging consumption through fiscal measures and encouraging savings/investment through monetary measures. It's a very delicate and remarkable balance that Turkey has been able to maintain for most of this decade under AKP stewardship.

As far as I'm aware, exports have shown respectable upticks during the AKP tenure. The external debt has been trending downward. The percentage of foreign-ownership of Turkish equity market has also gotten smaller. Sure, there are more reforms necessary, but Turkey is climbing out of a bottom made my so-called "secular" parties of the past, the same ones now trying by hook or by crook to regain power.

Turkey does not need to be commodity-rich like many of the Gulf and former Soviet Asian states to experience similar or sustained growth given its strategic location, connections to the economically burgeoning Islamic world (Islamic finance and food are great growth opportunities), and demographically young and large population. The Turkish government needs to remain the course and it'll do fine. Rampant hyperinflation, humiliating currency devaluations and stagnant growth need to be left back in the "secular" past. Lowering interest rates in a race-to-the-bottom does not serve Turkey's short or long-term interest. The US is already considering reversing its recent interest rate cuts. Inflation has already taken hold in food and fuel around the world. Turkey being a net fuel importer, by your own admission, is a point against lowering interest rates.

And, by the way, most of the accessible investments in the Gulf (or any other oil-rich country or region) are not in the energy sector and they have performed extremely well. TRAMX is up over 35% since its inception less than a year ago.

I have a longterm perspective on Turkey. I think it offers a tremendous growth play, but only if the AKP is at the political reigns. Every time Turkey ousts an alleged "Islamist" party, the government that follows takes the country down the wrong path (especially economically).

Turkish Shareholders Association Plans to Sue the Turkish Central Bank

As an American investor in Turkish stocks, I find it repugnant that the anti-AK Party elements in the country (the same corrupt elements that have had a monopoly on power post-Kemal and left the economy in tatters) are now using their influence with the judiciary to overturn the party that has won multiple elections and is the reason why Turkey (until the last few months) has been an economic/financial superstar.

My Turkish investments are down 50% from their highs last year because of these anti-AK Party minions. They failed in the elections, they failed in pursuing a military coup d'etat, and now their using partisan Supreme Court to overturn the hugely popular and successful AK Party. The political instability is responsible for the poor performance of the stock market, otherwise Turkish stocks would be performing on par or better than Russia and the Gulf countries. If there's any justice in Turkey, the AK Party will be left alone to steer the country to prosperity, as it has successfully done for the last several years.