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The Turkish financial crisis – from a language perspective

by OFER TIROSH 22/08/2018

Turkey has always occupied a unique position in its blending of cultures. East meets West in the melting pot country, which is famed for its bustling cities, beautiful beaches and superb cuisine. 

The Turkish language

The Turkish language also reflects this blending of East and West. Turkish was first spoken in Mongolia, before absorbing notable Arabic and Persian influences. The language originally had its own Arabic form of writing, but a movement in 1928 to “modernise” Turkey saw the country adopt a form of the Latin alphabet instead, which is still used in the present day. 

Turkish speakers have spread their language far and wide. Some 30 countries host large Turkish-speaking populations, including around two million Turkish speakers in Germany. 

Financial crisis

Sadly, the success of the Turkish language and the country’s many touristic charms don’t seem to be enough to save it from financial crisis. According to JP Morgan Asset Management, Turkey is “in the midst of a perfect storm.” Recent economic growth, while impressive, has been fuelled by foreign-currency debt, with deficits in both Turkish fiscal and current accounts. The country’s reserves are now insufficient to rescue the economy and the Turkish lira’s freefall is causing anxiety among the European banking community. 

While President Recep Tayyip Erdogan seems keen to play down the issues facing his country’s economy, analysts at JP Morgan have no such qualms, writing that, “Turkish assets have been under severe pressure.” They warn that, “investors are worried about the issues in Turkey causing damage in other markets around the world, particularly Europe."

The last financial crisis is still fresh in the minds of many Europeans, who are still living with its effects. The Spanish housing market, for instance, is still worth around 35% less than the value it held when the financial crisis hit. In the UK, wages have stagnated for nearly a decade, despite the cost of living rising significantly. Turkey’s situation is thus creating ripples of anxiety, even as President Erdogan insists that he can maintain low interest rates, despite inflation being more than treble the central bank’s target. As CreditSights analyst Richard Briggs observes:

“President Erdogan continues to prioritize growth and lower rates which will extend the current crisis, rather than allowing the economy to rebalance. He is here to stay, and markets don't have confidence in him. That's a dangerous mix.”

While interest rates remain low, Turkey will struggle to rebalance its economy, with the whole of Europe (as well as the wider world) keeping an eye on the country to see what happens next and how far the impact spreads. 

From a language perspective, Turkish will continue to fascinate linguists with its rich blend of East and West. One of the language’s most interesting tongue twisters is: 

Bir berber bir berbere gel berber beraber Berberistan’da bir berber dükkanı açalım demiş.  
A barber told another barber, “Come barber, let’s start up a joint barbershop in Barberistan.”

Of course, unless President Erdogan and the central bank can curb the looming financial crisis, it doesn’t look like anyone in Turkey will be in a position to open up a new barbershop anytime soon, or any other business venture, for that matter. 

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