Economic wars and the emergence of a new chaotic world order

Turkey has been under an economic attack since last week when the United Stated imposed sanctions on two Turkish ministers following the arrest of evangelical pastor Andrew Brunson. The attack was furthered with additional taxes on the Turkish import of steel and aluminum and with U.S. President Donald Trump’s controversial tweets directly targeting the Turkish lira.

The tweets were sent by President Trump just as Treasury and Economy Minister Berat Albayrak was declaring the new economic model for the country. It was an apparent hostile move against the stability of the Turkish economy. Later, the night purchases of currencies led to a huge manipulation of the lira. Not complying with real economy data, the crisis immediately emerged due to great speculation. A quick glance at information such as the proportion of gross domestic product (GDP) to fiscal deficit, of public debt stock to GDP or the terms of external loans are enough to see how artificial the attack is.

That Turkey was the target of an economic attack was immediately realized by world powers. Other countries, particularly Germany and Italy, reacted strongly against the crisis and made supportive statements toward the Turkish government and economy.

Italy’s Prime Ministry Undersecretary Giancarlo Giorgetti said “the markets are populated by hungry speculative funds that choose their prey and pounce,” and added that Italy could face such an attack in the future.

Similarly, the German Economy and Energy Minister Peter Altmaier spoke on the economy war and said that the tariffs implemented on China and Turkey were unfair. Later, German Chancellor Angela Merkel highlighted that no one should have any interest in Turkey’s economic destabilization.

Indeed, all have been aware of the strained tensions between Ankara and Washington for a few years. There are many crises and topics waiting to be solved: The extradition of the Gülenist Terror Group (FETÖ) leader and its members, the United States backing the outlawed PKK’s Syrian wing, the People’s Protection Units (YPG), the S-400 crisis, the Halkbank case, the pastor trial, the sanctions on Iran and so on.

It looks like President Trump, who is already in trouble with the Muller investigation, has played a game on the Brunson issue to strengthen his power for internal purposes. Since the Erdoğan administration didn’t respond as positively as Trump wished, he immediately started attacking the Turkish economy by declaring sanctions.

It can be said that the Turkish-U.S. partnership has entered a very chaotic period with this decision by the U.S. president and it seems that the crisis will last until the U.S. midterm elections in November. However, what’s more important is that President Trump’s targeting of NATO ally Turkey reveals that the international community is experiencing a deeper crisis. This new chaotic world order is evidently created by the U.S. president himself. In other worlds, it is an order that can be described as the continuation of the former Obama administration.

The U.S. started ignoring world problems under the leadership of Barack Obama. As an example: President Obama made an out-of-the-box decision to support its ally Turkey’s enemy, the PKK’s Syrian wing, the YPG. Thanks to this controversial policy, the Middle East witnessed a rapid increase in violence from non-state armed actors. The Trump administration furthered President Obama’s reckless strategy and started imposing sanctions on U.S. allies.

At such a time, the world is witnessing how the businessman Trump is using the economy as a weapon for the sake of U.S. interests. Such an understanding of the economy can surely be described as a “cowboy” style, since it includes internal threats, sanctions and financial attacks.

Naturally, economic interests have always been of significance in interstate affairs. The fiscal institutions formed under U.S. hegemony and the power of the U.S. dollar in the international order after World War II were all for the sake of U.S. interests.

Thinking that this order does not benefit U.S. interests enough, while strengthening the economies of China and other emerging powers, President Trump acts angrily and without thinking. The most visible difference in President Trump’s view is that he does not need any international legitimization and he uses U.S. power in a very reckless and irrational way, breaking the rules of even U.S. alliances.

At this point, the hegemony of U.S. dollars is something that needs to be feared and measures should be taken against it. As President Recep Tayyip Erdoğan says, there is now a “dollar threat” in the world.

While breaking the world order and norms, the United States is beginning a very dangerous period: The economy is becoming the first priority of the larger security issue. The anarchist world of fund managers and speculators is therefore being legitimized. In the new chaotic world order, rational actors such as Turkey and the European countries will need one another more than ever.

[Daily Sabah, 16 August 2018]