If you ignore a financial crisis, maybe it will go away!

[Prof. Dr. Mukerrem Hic]

2008 changed what seemed, on surface, a rosy economic picture for
Turkey in terms of GNP growth albeit with accompanying increases in
unemployment. This was because by 2008 balance of payments deficit
enlarged while difficulties began to appear about financing it in the
future due to the global financial crisis that emanated from the US
sub-prime mortgage crisis. The negative effects of the global
financial crisis were felt in decreasing flows of DPIs, financial
funds and bank credits from foreign sources which had so far financed
the current account deficit, including interest payments on foreign
debt.

Despite the fact that these effects became obvious by September 2008,
Prime Minister Tayyip Erdogan was very optimistic. He openly declared
that Turkey could actually stand to benefit from the global financial
crisis, since investors would prefer Turkey as other countries become
more risky. This optimistic view was echoed not only by AKP ministers
but also by a small number of CEOs. The chairman of Turkish
Agricultural Bank, who was appointed by the AKP government, also
declared that the Turkish banking system was strong and aiding banks
worldwide with $10billion a day. So, instead of focusing on the
financial crisis, Tayyip Erdogan chose to attack the media for
disclosing the Deniz Feneri corruption case.

Only at the beginning of October Tayyip Erdogan conceded that there
would be some negative effects of the global crisis on Turkey, but
they would remain minimal, still underestimating the harm. Meanwhile,
the Turkish currency devalued against the dollar by 14% in a week and
the Turkish stock exchange suffered serious losses along with the rest
of the world markets.