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The Economy, The Political Actors, And The Nation Resisted The Coup Attempt


On the night of July 15, a coup attempt kicked off by the parallel structure and its affiliates was repelled thanks to the courage and leadership of President Recep Tayyip Erdoğan, the effective intervention of the security forces and the self-sacrificing efforts of the Turkish nation. Having caused more than 200 casualties and thousands of injuries, the coup marked a series of extraordinary and shocking events in the collective memory of our nation, including the militants in army uniforms who opened fire on civilians, the bombardment of the Turkish Parliament and the assassination attempt against President Erdoğan.

The Economy The Political Actors And The Nation Resisted The

On the night of July 15, a coup attempt kicked off by the parallel structure and its affiliates was repelled thanks to the courage and leadership of President Recep Tayyip Erdoğan, the effective intervention of the security forces and the self-sacrificing efforts of the Turkish nation. Having caused more than 200 casualties and thousands of injuries, the coup marked a series of extraordinary and shocking events in the collective memory of our nation, including the militants in army uniforms who opened fire on civilians, the bombardment of the Turkish Parliament and the assassination attempt against President Erdoğan. From an economic perspective, this attempt has caused some uncertainties, which is more than natural. However, it did not cause any significant damage when compared with its past examples. To better grasp the reasons for this, it is necessary to focus on the steps taken in recent years in the macroeconomic governance of Turkey and specifically to concentrate on the success of the crisis management which followed the night of July 15.

It is widely known that a strong structure was built in the context of macroeconomic governance in Turkey as a result of the corporate reforms conducted in recent years. During the coup attempt, while the state’s security forces were taking measures against the elements organizing the attempt, the Central Bank and the economy bureaucracy had a busy schedule lessening the possible aftershocks of the developments on the economy. Deputy Prime Minister of Economy Mehmet Şimşek and Central Bank Governor Murat Çetinkaya organized teleconferences with around 560 significant foreign investors to ease possible worries regarding the future of investments. Having met at the Banks Association of Turkey (TBB), executives of banks determined their basic necessities during the crisis, including liquidity, and conveyed their resolutions to the Central Bank in a calm manner.

Considering these basic necessities, the Central Bank announced a series of relieving precautions, including unlimited liquidity backup to banks, cutting security limitations and rounding off the costs in some transactions, with an aim to prevent a possible liquidity crunch after the coup attempt. The decision to keep the branches of the Central Bank open during weekends was the right one. A possible cash need that could have occurred after withdrawals from ATMs was prevented, and banks could renew their cash pools without any trouble. In times of crisis such as wars, natural disasters or coups, providing the needs of liquidity and cash is of vital importance both for the health of the economy and for the management of social psychology. During this critical process, cash problems were not experienced, which is a noteworthy governance achievement.

Thanks to the perfect coordination between the fundamental institutions of the economic bureaucracy and the banking sector, a collective panic was avoided and a rush to banks was not seen as in Greece and other European countries after the global crisis. With the traces of the 1994 and 2001 crises in its corporate memory, the Central bank and the economy administration instilled confidence to their environment with their composed decision-making style. While people in European countries rushed to banks in panic in times of crisis, our nation rushed to public squares to defend democracy. In addition, leading non-governmental organizations of the business world, including the TOBB, MÜSİAD and TÜSİAD, issued solidarity messages against the coup attempt, while the entire business world supported democracy and raised their voice in unison to provide normalization as soon as possible. And of course, the highest credit must be given to our citizens, who resisted the military vehicles seized by pro-coup troops by risking their lives and turned the social resistance into a celebration of democracy.

 

 

 Process of refreshment and renewal

Each coup or coup attempt creates deep traumatic conditions in various fields of social life, and it is not possible to isolate the economy from this aftermath. But when we look at the first damage report issued after the coup attempt, we see that Turkey did not negatively differ from developing markets, the fluctuations in stock and foreign exchange markets were temporary, and no significant damage occurred in the CDSs, which show the country risk premium. In the following period, great efforts will be required to enable the normalization and economic growth momentum in financial markets, trade, importexport activities, and the real economy.

However, forming an anti-coup collective consciousness must be considered important. Such a consciousness will bring different political and societal segments together. This might also provide a strong ground to support institutionalizations and structural reforms in the economy in the long run. The failed coup attempt on July 15 will pave the way for a process of refreshment and renewal by cleansing the FETÖ-affiliated elements from politics, the economy, state institutions, academia, and media. Although we might expect some reactions regarding Turkey’s credibility and the security of investments from the international credit rating agencies and the international actors controlling hot money flow in the short run, we foresee that the structural reform agenda will soon be a focus, and both direct and portfolio investments will rise.

In brief, we can argue that the economy resisted the coup, together with the political actors and the nation.


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