US Policy Changes Vol.98 (Foreign Policy Vol.14: Turkey’s lira crisis)

Excerpts are on our own.

Trump Is the First President to Get Turkey Right: Good riddance to the so-called strategic relationship between Washington and Ankara. (08/13/2018) | STEVEN A. COOK @ForeignPolicy
… Then there is the detention of Pastor Andrew Brunson in Turkey since October 2016. This has become a flashpoint between the two countries this summer, especially after Ankara seemed to renege on a deal for his release. But Turkey is also holding between 15 and 20 U.S.-Turkish dual citizens—including a NASA scientist—on trumped-up terrorism charges. Three Turkish employees of the U.S. Embassy have also been arrested. They are being used as bargaining chips to force the United States to hand over Fethullah Gulen, a green card holder who Ankara accuses of masterminding the failed July 2016 coup, and/or to secure the release of a Turkish banker convicted in a New York court of aiding the elaborate scheme to help Tehran get around multilateral sanctions. …
Of course, the United States has an interest in a healthy Turkish economy, if only to prevent the meltdown of the lira from affecting other emerging markets’ currencies. … …Albayrak plans to pursue fiscal discipline, help companies most affected by the lira’s slide, and, contrary to rumors, the government will not seize foreign exchange deposits — good news for foreign investors. At the same, the minister stated that the volatility of the lira was unsupported by the underlying economic data, thus it is clear Turkey is under “attack by the biggest player of the global financial system.” He means the United States.
… Since at least 2013, Erdogan has been telling Turks that when the day of reckoning comes for the Turkish economy, it will be someone else’s fault. If Turks are suffering, then it could not possibly be the responsibility of a government led by someone who believes high interest rates cause inflation (which is exactly backward), but rather the result of the nefarious machinations of the “interest lobby,” Zionists, and the always useful “foreign forces.” Because Erdogan has made the economy a nationalist issue, seeking help from the IMF is politically risky. …encourage his constituents to exchange dollars and euros into lira. …
… It should be clear by now that there is no strategic relationship. Turkey and the United States have different interests and priorities. The lists of grievances on both sides reflects that fact. The fallout is not a function of the unique personalities and worldviews of the American and Turkish presidents, but rather at a fundamental level is the result of a changing world in which Washington and Ankara no longer share a common threat. …
… Perhaps the controversy over Pastor Brunson and the way the Turkish government has responded to the lira crisis will be a clarifying moment, highlighting what should be clear by now: Turkey is no longer an ally or partner.

Capital Outflows and Sudden Stop (w Report; 08/14/2018) | @medium
…which kinds of capital inflow stop during the period? In the 2017 World Bank policy paper “Are capital flows fickle? Increasingly ? and does the answer still depend on type? ” Barry Eichengreen, Poonam Gupta, and Oliver Masetti have tried to investigate how different kinds of capital flows behave during a sudden stop. …
The most rapid capital outflow, however, is in that the authors categorized as ”Others.” Included in others are flows through the banking sector (loans, deposits and banking capital), loans raised by the private sector, and trade credits. …

Erdogan Faces a Challenge He Can’t Easily Bully: Turkey’s Economy (08/13/2018) | Carlotta Gall @nytimes
… “The interest-rate hikes and budget cuts will be painful,” said Atilla Yesilada, an Istanbul-based consultant at Global Source Partners…
“It is the fundamental view of the true populist,” explained Sinan Ulgen, chairman of the Istanbul-based Center for Economic and Foreign Policy Studies, also known as E.D.A.M. …
Turkey has always had a strong bureaucracy, modeled on the French system, with a senior bureaucrat, called an undersecretary, in every ministry, assisted by deputy undersecretaries. Those positions have been eliminated and the civil servant positions replaced with deputy ministers appointed by Mr. Erdogan. …
…the polarizing nature of Mr. Erdogan’s rule, which has increasingly pushed out people who are seen as ideologically or politically opposed to his Justice and Development Party…
…the purges of 150,000 public employees since the failed coup of 2016. …
Mr. Albayrak, 40, holds an M.B.A. from Pace University in New York, and worked as the United States representative for Calik Holdings, a Turkish construction and trading company known for its close links to the government.
… Mr. Yesilada called for a hefty interest rate hike of at least 5 percentage points and said that a “handshake with the United States is an absolute minimum.” …

European bank CDS showing no contagion (PDF; 13/08/2018) | @CanaccorGenuity
… Turkish debt-to-GDP is about half of what Greece’s was at the beginning of the European Debt Crisis. The fear in the marketplace is that the historic drop in the Turkish lire makes non-Turkish debt unaffordable to service, which could lead to a contagion effect on European banks with significant exposure to Turkey. …
… The Turkish currency crisis provides an excellent excuse for a temporary pullback, but thus far has shown no reason for us to adopt a more intermediate-term defensive position.

How serious is Turkey’s lira crisis and what are the implications?: The options as the country’s economic growth displays the classic signs of overheating (13/08/2018) | Larry Elliott @guardian
… now displaying the classic signs of overheating: a large trade deficit, a construction boom and soaring debt. Financial markets have taken fright at inflation, rising at an annual rate of more than 15%, and have been selling the Turkish lira, which is down by 45% against the US dollar since the start of the year. …
The direct impact of what looks like an inevitable recession in Turkey would be relatively small because, despite a population of 80 million and strong growth in recent years, the country accounts for only 1% of global GDP. …
… Turkey’s problems are particularly acute because it has more than $300bn of dollar-denominated corporate debt, which is getting more expensive to finance by the day. However, other countries – such as Mexico and South Africa – also took advantage of low US interest rates in the years after the financial crisis to borrow heavily in dollars and saw their currencies coming under pressure. …
… only two things will halt the lira sell-off: a substantial rise in official interest rates (already above 17%) or the announcement of an emergency package of financial support from the International Monetary Fund – or, if things continue to deteriorate, both together. …

What the Turkish lira crisis means for President Erdogan’s hold on power: Erdoğan built his supporter base by promising economic stability. Can he withstand a crisis? (14/08/2018) | YÖRÜK BAHÇELI @NewStatesman
… Erdoğan is known to have been opposed to higher interest rates throughout his leadership, labelling them “the mother and father of all evil” dictated by an “interest rate lobby”. In his earlier years, however, officials around him were able to convince him to allow them to act in line with market demands, while he was also bound by IMF requirements. But once IMF programmes came to an end and interest rates fell following the great recession, Erdoğan was able to become more vocal and staunch in his opposition to higher rates. …

Russia backs non-dollar trade with Turkey, no promise of help amid lira crisis (w Video; 08/15/2018) | Andrey Ostroukh and Tuvan Gumrukcu @reuters @YahooFinance
… “I am confident that the grave abuse of the role of the U.S. dollar as a global reserve currency will result over time in the weakening and demise of its role,” Lavrov said, echoing statements made by President Vladimir Putin.
However, Lavrov did not announce any immediate commitment to drop the dollar in trade with Turkey or provide it with financial aid, leaving observers guessing if the two countries, both hit by U.S. sanctions, have agreed on any bilateral deal.
“They will likely just give warm words to Turkey, looking to exploit the situation and stir things up for the U.S. and the West,” said Timothy Ash, senior strategist at BlueBay Asset Management. …

‘Clear risks of contagion’: European markets drop as Turkey’s lira crisis spreads around the world (08/13/2018) | Will Martin @businessinsider @YahooFinance
… “Because of the high participation of foreign banks and portfolio investors in Turkey, there are clear risks of contagion,” Hasnain Malik, a strategist who is the head of equity research at Exotix, said in an email.
Capital Economics warned in a note on Friday that Spain, Italy, and France were likely to be the worst hit by the Turkish currency crisis because of the exposure of their banking systems. But the analyst house said the impact would be relatively limited because of the limited size of the Turkish economy.

Turkey lira crisis: Six things you need to know: A breakdown of the events, causes and effects, as Turkey’s currency collapses amid a diplomatic row with the US. (w Videos; 08/14/2018) | @aljazeera
… On Monday, the Indian rupee suffered its worst one-day fall – at more than 1.5 percent – hitting a record low of 69.9 rupees to $1. …
The South African rand has also taken a hit this week as a result of the Turkish developments, falling 10 percent before stabilising on Monday – down to a two-year low against the dollar. …

Turkey lira: Ankara to boycott US electronic goods (14/08/2018) | @BBC
Asian shares stumble as markets shrug off Wall Street relief bump; Hang Seng down 1.5% (08/15/2018) | @CNBC
Turkey Lira: Shock graph showing how Turkey CRISIS is deepening when pitted against euro (08/14/2018) | Matt Drake @Daily_Express


US Policy Changes Vol.97 (Foreign Policy Vol.13)

https://twitter.com/policypodcasts/status/1024737870542712832


Brittle Times for the Transatlantic Relationship (PDF; in large part in German) | Cathryn Cluver Ashbrook @ Atlantik-Brucke


Belfer Center Experts on U.S. Withdrawal from the Iran Nuclear Deal (05/08/2018) | Graham Allison, Nicholas Burns, Matthew Bunn, Chuck Freilich, Hassan Ahmadian, Martin B. Malin, Steven E. Miller, Payam Mohseni, Ernest J. Moniz, Sahar Nowrouzzadeh, Nawaf Obaid, Gary Samore, Elizabeth D. Sherwood-Randall, William H. Tobey @BelferCenter


A timeline of the Trump administration’s actions on Russia (07/26/2018) | @BrookingsInst


Kazakhstan Must Look Beyond the Belt and Road | Philippe Le Corre


Belfer Center Experts Offer Insight on U.S.-North Korea Summit


US Policy Changes Vol.93 (Foreign Policy Vol.10)


Taking History as a Mirror (w PDF; June 2018) | Neil Thomas @BelferCenter


Trump’s focus on China trade: Right target, wrong approach (06/14/2018) | Ryan Hass @BelferCenter


Ukraine fears falling victim to Trump-Putin ‘grand bargain’ (11/11/2016) | Neil Buckley and Roman Olearchyk @FT


Free papers, reports, et al. Vol.46


https://twitter.com/IFRI_/status/973966653598912514


Middle East Vol.10 (Iran Vol.6 – US Withdrawal from Nuclear Agreement)


Middle East Vol.9 (Iran and miscellaneous)

Op-ed: The Fruits of Iran’s Victory in Syria | Ariane Tabatabai @Lawfare
Donald Trump Doesn’t Understand What’s Happening in Iran (01/01/2018) | Ariane Tabatabai @TheAtlantic
“Fix” the Iran deal, but don’t move the goalposts (01/18/2018) | Robert Einhorn @BrookingsInst


How to Stop Iran’s Missile Program (12/10/2017) | Henry Sokolski and William H. Tobe @TheNatlInterest
How the Trump Administration is Boosting Iran’s Hardliners (10/10/2017) | Ariane Tabatabai @TheAtlantic
Managing U.S.-Iran Relations: Critical Lessons from the Iran-Iraq War (w PDF; November 2017) | Ariane Tabatabai Annie Tracy Samuel
Afghanistan: Another Victory for Tehran? (10/08/2017) | Ariane Tabatabai @lawfareblog https://lawfareblog.com/afghanistan-another-victory-tehran Nuclear Energy and the Spread of Nuclear Weapons: How Worried Should We Be? (w PDF; November 2017) | Nicholas L Miller @Journal_IS
Why Nuclear Energy Programs Rarely Lead to Proliferation (Fall 2017) | Nicholas L Miller @Journal_IS
Former Obama Deputy Secretary of Energy Dan Poneman On The Key Component To Lowering CO2 Emissions: Nuclear Power (Voice; 06/06/2017) | Hugh Hewitt


A Trump doctrine for the Middle East (04/16/2018) | Martin S. Indyk @BrookingsInst

Why Israel Needs to Escalate Its Threats Against Iran ? Right Now (04/14/2018) | Chuck Freilich @Haaretz
How the peace process killed the two-state solution (04/12/2018) | Khaled Elgindy @BrookingsInst
Israel and Trump are at odds on Syria (04/11/2018) | Natan Sachs @BrookingsInst


Middle East Vol.8 (Syria Vol.2)


Trump’s “Red Line” Moment in Syria? (04/12/2018) | BENNETT SEFTEL @thecipherbrief
The International Community Will Not Tolerate the Normalization of the Use of Chemical Weapons | James A. (Sandy) Winnefeld, Jr. @CBSNews
Can a one-off military strike deter Syria’s Assad from using chemical weapons again? The data suggests no (04/11/2018) | Chris Meserole @BrookingsInst
Op-ed: Trump’s Problem in Syria? It Was Obama’s Too | Susan Rice @nytimes
DEEP DISH: WHAT DID THE SYRIA STRIKE ACCOMPLISH? (Podcast; 04/19/2018) | Greg Jaffe, Ivo Daalder, Brian Hanson @ChicagoCouncil
Op-ed: Mission Far From Accomplished in Syria | Simon Saradzhyan @RussiaMatters
TV Interview: No ‘Thank-you’ Yet for Trump Before Job is Done in Syria | Meghan O’Sullivan @CNBC
How do we prevent ISIS 2.0? Withdrawing from Syria is not the answer (04/07/2018) | Pavel K. Baev, Ryan Crocker, and Michael E. O’Hanlon @BrookingsInst
Op-ed: Trump’s Syria whiplash (04/11/2018) | Amanda Sloat @BrookingsInst
Reasons W Should be Skeptical About the U.S.-led Attacks on Syria | Rami Khouri @agenceglobal
President Trump’s Syria Strikes Are Not About Syria (04/16/2018) | Robert M. Danin @MEastMatters @CFR_org
Op-ed: Has Trump Become a Realist? | Stephen Walt @ForeignPolicy
Op-ed: The War is the Vortex of Roughly Three Conflicts | Karl Kaiser @ Metro UN
The World After Trump: How the System Can Endure | Jake Sullivan @ForeignAffairs
Op-ed: The Problem With “Cold War” Comparisons | Odd Arne Westad @newrepublic
On Donald Trump and Russia (04/09/2018) | Danielle Pletka @AEI
Pushing back Russia in the Middle East: A thought experiment (04/13/2018) | Daniel L. Byman @BrookingsInst


Middle East Vol.7 (Syria Vol.1)


US Policy Changes Vol.80 (Middle East Vol.6)

Great stuff!


Are Oil Prices Heading for Another Spike? (01/31/2018) | Carmen Reinhart, Vincent Reinhart @ProSyn @BelferCenter
OPEC’s Misleading Narrative About World Oil Supply (w PDF; March 2017) | Leonardo Maugeri @BelferCenter
Inside the Middle East Q&A: Ali Ahmad on Nuclear Power and Energy in the Middle East (Podcast; 02/20/2018) | @BelferCenter
A Lasting Defeat: The Campaign to Destroy ISIS (October 2017) | Ash Carter @BelferCenter
The Syrian crisis: A reckoning and a road map (09/12/2017) | Itamar Rabinovich @BrookingsInst
Don’t underestimate Kurdistan’s resilience (09/22/2017) | Ranj Alaaldin @BrookingsInst
A political surge is what’s needed in Afghanistan (05/30/2017) | Douglas Lute @thehill
Is it time for India to play a role in Israeli-Palestinian peace? (02/22/2018) | Kadira Pethiyagoda @BrookingInst
Who is responsible for solving Gaza’s massive electricity crisis? (02/05/2018) | Diana B. Greenwald @washingtonpost
Iran and Israel face off in Syria, as if it wasn’t complicated enough (02/13/2018) | Dror Michman and Yael Mizrahi-Arnaud @Brookingsinst
A Poorly Negotiated Saudi Nuclear Deal Could Damage Future Regional Relationships (02/05/2018) | Henry Sokolski, William H. Tobey @TheNatlInterest
Saudi Reforms Get a Boost From Google (02/04/2018) | Karen Elliott House @WSJ
Trump, Jerusalem, and a dispensable Arab region (12/06/2017) | Rami G. Khouri @agenceglobal
Jerusalem: securing spaces in holy places (07/31/2017) | Beverley Milton-Edwards @BrookingsInst
Jerusalem: After 30 years of hope and failure, what’s next for Israel/Palestine? (12/13/2017) | Hady Amr @BrookingsInst
Has Israel Grown Too Dependent on the United States? (02/05/2018) | Chuck Freilich @mosaicmag
How much does BDS threaten Israel’s economy? (01/26/2018) | Dany Bahar and Natan Sachs @BrookingsInst
The two things that will determine Netanyahu’s fate (02/15/2018) | Natan Sachs @BrookingsInst
Trump Wants to Attack North Korea? He Should Learn from Israel First (02/01/2018) | David Ignatius @washingtonpost
Cooperation in the Libya WMD Disarmament Case (PDF) | William Tobey
Verifying the Elimination of Nuclear Weapons and Providing Assurance against Breakout (w PDF; February 2018) | John Carlson @BelferCenter
The World Doesn’t Need Any More Nuclear Strategies (02/06/2018) | Stephen M. Walt @ForeignPolicy


Middle East Vol.5 (Iran Vol.5 – Nuclear Agreement Vol.5)


https://twitter.com/_JMBP_/status/947652984183427073


Middle East Vol.4 (Iran Vol.4 – Nuclear Agreement Vol.4)

What the Iran nuclear deal means for oil prices (07/15/2017) | @bradplumer @vox
Oil prices slide as Iran’s nuclear deal spells trouble for U.S. shale (07/14/2015) | Geoffrey Smith @fortune
How Would The Iran Nuclear Deal Impact Oil Prices? (06/29/2015) | @forbes
Iran-US Interim Agreement: Historic Breakthrough or Historic Sellout? (12/10/2013) | Dr James Petras @NewsBud_
Iran-US Regional Relations Subsequent to Nuclear Agreement (07/26/2015) | Masoud Rezaei @Iran_Review
World powers reach nuclear deal with Iran to freeze its nuclear program (11/24/2013) | Anne Gearan and Joby Warrick @washingtonpost
Why Europe Backs Obama on Iran (04/07/2015) | Carl Bildt @berggruenInst @HuffPost
Iran Nuclear Agreement | @plough_shares
Iran: Inside the Deal | @AJEnglish
Nuclear Iran | @cbsnews
Iran | @bilaterals_org


Middle East Vol.3 (Iran Vol.3 – Nuclear Agreement Vol.3)

Ernest J. Moniz Addresses Global Nuclear Risks (Speech; 01/11/2018)
Information Note on EU sanctions to be lifted under the Joint Comprehensive Plan of Action (JCPOA) (PDF; 23/01/2016)
Annex II: Sanctions-related commitments | @StateDept


Iran: One year since sanctions relief (17/01/2017) | Henry Smith @Control_Risks
Iran: Flexibility in contract negotiations to arise out of uneven enforcement of local content regulations (10/05/2017) | Henry Smith @Control_Risks


Middle East Vol.2 (Iran Vol.2 – Nuclear Agreement Vol.2)

Why the Iran protests matter (Voice; 01/02/2018) | Suzanne Maloney @BrookingsFP
Iran nuclear deal: Key details (13/10/2017) | @BBC
Iran Nuclear Agreement (PDF; 09/15/2017) | Kenneth Katzman & Paul K. Kerr @CRS4Congress
Full text of the Iran nuclear deal (14/07/2015) | @washingtonpost
Iran’s Nuclear Ambitions and Political Theory (06/03/2012) | Allison Kushner @FPA_ORG
HARVARD POLL ON RENEGOTIATING IRAN NUCLEAR DEAL USED “BLATANTLY BIASED QUESTION” (10/28/2017) | Murtaza Hussain @theintercept
Saving the Iran Nuclear Deal, Despite Trump’s Decertification (13/10/2017) | @CrisisGroup
The Real Promise of the US-Iran Agreement – Yes, it will prevent Iran from developing nukes. But it could also transform the Middle East, bringing  order and peace to a region falling into chaos. (07/16/2015) | @thenation
Proxy War Over Iran Nuclear Deal Divides U.S., Europe at UN (10/12/2017) | Kambiz Foroohar @bpolitics
The Iran Nuclear Deal – A Simple Guide (03/31/2015) | @nytimes
Trade – Iran | @EU_Commission


https://twitter.com/CFR_org/status/952571019239149568


Middle East Vol.1 (Iran Vol.1 – Nuclear Agreement Vol.1)