Sandzak wrote:The Turks invested instead in education and infrastructure, they built skyscrapers... same mistake like Spain.
The Turks are now fully employed, because their currency is low, so are the wages for foreign companies...
Increasing the interest rate like the IMF wants would stabilize the currency but kill the economy with a vicious cycle of economic downturn.
Uhh, what is the point of any salary if you can't buy anything with it? To buy just the basic food and that is it?
In essence what Erdogan does by increasing interest rates and devaluing the lira is make sure that the state can't go bankrupt but this makes the regular people unable to buy anything besides the basics that are locally produced and small and medium business unable to plan long ahead. The large businesses probably can store in foreighn currency so it is not that a big of a deal for them. At some point, if this continues then everyone is gonna be on minimum salary and that is it. His killing all the middle class and specialists, there is literally no point for them to stay in Turkey or work in Turkey.
So over a long period of time this masks economic inefficiency and corruption that goes in to the pockets of whoever is doing it. And the longer this continues, the more damaged the economy will become. Basically it can continue for a long time but these measures also have an expiration date because it is artificial competitiveness. And once that happens, I am not sure what TUrkey will be able to do.
There is too many downsides with this policy.