“What’s in a name? That which we call a rose by any other name would smell just as sweet.”
Shakespeare usually hits the nail on the head (I bet that’s a quote from him too) but not this one. We all know names make a difference. My mother wanted to call me Quintin St John. She had delusions of grandeur. My older-by-seventeen-years brother said he would leave home and never return. So I became Christopher Paul Davies.
Btw if you ever mention the Quintin St John thing, I will hunt you down. I promise.
Turkish names usually have a meaning. Anything beginning with Ay… is Moon.. . for instance. In my previous blog I had a bit of fun with Sınan Oğan’s name as Soğan means onion. The man certainly peeled off a few layers and made me weep when he pitched in his lot with Erdoğan’s.
Incidentally, the Headline writers were all lining up “Erdo-gone” when this looked possible. After his victory, they could have run with “Erdo-won” which I never saw but maybe that is no laughing matter.
Now we have newly appointed Finance Minister Mehmet Şimşek. Şimşek means lightning. And lightning never strikes twice. But our Mr Lightning was Finance Minister from 2009 – 2015 and then Deputy PM until the office was abolished. So will he be the exception to the old proverb? (Just noticed that he graduated from Exeter University, my old Alma Mater. He is also Kurdish. Well, well).
Şimşek is the sort of man the International Market Men like. He is a pin-up boy for the money men. He is clever and looks like it for a start. Imagine the progeny of a love match between Marie Curie and Jacob Rhees-Mogg Then too, he did seven years at Merril Lynch. And there is that Exeter connection. Got to be smart to go there.
He is going to need that intelligence and some! All those favours from liberal countries like Russia, Qatar, Saudi are now being called in. The bills are due. Keeping the lira steady when the inflation is running high but interest rates are kept low has required all sorts of manouevres. Foreign currency reserves have all been used up too. Erdoğan, basically, has run out of road. Şimşek was approached prior a while ago but said “Thanks but not this time”. He could read the opinion polls too.
Then after the surprise victory for AKP I guess they made him an offer he could not refuse. Maybe a picture of his grandchildren coming out of school captioned “Lovely family Mehmet Bey. Wondered whether you might after all, want to reconsider being the fall guy New Finance Minister?
So, in Türkiye Lightning is going to strike twice.
Which means that we are now going to see whether Şimşek is given his head to return Turkey to the fold and bring back foreign investment. A prime requirement will be to allow the lira to find its real value, a controlled depreciation. Which is what we are seeing. The Pound Lira rate has gone from 24.5 to 28 in a couple of days (or it had when I started writing). Where will we go from here? The lira has still a long way to fall to find its true, much lower value and interest rates will have to rise.
This little graph of GBP/TL gives the idea of what is happening
And then there is price inflation. We all know our pound does not go as far as it used to but the official satıstical office (TÜİK) will not publish the basket of goods it uses to gauge inflation. And you can incur goal time for proposing alternative figures. So, I did a little digging.
Having located on the Turkish web a Migros receipt for January 30 2021 I compared it against the same products today. I then compared the increase in the GBP against the lira (it is 147%) and adjusted to compensate for this
As you can see the Pound Sterling has increased by 147% over the last 28 months (I did not include the last 3 day freak increase). But compared to the increase in prices that increase in the value of the pound just does not hold water (pun alert) even when compared to the cost of incontinence pants! Let alone that excellent Waffle Mixture which, after adjusting for the gain in the currency, will cost you 146% more.
A word on those incontinence pants; Firstly I greatly admire the Turk who posted his receipt online with such an indelicate item included. Bravo. Would not have done it myself. Secondly there are several variations available from Migros Online but I think I have captured the same article. However, I did not want to spend too long on it, thus allowing Google’s algorithm to start bombarding me with similar items for sale. Also I did not want to be surprised by Special K, who might not have believed the “just doing some research” angle.
But I think it is a useful comparison and checks out with what I see in the shops. Turkey’s currency is hugely overvalued. It has been propped up by all sorts of tricks. I know it. You know it and the markets know it. Shame that a high percentage of the electorate did not.
Those, like me, who earn in sterling and spend in lira are feeling the pinch. As will foreign tourists, with huge reductions in purchasing power. All the above are kind of staple items, rises in the costs of alcohol and foreign products will show much bigger increases.
So holidaymakers will be having to make their budgets go a lot further. They will be looking for value. If Kalkan businesses are sensible they will be looking to enhance their value proposition. Those that do not will be swimming against the tide.
In the meantime, grab some of those incontinence pants. At an increase of only 20% they are a steal.