First, Turkey’s much-heralded economic growth spurt of the 2000’s has come to a grinding stop.In other words, Turks have been living well by racking up credit card debt and they've about reached their limit, meaning consumption is going to drop and an economic downturn will follow.
According to the Turkish central bank, consumer debt is now almost equal to total personal income in Turkey, vs. a bit over 20% in the United States. The average interest rate on consumer debt, the central bank reports, is just under 17%.
Secondly, Turkey’s internal cohesion is at risk due to the rapid increase of its Kurdish-speaking minority and the relative decline of the ethnic Turkish population.Regardless of Erdogan's wishes, ethnic Turks are behaving like Europeans while ethnic Kurds are behaving like more typical Muslims - having large families. Perhaps, over time Turkey will morph into Kurdistan, eh?
Despite Erdogan’s exhortations on behalf of Turkish fertility, the baby bust in Turkish-majority provinces continues while Kurds sustain one of the world’s highest birth rates. Even worse, the marriage rate outside of the Kurdish Southeast of the country has collapsed, portending even lower fertility in the future.
Goldman's bigger point: Erdogan's victory over the Turkish military, and perhaps over Gulen's followers, is likely to be short-lived. In the longer run, Turkey looks like a loser living in a bad neighborhood. Hat tip to Lucianne.com for the link.
