Sputnik: In your view, what complications can this message from the US president lead to in Ankara-Washington relations?
The conflict between Turkey and the United States about these S-400s was the main point for a while between Turkey and the US. This decision, I think, is also a little bit [painful] for the Turkish economy, because the total volume of exports from Turkey to the United States was around $10 billion, and $1.7 billion of that trade were under this preferential or duty-free exemption. By this decision, I think President Trump tried to give a message to the Turkish government that this political tension between Turkey and the US, if it goes again, then there will be some economic consequences. Because you may remember in October, President Trump threatened the Turkish government [with] hurting the Turkish economy with some kind of sanctions. I think this is a tool that President Trump is using to keep Ankara under pressure by some kind of economic issues.
Sputnik: Can you give us a bit more information with regard to the specifics in the economic trade agreement on arms sales between the two countries?
This is the only way that President Trump, with the last year of experiences, understood that the Turkish government is under pressure from economic challenges and he is using these challenges as a tool to keep the Turkish government to the track that they want it to be; but the Turkish government is still insisting about buying those S-400s from the Russian government. I think this debate will be a hot topic for the next few weeks, between Turkey and the US, Turkey and Russia, the main topic that we will be following for the next few weeks.
Oguz Demir: When you look to the numbers, especially after the crisis in August 2018 in Turkey, the main thing was now that the interest rates are 25 percent, which is huge trouble for not only the construction industry, but also for the all economy, because the consumers have been under the pressure of debt burden and the companies, especially the real [estate] industry and the construction industry, do not have easy access or cheap access to the credit that they used to get in 2003-2005. The inflation rate was announced at around 20 percent, which is very high for the Turkish economy.
I think that the main point here was the exchange rates. The Turkish lira‘s depreciation in the last year was around 80-90 percent, now it is balancing, but on the other hand, still, we are feeling the impact of these curves of the depreciation within the country. The Turkish-US relations were one of the major factors that affected this depreciation. This increasing tension between Turkey and the international community, if the US dollar again starts to gain value or Turkish lira starts to depreciate, this is the new perception within the country. Everybody is looking to the currency rates, and if there will be another huge depreciation in the Turkish lira, everybody knows that inflation will rocket [up] again.
Sputnik: What kind of response can we expect from Turkey on this issue between Turkey and the US government, with regard to the duty-free products that we were discussing?
Oguz Demir: I think the Turkish government will in the first instance will not fight back, because, as you see, in this case not only Turkey, but India is also written in the letter by President Trump to be out of the US government's duty-free exemption. So I think the first thing [is] the Turkish government will follow to figure out how to fix this problem. President Trump mentioned in his letter that the Turkish government, Turkey with its economy, is not a developing economy anymore, but a developed economy, it has high GDP. I think this is just an excuse.
The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.