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Economic Fears Grip Turkey

Turkey’s currency this month has suffered heavy falls triggered by U.S. Turkish tensions over the ongoing detention of an American pastor. Washington’s threat to impose new economic sanctions sparked another steep currency drop Friday. Dorian Jones reports from Istanbul on the economic fall out for people in Istanbul.

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Economic Fears Grip Turkey

Turkey’s currency this month has suffered heavy falls triggered by U.S. Turkish tensions over the ongoing detention of an American pastor. Washington’s threat to impose new economic sanctions sparked another steep currency drop Friday. Dorian Jones reports from Istanbul on the economic fall out for people in Istanbul.

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Economic Fears Grip Turkey

Turkish President Recep Tayyip Erdogan is vowing he won’t back down in the deepening dispute with Washington.

“They were not able to make us collapse and they never will. If they have their dollars, we have our God. We will walk toward the future together with firm steps,” Erdogan said to thousands of party members at the national congress of his ruling AKP Party in Ankara.

Turkey’s currency plummeted this month following Washington’s trade tariffs and sanctions, as bilateral tensions escalated. Those tensions intensified Friday when a Turkish court ruled for the continued detention of American Pastor Andrew Brunson.

Brunson trial

Brunson, who is being tried on terrorism charges, is a big part of the disagreement between the two NATO allies. Before Friday’s ruling U.S. President Donald Trump tweeted, “Turkey has taken advantage of the United States for many years,” adding, “We will pay nothing for the release of an innocent man, but we are cutting back on Turkey.”

Strain over Brunson’s ongoing detention cased the Turkish lira to fall Friday. Further declines of the Turkish currency are anticipated because of expected additional U.S. sanctions. “We have more that we are planning to do if they don’t release [Mr. Brunson] quickly,” said U.S. Treasury secretary Steven Mnuchin on Thursday.

The Turkish lira has lost nearly 40 percent recently, with roughly half of the losses this month.

 

Istanbul’s Kadikoy neighborhood is the heart of the Asian side of the city. Shops and traders are struggling to come to terms with the wild gyrations in the currency’s value.

Imported goods

Stores depending heavily on imported goods are among the hardest hit.

“Ninety percent of the goods we sell are imported goods,” said Taylan Akcora, a sporting goods shop owner in Kadikoy.

“They are all brands [we sell] and imported to Turkey from the Far East,” he continued. “There are firms who import them [shoes], we buy all our goods from the Turkey distributor of the brand. They will surely put up the prices.”

Turkey is no stranger to a currency crisis, all of which invariably resulted in a surge in inflation and unemployment. The country’s heavy dependence on imports is exacerbating the impact of the currency depreciation. Energy-poor Turkey imports more than 90 percent of its oil and natural gas.

Aslan Yuce runs a tea shop on Kadikoy’s main street. Yuce claims fear of the future is stalking the streets.

“No one is feeling secure. There is no one looking at the future with hope,” he said. “I am a shop owner here, and I see people passing by, everyone looks grim, or thoughtful as if they all lost their hopes about their lives. There is such a psychological situation here,“ Yuce added.

Pharmacy sector

However, it’s the sick who could be the first to suffer. “The rise in the value of the U.S. dollar and the general foreign exchange rate will drastically affect our pharmacy sector, which is so dependent on imports,” said Guliz Kaptan, who has owned a pharmacy in Kadikoy for 30 years.  

“Turkish pharmaceutical producers will not even be able to purchase the active ingredients for the current selling price of the medicine on the shelf,” Kaptan added.

Much of the medicine used in Turkey is paid for at least in part by the government. President Erdogan expanded a social security network, especially for health. With rapid currency declines, however, cutbacks already have started.

“Another effect, under precautionary economic measures taken by the government,” Kaptan said. “The national health insurance has stopped paying for best-selling imported medicines, including anti-depressants.”

Further cutbacks could be in the offing with the uncertainty about the Turkish lira and for the broader economy. Two international credit rating agencies recently downgraded Turkey’s sovereign debt further into junk status.

Lira plummets

The ratings agencies both voiced fears about the management of the economy. “Over the last two weeks, the Turkish lira has exhibited extreme volatility,” said Standard and Poor’s rating service in a statement Friday. “This follows Turkey’s prolonged economic overheating, external leveraging, and policy drift,” S&P added.

Erdogan insists the Turkish economy remains strong, and the currency drop is a result of “economic missiles” from Washington. Economists warn even if the Turkish president reverses his stance and adopts steps called for by international investors, a painful road awaits Turkey. “It’s too late,” said analyst Atilla Yesilada of Global Source Partners.

“You can solve the currency problem. You can solve the political problems, but it’s too late to save the economy. A Brazilian type of recession has started. For the next year or two, Turkey will not grow. It will shrink in some quarters, a quarter of a percent of growth in some others. However, it’s going to be extremely painful,“ added Yesilada.

 

 

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Economic Fears Grip Turkey

Turkish President Recep Tayyip Erdogan is vowing he won’t back down in the deepening dispute with Washington.

“They were not able to make us collapse and they never will. If they have their dollars, we have our God. We will walk toward the future together with firm steps,” Erdogan said to thousands of party members at the national congress of his ruling AKP Party in Ankara.

Turkey’s currency plummeted this month following Washington’s trade tariffs and sanctions, as bilateral tensions escalated. Those tensions intensified Friday when a Turkish court ruled for the continued detention of American Pastor Andrew Brunson.

Brunson trial

Brunson, who is being tried on terrorism charges, is a big part of the disagreement between the two NATO allies. Before Friday’s ruling U.S. President Donald Trump tweeted, “Turkey has taken advantage of the United States for many years,” adding, “We will pay nothing for the release of an innocent man, but we are cutting back on Turkey.”

Strain over Brunson’s ongoing detention cased the Turkish lira to fall Friday. Further declines of the Turkish currency are anticipated because of expected additional U.S. sanctions. “We have more that we are planning to do if they don’t release [Mr. Brunson] quickly,” said U.S. Treasury secretary Steven Mnuchin on Thursday.

The Turkish lira has lost nearly 40 percent recently, with roughly half of the losses this month.

 

Istanbul’s Kadikoy neighborhood is the heart of the Asian side of the city. Shops and traders are struggling to come to terms with the wild gyrations in the currency’s value.

Imported goods

Stores depending heavily on imported goods are among the hardest hit.

“Ninety percent of the goods we sell are imported goods,” said Taylan Akcora, a sporting goods shop owner in Kadikoy.

“They are all brands [we sell] and imported to Turkey from the Far East,” he continued. “There are firms who import them [shoes], we buy all our goods from the Turkey distributor of the brand. They will surely put up the prices.”

Turkey is no stranger to a currency crisis, all of which invariably resulted in a surge in inflation and unemployment. The country’s heavy dependence on imports is exacerbating the impact of the currency depreciation. Energy-poor Turkey imports more than 90 percent of its oil and natural gas.

Aslan Yuce runs a tea shop on Kadikoy’s main street. Yuce claims fear of the future is stalking the streets.

“No one is feeling secure. There is no one looking at the future with hope,” he said. “I am a shop owner here, and I see people passing by, everyone looks grim, or thoughtful as if they all lost their hopes about their lives. There is such a psychological situation here,“ Yuce added.

Pharmacy sector

However, it’s the sick who could be the first to suffer. “The rise in the value of the U.S. dollar and the general foreign exchange rate will drastically affect our pharmacy sector, which is so dependent on imports,” said Guliz Kaptan, who has owned a pharmacy in Kadikoy for 30 years.  

“Turkish pharmaceutical producers will not even be able to purchase the active ingredients for the current selling price of the medicine on the shelf,” Kaptan added.

Much of the medicine used in Turkey is paid for at least in part by the government. President Erdogan expanded a social security network, especially for health. With rapid currency declines, however, cutbacks already have started.

“Another effect, under precautionary economic measures taken by the government,” Kaptan said. “The national health insurance has stopped paying for best-selling imported medicines, including anti-depressants.”

Further cutbacks could be in the offing with the uncertainty about the Turkish lira and for the broader economy. Two international credit rating agencies recently downgraded Turkey’s sovereign debt further into junk status.

Lira plummets

The ratings agencies both voiced fears about the management of the economy. “Over the last two weeks, the Turkish lira has exhibited extreme volatility,” said Standard and Poor’s rating service in a statement Friday. “This follows Turkey’s prolonged economic overheating, external leveraging, and policy drift,” S&P added.

Erdogan insists the Turkish economy remains strong, and the currency drop is a result of “economic missiles” from Washington. Economists warn even if the Turkish president reverses his stance and adopts steps called for by international investors, a painful road awaits Turkey. “It’s too late,” said analyst Atilla Yesilada of Global Source Partners.

“You can solve the currency problem. You can solve the political problems, but it’s too late to save the economy. A Brazilian type of recession has started. For the next year or two, Turkey will not grow. It will shrink in some quarters, a quarter of a percent of growth in some others. However, it’s going to be extremely painful,“ added Yesilada.

 

 

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Taliban Chief: US Offers to End Afghan War ‘Neither Rational Nor Practical’

The fugitive Taliban leader renewed his call Saturday for direct talks with the United States, dismissing as impractical and unacceptable “propositions” he asserted Washington has offered to promote a negotiated end to the war in Afghanistan.

Malawi Hibatullah Akhundzada, in a message to his followers ahead of the Muslim festival of Eid, has for the first time offered some details of a recent “preliminary” meeting between Taliban and American officials.

Senior diplomat for the region, Alice Wells, led the U.S. delegation in the July 23 talks in Qatar, where the Taliban operates its so-called “Political Office.” But neither side shared any detail until now.

The Taliban confirmed and described the discussions as “useful,” saying they were aimed at paving ground for future contacts between the two sides. But the insurgents shared no other details until now. Afghan government officials did not participate in the talks reportedly due to opposition from the Taliban.

Akhundzada explained the demand for direct peace talks with the U.S., saying the “ongoing war is the birth-child of American occupation” and only Washington can determine a deadline for the withdrawal of all American and NATO forces from Afghanistan.

“But in order to avoid responsibility for this war, the Americans propose options other than constructive negotiations that are neither rational nor practical; rather it is these same propositions that prolong this war for America, make it costlier and nudge it towards failure.”

Akhundzad did not elaborate on exactly what options U.S. officials put on the table. But Washington maintains it is ready to support and facilitate an intra-Afghan peace process under the leadership of the government in Kabul, cautioning that no solutions imposed from outside could help end the conflict.

The Taliban dismisses Afghan rulers as “stooges of America” and refuses to engage in any intra-Afghan talks until all foreign forces leave the country.

The Taliban chief asserted that Washington’s readiness for a “sincere, transparent and results-oriented” direct dialogue will be viewed by his group as “a sound step by America” and accepting the Afghan ground realities.

“But negotiations must be sincere and productive, free from any fraud and deception and must revolve around the core issue and not be used for propaganda or misleading the common thinking,” said Akhundzada.

The Taliban controls or hotly contests nearly half of the 407 Afghan districts. The insurgents have in recent weeks captured new territory and inflicted massive battlefield casualties on embattled Afghan security forces.

The Taliban last week came close to capturing the strategically important southeastern city of Ghazni before they were forced to retreat by Afghan forces with support from U.S. airpower after several days of deadly fighting.

The clashes reportedly killed 500 people, including Afghan forces, insurgents and civilians, beside causing massive destruction in the historic city.

In June, the Islamist insurgency for the first time in the 17-year war had ceased hostilities for three days, allowing Afghans to peacefully celebrate the Eid-ul-Fitr festival marking the end of the fasting month of Ramadan.

The unprecedented temporary cease-fire coincided with the Afghan government’s unilateral cease-fire. The mutual gesture, though temporary, enabled Afghan soldiers and Taliban insurgents to interact, share Eid greetings and gifts, suggesting both sides were tired of the prolonged conflict.

But the Taliban swiftly dismissed those assertions and insisted its cease-fire was meant primarily to discredit “propaganda” the insurgency was not  a unified force and did not have control over its field commanders.

Afghanistan and the rest of the Islamic world are preparing to celebrate another annual festival next week, known as Eid-ul-Adha.

There are hopes the warring sides may again observe a cease-fire to ease sufferings of ordinary Afghans, although Taliban chief Akhandzada in his Saturday’s Eid message did not hint at any such undertaking.

Afghan officials said Saturday President Ashraf Ghani was consulting his aides, civil society representatives and government peace negotiators on whether or not the government should halt counter-insurgency operations during the upcoming Eid festivities.

According to findings of a European Union-funded survey released Saturday, more than 90 percent of Afghans want the government and the Taliban to observe a permanent cease-fire.

 

 

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Taliban Chief: US Offers to End Afghan War ‘Neither Rational Nor Practical’

The fugitive Taliban leader renewed his call Saturday for direct talks with the United States, dismissing as impractical and unacceptable “propositions” he asserted Washington has offered to promote a negotiated end to the war in Afghanistan.

Malawi Hibatullah Akhundzada, in a message to his followers ahead of the Muslim festival of Eid, has for the first time offered some details of a recent “preliminary” meeting between Taliban and American officials.

Senior diplomat for the region, Alice Wells, led the U.S. delegation in the July 23 talks in Qatar, where the Taliban operates its so-called “Political Office.” But neither side shared any detail until now.

The Taliban confirmed and described the discussions as “useful,” saying they were aimed at paving ground for future contacts between the two sides. But the insurgents shared no other details until now. Afghan government officials did not participate in the talks reportedly due to opposition from the Taliban.

Akhundzada explained the demand for direct peace talks with the U.S., saying the “ongoing war is the birth-child of American occupation” and only Washington can determine a deadline for the withdrawal of all American and NATO forces from Afghanistan.

“But in order to avoid responsibility for this war, the Americans propose options other than constructive negotiations that are neither rational nor practical; rather it is these same propositions that prolong this war for America, make it costlier and nudge it towards failure.”

Akhundzad did not elaborate on exactly what options U.S. officials put on the table. But Washington maintains it is ready to support and facilitate an intra-Afghan peace process under the leadership of the government in Kabul, cautioning that no solutions imposed from outside could help end the conflict.

The Taliban dismisses Afghan rulers as “stooges of America” and refuses to engage in any intra-Afghan talks until all foreign forces leave the country.

The Taliban chief asserted that Washington’s readiness for a “sincere, transparent and results-oriented” direct dialogue will be viewed by his group as “a sound step by America” and accepting the Afghan ground realities.

“But negotiations must be sincere and productive, free from any fraud and deception and must revolve around the core issue and not be used for propaganda or misleading the common thinking,” said Akhundzada.

The Taliban controls or hotly contests nearly half of the 407 Afghan districts. The insurgents have in recent weeks captured new territory and inflicted massive battlefield casualties on embattled Afghan security forces.

The Taliban last week came close to capturing the strategically important southeastern city of Ghazni before they were forced to retreat by Afghan forces with support from U.S. airpower after several days of deadly fighting.

The clashes reportedly killed 500 people, including Afghan forces, insurgents and civilians, beside causing massive destruction in the historic city.

In June, the Islamist insurgency for the first time in the 17-year war had ceased hostilities for three days, allowing Afghans to peacefully celebrate the Eid-ul-Fitr festival marking the end of the fasting month of Ramadan.

The unprecedented temporary cease-fire coincided with the Afghan government’s unilateral cease-fire. The mutual gesture, though temporary, enabled Afghan soldiers and Taliban insurgents to interact, share Eid greetings and gifts, suggesting both sides were tired of the prolonged conflict.

But the Taliban swiftly dismissed those assertions and insisted its cease-fire was meant primarily to discredit “propaganda” the insurgency was not  a unified force and did not have control over its field commanders.

Afghanistan and the rest of the Islamic world are preparing to celebrate another annual festival next week, known as Eid-ul-Adha.

There are hopes the warring sides may again observe a cease-fire to ease sufferings of ordinary Afghans, although Taliban chief Akhandzada in his Saturday’s Eid message did not hint at any such undertaking.

Afghan officials said Saturday President Ashraf Ghani was consulting his aides, civil society representatives and government peace negotiators on whether or not the government should halt counter-insurgency operations during the upcoming Eid festivities.

According to findings of a European Union-funded survey released Saturday, more than 90 percent of Afghans want the government and the Taliban to observe a permanent cease-fire.

 

 

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US Navy Hospital Ship to Deploy to Colombia

The United States is sending a U.S. Navy hospital ship to Colombia to help treat some of the hundreds of thousands of people who have poured over the border fleeing violence in Venezuela.

Defense Secretary Jim Mattis told reporters traveling with him to Washington from Bogata, Colombia, Friday that he would likely be sending the USNS Comfort based at Norfolk, Virginia. 

Mattis said those he spoke with in Bogata were “embracing” and “enthusiastic” about the upcoming ship deployment, which he stressed was “absolutely a humanitarian mission.”

“We’re not sending soldiers, we’re sending doctors,” Mattis said, without providing details on when the ship would set sail.

Hospital ships are typically deployed to provide life-saving treatment and medical care and to relieve the pressure on national health systems.

The U.S. defense secretary said he was given specific input, such as where best to deploy the ship, during talks Friday with his defense counterpart and newly inaugurated Colombian President Ivan Duque.

“They (Colombian leadership) not only agreed in principle, they gave details of how we might best craft the cruise through the region,” Mattis said.

Chile, Argentina and Brazil — the other stops on his South America tour — also provided input on the hospital ship deployment, according to Mattis.

Aware of Venezuelan sensitivities, Mattis stressed the U.S. hospital ship would not go into Venezuela’s territorial waters.

Jason Marczak, director of the Adrienne Arsht Latin America Center at the Atlantic Council, told VOA the situation in Venezuela has led to a migration crisis of global proportions “that is on track to potentially parallel or surpass the numbers that (have been) coming out of the Middle East.”

“If those migration numbers are not managed in an orderly, effective way, that has the potential to create greater instability in the countries to which migrants are going,” Marczak said.

As of June, an estimated 2.3 million people had fled Venezuela, mainly to Colombia, Ecuador, Peru and Brazil, according to the United Nations. U.N. officials reported at that time that more than half of those who fled were “suffering from malnourishment.”

The U.S. Navy has one other hospital ship, the USNS Mercy, which is based at San Diego, California.

USNS Comfort and USNS Mercy usually deploy for humanitarian missions with a diverse group of doctors on board hailing from multiple countries.

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Kosovo, Serbia Mull Territorial Swap in Quest to End Dispute, Join EU

A decade-long dispute between Kosovo and Serbia is compelling both countries to consider a territorial swap along ethnic lines — a move that has long been opposed by both Brussels and Washington. But the leaders of both Balkan countries say redrawing the borders could help them resolve their differences and advance in their quest for European integration.  

Experts have mixed opinions over whether such a deal is workable or even desirable. 

Ten years after Kosovo declared independence, there has been little to no progress between the two countries in settling their disputes. Kosovo considers itself a sovereign nation, though Serbia refuses to recognize it as such. Both countries want to join the European Union, but Brussels will not allow it until disagreements over Kosovo’s sovereignty are settled. 

WATCH: Trade of territory by Kosovo, Serbia brings concerns

Now, Kosovo’s President Hashi Thaci and Serbia’s President Aleksandar Vucic have suggested a deal to trade territory or change borders that could spark a breakthrough. Some experts caution, however, such a move could create myriad problems. 

“It would create instability, it would be dangerous. It could spark violence in Kosovo as well as in Serbia,” said David L. Phillips, director of the Program on Peace-building and Rights at Columbia University’s Institute for the Study of Human Rights. 

The proposed exchange would involve Serbia getting part of northern Kosovo, an area with a mostly Serb population, and Kosovo getting Serbia’s Presevo Valley, inhabited by a majority of ethnic Albanians. It also would mean the change would be along ethnic lines — anathema in Western thinking. 

“The principle of pluralism and democracy is something that is a cornerstone of U.S. policy. It’s also a cornerstone of Europe’s approach to countries that aspire to membership,” Phillips said. 

But David Kanin, adjunct professor of international relations at Johns Hopkins University and a former CIA senior analyst, notes that Europe has a history of changing borders and population movements. 

“That has not stopped. Every change in Yugoslavia since the old Yugoslavia collapsed has been about changing borders, moving people around, some supported by the West, some opposed,” he said.

Diplomatic gap?

In the past, both Brussels and Washington have shot down the idea of redrawing borders along ethnic lines, but this time it appears they are not in agreement. 

The European Union has not openly commented on this issue. The office of the EU’s top diplomat, Federica Mogherini, has not responded to VOA questions about this issue. 

German Chancellor Angela Merkel has rejected any changes to the borders, saying, “The territorial integrity of the states of the Western Balkans has been established and is inviolable.”

The U.S. position has been more ambiguous. In a statement to VOA’s Albanian Service, the State Department said the solution should come from the parties themselves. It also said the parties should show flexibility, but stopped short of rejecting the idea of a border change. 

“If Kosovo and Serbia were able to agree on a settlement that would allow for permanent peace that would allow for mutual recognition, I think that would help settle politics in Serbia in some ways. It would give Kosovo a way forward,” said Kurt Volker, U.S. Special Representative for Ukraine Negotiations, a former U.S. ambassador to NATO. 

Phillips, a former State Department senior adviser, suggested a lack of clarity does not signal a new policy.

“The U.S. government does not have a coherent policy toward Kosovo. It doesn’t pay any attention to the Western Balkans. I don’t think we should read too much into these vague and ambiguous statements. Right now U.S. policy remains as it always has been. It recognizes Kosovo within its current frontiers. That hasn’t changed.”

Benefits, ramifications

Even if the idea is officially included in the EU-mediated Kosovo-Serbia dialogue, many questions remain, including whether Serbia should recognize Kosovo first and what that would portend.

“The discussion right now around partition, as noisy as it is, is dealing with the secondary issue of who gets what territory,” said Kanin. “The question of Kosovo’s sovereignty is the central issue and that will remain open as long as it is not recognized by Serbia and by the five outstanding EU members. And I see no sign that this is going to change.”   

EU members Spain, Slovakia, Cyprus, Romania and Greece still have not recognized Kosovo’s independence.

“Here it is a disservice to everybody in the Balkans, first of all the Kosovars, that their state is not recognized by Serbia, that they are not recognized by all members of the European Union and therefore they’re blocked in some of their relationships with the EU,” said Volker.

Experts and former diplomats warned that rethinking borders in the Balkans would pose a risk to stability in the region. 

“If the EU isn’t prepared to mediate a deal that allows Serbia to recognize Kosovo within its current frontiers, then Albanians will start thinking of unification of Albanian territories and creating an Albanian state that encompasses lands where all Albanians live,” Phillips predicted.

That concern is amplified, given the sizable Albanian minority in Macedonia, a country dealing with its own agreement about a name change with Greece. And Serbs in Bosnia already have said if Kosovo gets a U.N. seat, they will request the same.

The latest debate suggests there are no clear-cut prescriptions for a region attempting to shed the vexing legacy of the 1990s conflicts.

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