Toasty Turkey

Several years ago I highlighted Turkey as a potential geopolitical hotspot because its long-term chart showed potential for an extreme decline. See: Geopolitical Forecasting Through Technical Analysis: Is Turkey About to Destabilize the Middle East?. Since then things have proceeded in that direction. The currency has done most of the work in terms of financial damage, while the government has ratcheded up tension with its neighbors, the EU, Russia and the USA.

Saudi Arabia is the latest country to join a growing list of countries with boycotts on Turkish exports. ZH: Spike In Boycotts Of Turkish Goods And Services

According to the Boycott-Turkey.org and Boycott-Turkey.net campaign (websites hijacked – this is a partial mirror site), “probably one of the most powerful weapons individuals have to effect political change is their consumer purchasing power.”

For years, Turkey has injected itself, often militarily, into the sovereign affairs of Iraq, Syria, Lebanon, Libya, Greece, Cyprus, India, and now, Armenia and Artsakh. On October 2, reports emerged that Turkey is using NATO and American facilities to attack Armenia and Artsakh. Since NATO is unable or unwilling to rein in this rogue nation that many consider to be the single greatest threat to global security, public boycotts are increasingly gaining favor.

Against the backdrop of war, public disapproval for Turkish-made goods has intensified in Armenia again. Armenians recognize that Turkey’s involvement in this war will allow it to complete the Armenian Genocide.

The Republic of Armenia announced on October 1 that its supermarkets will no longer carry Turkish products. Merchants and importers are choosing other trade partners. Since the renewed attacks on Armenia, communities in the Armenian Diaspora have also seen a resurgence in Turkish products and services boycotts.

...At the end of September, Saudi Arabia announced a ban on all Turkish goods. The Saudi Kingdom has been at loggerheads with Turkey over the contested murder of exiled Saudi journalist Jamal Khashoggi and the status of the Qatar peninsula.

According to the Turkish newspaper Dunya, the Saudi government has ordered individual businesses not to trade with Turkish companies or buy any products made in Turkey, and has imposed fines on companies that do not comply.

A Turkish boycott campaign in also in effect in Egypt. In January of this year, MP Ismail Nasr El-Din called on the government to impose a boycott of Turkish products, services and tourism “in response to the blatant transgressions by the Turkish government in the region, and its attempts to plunder the wealth of the Middle East, spread chaos, and destabilize the Middle East.” MP Omar Sumaida, head of the Congress Party, said “we launched a campaign to boycott Turkish products, and our party has developed plans to educate citizens to boycott Turkish products in all offices affiliated with the party across the country.” As early as 2013, a number of Egyptian TV channels stopped airing Turkish soap operas and dramas, to protest Turkish intervention in the Middle East.

These popular boycotts intensify the existing Arab League boycott. Many Arab countries cannot afford the high cost of retaliating militarily to Turkey’s incursion into northern Syria, and so are opting for economic sanctions as defense. “An Arab boycott of Turkish products would significantly hurt Ankara’s economy. Turkish exports to the Arab world total more than $30 billion annually, representing 18.3% of its overall exports, according to the trade data website, Trade Map.

There are layers to geopolitics that prevent cooperation between countries with similar interests, but sometimes interests align when everyone decides that a given regime's time is up. I don't know if that is the case with Turkey, but clearly it is boxing itself into an ever smaller geopolitical corner. I do not think a war is coming, but it is possible that various nations make these boycotts a semi-permanent policy. Anti-Turkish interests in the European Union and the United States, including the Armenian diaspora, will ramp up their activities. If these find footing, anti-Erdogan propaganda will increase from parties who favor Turkey.

Turkey sits at a nexus between Russia, the West and Islam. This is an asset when regional powers and neigboring countries aren't aligned because any nation desiring stability will avoid upsetting the balance. When all your neighbors and the great powers are on a similar page however...that's when semi-permanent economic boycotts can turn a nation into a pariah state.

There is no resistance for USDTRY. TUR is off its $17.60 low, but the chart still looks bearish here. How do you solve a problem like Erdogan? His regime has managed the currency poorly. Outside interests don't need to push the Turkish lira over the edge, it's already falling. Enemies don't need to apply pressure, at this point they only need not offer support when the time comes.