Turk­ish lira col­lapses af­ter Trump dou­bles trade tar­iffs. Joko Wi­dodo names run­ning mate. Youth protests in Bangladesh.

The Saturday Paper - - The Week Contents - Hamish McDon­ald

It was no doubt just a sop to the evan­gel­i­cal right sup­port­ers who, de­spite ev­ery­thing, some­how stay loyal, but Don­ald Trump’s lat­est shot against a US ally, in this case Turkey, has re­ver­ber­ated around the world.

Af­ter a Turk­ish court ex­tended the de­ten­tion of an Amer­i­can protes­tant pas­tor ac­cused of spy­ing for both Kur­dish sep­a­ratists and the ex­iled Turk­ish re­formist imam Fethul­lah Gülen – the two bug­bears of Pres­i­dent Re­cep Tayyip Er­doğan – Trump an­nounced he was dou­bling tar­iffs on im­ports of Turk­ish steel. He also blocked de­liv­er­ies of the new F-35 fighter jets to Turkey’s air force.

Turk­ish steel sales to the US are not a big deal to ei­ther coun­try, he might have cal­cu­lated. But as it turned out, the move kicked the last blocks of sup­port from un­der Turkey’s econ­omy. Its cur­rency, the lira, went into freefall. Given that Turk­ish com­pa­nies have been lib­er­ally bor­row­ing in for­eign cur­ren­cies, this threat­ens a wave of bank­rupt­cies.

It was made worse by Er­doğan still not ap­pear­ing to un­der­stand eco­nom­ics and pop­u­lar psy­chol­ogy. He con­tin­ues to re­sist mea­sures longurged by knowl­edge­able ad­vis­ers: a big (5 per­cent­age point) jump in in­ter­est rates, bud­get cuts and re­ver­sal of po­lit­i­cal ap­point­ments at the top of the bu­reau­cracy. Sack­ing his son-in-law, Berat Al­bayrak, as fi­nance min­is­ter would also help.

In­stead, he talks wildly of con­spir­a­cies, prom­ises an ac­tion plan to beat Trump, and ap­peals to ci­ti­zens to bring out any for­eign cur­rency or gold they may have un­der the mat­tress and con­vert it to lira – ad­vice most are smart enough to re­ject. Al­bayrak’s mea­sures con­sist of an im­port ban on US­made elec­tron­ics, which not many Turks will be able to af­ford any­way for a while.

Un­in­tended con­se­quences ex­tended fur­ther to cur­rency falls in many other emerg­ing economies – South Africa, Mex­ico, Ar­gentina, Rus­sia, In­dia – and even Aus­tralia. Wor­ries emerged about banks in France, Italy and Spain with ex­po­sure to Turk­ish debt. It turned out that Turk­ish fac­to­ries sup­ply a num­ber of key com­po­nents for the F-35, and that Euro­pean tech­ni­cal sup­port for the air­craft is at a Turk­ish air base.

The Turk­ish au­to­crat’s vul­ner­a­bil­ity also looked like an in­vi­ta­tion for Rus­sia and China to move in and de­tach a strate­gic ally from the North At­lantic al­liance. Rus­sian for­eign min­is­ter Sergei Lavrov was in Ankara, amid talk of some new trade set­tle­ment ar­range­ment with Turkey in­volv­ing oil-rich Rus­sia and Iran, avoid­ing use of the US dol­lar. Both of these other pow­ers are them­selves reel­ing un­der new US sanc­tions.

Jokowi courts Is­lam

Bring­ing a po­ten­tial en­emy into your tent is an old and some­times wise po­lit­i­cal strat­egy, but the In­done­sian pres­i­dent’s choice of a run­ning mate for next April’s elec­tion is caus­ing much ner­vous­ness.

Joko Wi­dodo, pop­u­larly known as Jokowi, sprung a sur­prise by an­nounc­ing a 75-year-old Mus­lim cleric, Ma’ruf Amin, as can­di­date for vice-pres­i­dent on his team. “I think we com­ple­ment each other – na­tion­al­ists and reli­gious,” Jokowi said.

Amin heads the In­done­sian Ulema Coun­cil, a state-recog­nised body of imams that pro­nounces on con­tentious is­sues about Is­lam. It gained promi­nence in the dis­ap­point­ing sec­ond term of the pre­vi­ous pres­i­dent, Susilo Bam­bang Yud­hoy­ono, who de­ferred to its rul­ings that many saw as lim­it­ing In­done­sia’s reli­gious tol­er­ance.

In Jokowi’s cur­rent term, the coun­cil has pro­moted the use of blas­phemy laws, most no­tably against the for­mer Jakarta gover­nor Ba­suki Tja­haja Pur­nama, a Chris­tian of Chi­nese de­scent known as Ahok, who got a two-year jail term over a ref­er­ence to the Ko­ran in a cam­paign speech.

The coun­cil’s fat­was range high and low. It has sup­ported the 18-month jail term de­manded for an eth­nic-Chi­nese Bud­dhist in North Su­ma­tra who was heard com­plain­ing about the loud­ness of an am­pli­fied call to prayer from a mosque near her house. The 19 peo­ple charged over the en­su­ing anti-Chi­nese riot face sen­tences of one to four months. Else­where, a tiny mys­ti­cal sect in Java is un­der coun­cil in­ves­ti­ga­tion for say­ing Muham­mad was a woman.

Jokowi’s think­ing is clear. In the 2014 elec­tion, whis­per­ing cam­paigns ac­cused him of Chi­nese an­ces­try, se­cret Chris­tian­ity, and even mem­ber­ship of the In­done­sian Com­mu­nist Party, wiped out by the army in the 1960s. As in­her­i­tor of the Sukarno man­tle of in­clu­sive na­tion­al­ism through his mem­ber­ship of the In­done­sian Demo­cratic Party of Strug­gle, led by Sukarno’s daugh­ter Me­gawati, he is try­ing to in­oc­u­late him­self against Is­lamist at­tack.

His main ri­val next year will be the loser of 2014, the for­mer spe­cial forces gen­eral Prabowo Su­bianto, who also runs a sec­u­lar-na­tion­al­ist party, Gerindra, with a Mus­solini style of lead­er­ship. He, too, is hav­ing to deftly man­age the Is­lamists in his camp. Their grass­roots sup­port could be cru­cial, but the prob­lem is Gerindra doesn’t have the vast amounts of cash needed for an elec­tion cam­paign. Prabowo’s rich younger brother, Hashim Djo­jo­hadikusumo, may not be will­ing to stump up much money this time, with Jokowi still highly pop­u­lar.

Prabowo has com­pro­mised by choos­ing Forbes-listed ty­coon San­di­aga Uno, 49, as run­ning mate. San­di­aga, who has an Amer­i­can MBA and built his huge for­tune in al­liance with the eth­nic-Chi­nese fam­ily be­hind the big As­tra group, joined the Is­lamists run­ning against Ahok and got elected vice-gover­nor of Jakarta, a post he now says he’s re­sign­ing for big­ger things.

Al­most im­me­di­ately, an aide to for­mer pres­i­dent Yud­hoy­ono, who’d hoped to place his son as run­ning mate, said big money was in­volved: specif­i­cally, that San­di­aga had put up 500 bil­lion ru­piah ($A47 mil­lion) for Prabowo to buy the ac­qui­es­cence of two Is­lamist par­ties in his coali­tion. De­nials have been made.

Begum bat­tle

The pol­i­tics of Bangladesh for decades have been a puz­zling clash be­tween the “bat­tling be­gums” of Sheikh Hasina and Khaleda Zia nurs­ing the mar­tyr lega­cies of fa­ther and hus­band, re­spec­tively, who were mur­dered in army re­bel­lions.

But some­thing is dif­fer­ent in the wave of youth protest that’s gripped Bangladesh since an in­ci­dent that seemed to have no po­lit­i­cal con­text: the death of two stu­dents hit by a speed­ing bus in crowded Dhaka three weeks ago. It grew into a de­mand for jobs by the ed­u­cated young. With the econ­omy grow­ing strongly (7.65 per cent in the year to June), thanks to thriv­ing gar­ment sweat­shops and re­mit­tances from the 10 mil­lion in the Bangladeshi diaspora, cur­rent prime min­is­ter Hasina faces tough ques­tions about the eq­uity of growth as elec­tions ap­proach in De­cem­ber.

Her Awami League may be count­ing on an­other shoe-in, with the op­po­si­tion Bangladesh Na­tion­al­ist Party likely to re­peat its 2014 elec­tion boy­cott af­ter its leader Khaleda was sen­tenced to five years for cor­rup­tion in Fe­bru­ary this year. But wide­spread youth protest, in the tra­di­tion of those that broke the ties with Pakistan, could be some­thing else. This coun­try of 166 mil­lion, half aged un­der 25, could be head­ing for a kind of rev­o­lu­tion.

Trump feeds hogs

Trump’s week in­cluded base tweets and le­gal moves against a black fe­male for­mer White House staffer who is giv­ing her ac­count of in­ter­nal go­ings-on, the cre­ation of a US Space Force, and strip­ping the crit­i­cal ex-CIA direc­tor John Bren­nan of his se­cu­rity clear­ance.

Most bizarrely, Trump is­sued a call for Amer­i­can bik­ers to boy­cott Har­leyDavid­son. Hit by tar­iff re­tal­i­a­tion from the EU over US tar­iffs on steel and alu­minium im­ports, the com­pany is in­vest­ing in over­seas pro­duc­tion and con­sol­i­dat­ing its US fac­to­ries. It says a new fac­tory in Thai­land, an­nounced af­ter Trump pulled out of the Trans-Pa­cific Part­ner­ship pact in 2017, is now cru­cial to staying cost-com­pet­i­tive.

The pres­i­den­tial tweets have come fast and fu­ri­ous: “I’ve done so much for you, and then this. Other com­pa­nies are com­ing back where they be­long! We won’t for­get, and nei­ther will your cus­tomers or your now very HAPPY com­peti­tors!” … “Many @har­leydavid­son own­ers plan to boy­cott the com­pany if man­u­fac­tur­ing moves over­seas. Great! Most other com­pa­nies are com­ing in our direc­tion, in­clud­ing Har­ley com­peti­tors. A re­ally bad move!”

Does the pres­i­dent ex­pect al­lAmer­i­can Har­ley en­thu­si­asts to switch to

• Ja­pa­nese and Ger­man mo­tor­bikes?

Turk­ish busi­ness­men bring US dol­lars to a cur­rency ex­change in Ankara this week af­ter Pres­i­dent Re­cep Tayyip Er­doğan called for them to sell sav­ings to sup­port the lira.

HAMISH McDON­ALD is The Satur­day Paper’s world edi­tor.

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