Şerif Dilek

In 2018, the Turkish economy suffered one of the most severe financial speculations in its 38-year open economy era. Some have tried to explain the causes of the financial turbulence solely by linking it to the deterioration in the macroeconomic indicators, such as the inflation rate and current account deficit. However, this approach cannot help us to understand the fundamental causes of the financial turbulence. This paper argues that internal and external shocks ranging from the coup attempt in 2016 to geopolitical risks hindered the designing and implementation process of the second-generation reforms Turkey needed to escape from its middle-income trap. As the reform process slowed down and the severity of shocks increased; uncertainties over economic performance and policies mounted. This uncertain environment paved the way for financial turbulence by providing opportunities for speculators to mislead the markets in line with their own interests.

Turkey has suffered from interventions and enforcements against its elected governments, on the average, in every decade. Against this background, this study presents an assessment of the political economy of the foiled coup attempt on July 15, 2016 via the main theoretical approaches developed to explain the relations between economy and military coups. In this context, the study looks at the economic background of the pre-coup attempt period, crises scenarios serviced by international institutions and the goals of the perception management orchestrated by the western world for the attempted coup. In the same breath, the study presents in detail the FETÖ’s colossal economic power amounting to billions of dollars. The main conclusion is that the July 15 coup attempt was perpetrated to prevent an interruption in flow of financial resources into a murky network of business enterprises around a messianic cult.