Hi friends-- lots of people are asking me for thoughts on Turkey's currency troubles. Here are my thoughts:

Turkey is headed for a period of higher interest rates, lower growth and weaker currency.

Domestic political instability, which is mixing with international economic shifts to drive the fall the in lira, is going to stay at a high level. There is a political battle within the elite – corruption investigations are tool in this battle – and elections planned at every level of government over the next 18 months will ensure tensions stay high.

This will be reinforced by an economic slowdown. Higher rates will mean less consumer spending, hurting companies that focus on the domestic market, and will sap funding for big infrastructure projects. Erdogan needs these big infrastructure projects to keep his business supporters happy and dole out patronage.

The falling lira hurts private companies with foreign denominated debts--reducing their profits and forcing them to delay investments. Worst hit are companies in construction and energy intensive industries. Higher interest rates will depress domestic demand. Domestic focused manufacturers are going to get slammed but exporters can benefit--if they don't rely too much on foreign inputs (on average about 25% of inputs used to manufacture products in turkey are imported--generally raw materials, which Turkey lacks). Tourism will benefit from continuing weakness in the lira (accounting for about 4% of GDP). The current account deficit will remain a problem: Turkey imports nearly all of its fuel, which it pays for in dollars, making up 3/4 of its current account deficit.

Turkey needs long term growth at 5% to accommodate new entrants in workforce. Its not going to get near that any time soon. Unemployment is officially at about 10%, although its closer to 20% if you use more expansive definitions of the labor force.

Public debt is low-- 40% of GDP. However structural inefficiencies can cause things to get out of hand quickly. Tax collection is weak and government funding is dependent on consumption taxes, so an economic slowdown can sharply reduce government revenues. Private debt is higher. Total foreign debt in corporate sector is $260bn, mostly short term with $110bn maturing in next 12 months. Companies with foreign debt have seen a 30% rise in funding costs due to lira depreciation over the past months.

Long term I'm a big believer in Turkey. It has a growing consumer base, strategic location and most of all, great people. But its government has been extremely lucky in recent years: lurching from crisis to crisis, it has somehow always managed pull itself back from the brink at the last moment, sweep its problems under the carpet, and carry on. That playbook can't work forever.
 
 
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Today, the Pakistani Taliban shot Malala Yousafzai, a 14 year-old Pakistani girl, in the head and neck for championing the rights of girls' education. The Taliban had closed down her school in Swat during their takeover of that region. Malala became famous by writing an online dairy about her experiences and giving interviews to international reporters. She is reported to be in stable but critical condition.
One of the few aspects of the old left that died with communism worth mourning is internationalism. Once upon a time, leftist intellectuals proudly argued for the progress and rights of all people, regardless of nation, creed or location. Now, the cultural relativist left is too post-modern to call backwardness in other societies by its rightful name. 

The barbaric shooting of a girl for wanting to attend school, and for her classmates to be able to join her, is the result of the retrograde culture that forms the core of the “Islamic Republic” of Pakistan. Pakistani officials are condemning the attempted killing, which they did nothing to prevent. How about instead declaring the right, to be enforced by the military, of every Pakistani girl to learn how to read and write? Less than half can.

After the self-loathing prattle of the past few weeks about how the West causes Islamic violence with its films and imperialism, I’d like to hear the Muslim world worry about how the Taliban’s oppression of women might be affecting the Islam’s image on the “Western street”. Maybe Muhammad Morsi and the Egyptian faithful could give us a demonstration of where they stand?

Progress is a real concept. I’ve heard enough arguments about why Muslim women might prefer to be uneducated, why they might enjoy wearing cloth bags in searing heat, or why chopping off a clitoris is a cultural practice that deserves respect. Support the brave efforts of women to resist clerically-backed misogyny. Don’t use multiculturalism to negate our common humanity.

I wish Malala Yousafzai a speedy recovery. I hope her suffering is not in vain.
 
 
Many criticisms of the article I wrote on the film protests, which called for a response stressing freedom of speech, suffer from what I call the “secular liberal fallacy”. 

My fellow secular liberals regularly make two related mistakes. 

First, we often assume nobody really takes actions based on faith. Even though the people themselves said they protested the film because it was a blasphemy against their prophet, every liberal rushed to say that something else was behind the protests. Why? 

Because deep down, secular liberals are mostly unable to comprehend how anyone can really believe in faith. Nevertheless, millions of Muslims truly believe that God (Allah) controls their fates. They believe God is best understood through revelations made to his final representative, the Prophet Muhammad, a perfect man who is beyond criticism. These revelations are consolidated in a perfect book, the Quran (along with less reliable accounts, known as the hadith), which gives clear instructions to harshly punish those who oppose Islam and its prophet. Moreover, Muhammad has honor, and because Muhammad is dead and cannot protect his own honor from insult, others must do it for him. If you believe in these precepts, violent actions against those who bait a vengeful God and disgrace his prophet are both rational and justifiable.

After denying that faith could be chiefly responsible for acts of violence, we assert instead that these crimes are an outcome of foreign policy, social inequality, poor access to education, or another issue that grieves liberals. In other words, we unintentionally ventriloquize our own critiques of Western policy and social injustice.

Now let me anticipate the objections. 

First, many will say that violent groups like Ansar al-Shariah and other al-Qaeda types do not speak for Muslims. I sympathize with this—I can shamelessly say that some of the most wonderful people I’ve ever met are Muslims, and they wouldn’t hurt a fly. But who can adjudicate who “really” speaks for Islam and who doesn’t? 

The unfortunate fact is that fundamentalists offer a very plausible interpretation of the texts. This is not an issue wholly unique to Islam, but for reasons outside the scope of this article, the problem is more pronounced in Islam at this point in time. And those who contend that these fundamentalists are a minority in the Middle East need to explain why the law books of Pakistan, Saudi Arabia and Iran, just to name the most salient examples, punish blasphemy with lashes and executions. Or how Ayatollah Khomeini, at the time the spiritual leader of many of the world’s shia Muslims, was able to sentence Salman Rushdie, an Indian Muslim living in London, and his publishers, to death for the crime of writing and disseminating a (supposedly) blasphemous novel? 

Second, many will say that Ansar al-Sharia, Khomeini, etc are acting based on politics, not faith. I can’t prove that this is false, but neither could I prove that an obviously theological problem, the Sunni-Shia dispute, is not also political. The issue here is that religion and politics are impossible to distinguish unless forced apart. Faith is inherently political, since any large group willing to believe things without question can be readily organized and exploited by power-hungry cynics. This is why secularism—the enforced division of politics from faith, is essential. 

I hope this post addresses some of the arguments made against my previous post. In my next post, I will try offer further arguments as to why a continuous and robust defense of free speech is the correct response to the protests, rather than an even-handed condemnation of both the protesters and the film.

Update:

You'll notice that ironically I demonstrate the fallacy above myself (at least the part of dismissing faith) in my previous post. This is an incredibly complex issue, and my posts are part of attempts to figure it out myself. While I believe scripture has consequences, it is trumped by culture (and is itself the product of culture). Moreover, focusing on culture is productive because culture is far easier to change than scripture.
 
 
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Libyans protest the murder of American diplomats. A hopeful moment in the midst of a disheartening few days.
Cultures should be criticized. That's how they progress.

It was by criticizing Christianity that the West exited the dark ages. It was by criticizing monarchy and subjection that we got democracy and citizenship. It was by criticizing slavery and segregation that America got closer to fulfilling its founding ideals.

Now a lowbrow film mocking the Prophet Muhammad is not what I am trumpeting. I personally thought it was boring and stupid. I don’t know who was behind the film, and I probably wouldn’t agree with their politics. But I am interested in the predictable murder that follows films, burnings, cartoons, novels, or anything else that “offends” Muslims. I am interested in the culture that produces these actions, the calls for censorship and the conversation that must follow.

What is freedom of speech? It is nothing if not the right to express unpopular or offensive beliefs. Nobody will stop you from saying koala bears are cute. True freedom of speech means protecting the minority, even if what they say is distasteful—it does not include an escape clause for people who are “offended”.

I am, by the way, offended by the bottomless pit of anti-Jewish propaganda streaming online and broadcasted onto the television screens of many of these protesters. I am offended by people who tell me it was the US government that bombed the Twin Towers on 9/11. I am offended by educational programs teaching that women "take pleasure" in being followers. But it doesn’t really hurt me that much. Not enough for me to kill any diplomats or attack foreign restaurants. It's nothing like the real pain felt by the orphaned children, widowed wives and grieving relatives of Christopher Stevens, Sean Smith, Glen Doherty and Tyrone Woods, diplomats who gave their lives to improving relations between America and the Muslim world.

And I don’t think Islam is really what’s behind the angry, semi-literate mobs attacking Western embassies across North Africa and the Middle East at the moment. Instead, it’s the culture of honor that cohabits with Islam. There are many beautiful things about this culture that Westerners can learn from— including its hospitality, its loyalty, its generosity and the notion that a promise is real thing.

But honor also justifies the subjugation of women. It justifies murder as a way to remove shame and gain revenge against insult. And it is central to a culture that desperately needs reform, because it impedes democracy and freedom, both in matters of society and of the state. There can be no free government if politicians can’t criticize, satirize, and yes, offend each other, and if the media and citizenry cannot do the same.

There is no exception to be made for blasphemy, either. Until God deigns to take matters into his own hands, it will be regular mortals who decide his will for you and use it as a cover to gain power in the here and now.

The risk of accepting real freedom of speech is that some people will offend you. So grow a thicker skin. Learn to fight back with words. It beats the alternative of living in a world where you can be convicted for creating comedy, where insulting the president is crime and where innocent diplomats in Libya are murdered because a man in California made a tasteless film.

 
 
Der Spiegl dives into Syria's tortuous revolution-cum-civil war:

“The lurching family business is still keeping itself afloat, partly because no alternatives are in sight yet. The prominent civil rights activists who penned the "Damascus Declaration" in 2005 have a program, but no followers. The protest movement in the streets has followers, but no program that extends beyond deposing the regime.”

Definitely worth a full read.

Ibrahim Saif on the failure of government-backed social programs in the Middle East:

“(S)ocial spending is distinguished by low levels of competency, especially in healthcare and education -- the two sectors that capture the greatest share of social expenditure. These sectors are usually not subject to oversight and lack indicators to measure their operational efficiency. Most of the expenditures go to wages and salaries, rather than to areas such as research and development, which could help improve competency and reduce waste.

These sectors also are resistant to change. They are based on obsolete regulations and bureaucratic measures that are difficult to change. Because of the low average employee salary, they often do not attract the most competent candidates and offer employees too few incentives to increase their work efficiency and motivation.”

And a list of practical and actionable suggestions for U.S. foreign assistance reform in Afghanistan from Desaix Myers:

"•Lower the footprint: Building a team of individuals with field experience and enough time in-country to establish trust is more important than increasing numbers in-country. It’s better to focus on fewer people and fewer activities.

• Streamline coordination and oversight: We need to cut coordinating meetings and duplicative requests for information. More responsibility needs to be delegated to lower levels.

•Rein in expectations: State-building involves often-competing objectives. We want the Afghans to do more but we want less corruption. Building the institutions to contain corruption takes time, but we want the government to get credit for better schools and health now. Finding a balance requires patience. Going slower, with fewer but more knowledgeable people working on fewer projects and spending less money stretched over longer time makes sense — if we can develop strategic patience.

•Develop “expeditionary” civilians willing to be deployed to danger zones critical to national security for years not months. The military has an “AfPak Hands” program to develop a cadre of 750 officers with knowledge and expertise to work on the region’s problems for five to seven years. Civilian agencies could do something similar, creating a team based in Washington, traveling frequently to the field, living in-country for up to 24 months, working the problem for four to five years, and developing the area and language expertise needed to do the job."

 
 
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Allison Benedikt's stream-of-consciousness narrative of how she turned against the American Zionist movement is making ripples in the blogosphere.

It's essentially a story about a journey from naivete to cynicism (and back again?), but it's an interesting one, especially if you've grown up in a similar cultural milieu, or have an interest in American Zionism.

See Goldblog's response here (he's not terribly impressed), and Sullivan here (he is impressed). I'd give you money quotes, but to be honest, this type of writing doesn't lend itself to quoting.
 
 
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Strawberry cheesecake pancakes and ful, together at last
Longtime readers will remember when we highlighted Krispy Kreme’s expansion to Turkey a couple of years back. Now it’s the International House of Pancakes’ turn to take their uniquely American riff on breakfast eastward. From MSN Money:

“DineEquity, Inc. (NYSE: DIN), the world's largest full-service restaurant company, announced today that its wholly owned subsidiary, IHOP Franchise Company, LLC, has signed a multi-restaurant franchise agreement with an affiliated entity of Kuwait-based M.H. Alshaya Co., WLL, for the development of 40 new IHOP Restaurants in Kuwait, Saudi Arabia, Jordan, Lebanon, Qatar, the United Arab Emirates, Oman, Bahrain and Egypt.”

Despite claiming international cred, the new Middle East locations will be the chain’s first step outside of North America.  I for one can’t wait to see what a halal IHOP menu looks like.

Mohammed Alshaya, executive chairman of M.H. Alshaya Co., cheerily explained his decision to partner with DineEquity to bring mounded  pancakes and cheese-encased omelets to the Arab world: "Consumers in the Middle East consistently tell us that they want the great quality and value that IHOP represents and we are pleased to introduce this leading American dining brand here.”

Something tells me he’s never actually eaten at IHOP.
 
 
Sorry for the blogging break, folks. I've been battling a mountain of work and cripplingly slow internet at home (thanks, Comcast). I know that Jon has been rather busy with his day gig as well. Hopefully we'll both be back blogging substantive stuff here soon.

In the meantime, I've taken to Twitter to issue abbreviated political missives and share links, so follow me (@evantachovsky) if you're so inclined. 

Evan
 
 
“[T]he all-too-human mistake…was that of allowing ourselves to believe there is something morally redeeming in the quality of victimhood itself. There isn’t. The very opposite is likely to be the case: the victims of cruelty or injustice are not only no better than their tormentors; they are more often than not just waiting to change places with them.

[We] turn to victimhood as a way out of our own helplessness…But victimhood is not a quality; it is a condition. Invariably it is a condition that diminishes both the victims and us who have not been hurt, but who write, and who make mistakes when we are consumed with outrage or shame. The danger is that one tends to forget, in such a charged emotional climate, that in a region like the Middle East, victimhood is a condition that may very well have touched everybody, including the victimizers.”

Kanan Makiya, Republic of Fear, Introduction to the 1998 edition, p. XXIX
 
 
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KSM does bear a striking resemblance to Ron Jeremy...
How quickly we forget. Reflecting on the capture of bin Laden, I dug up an old Hitchens article on the capture Khalid Sheikh Muhammad. Although nobody seems to remember this, he was found in the garrison city that serves as the headquarters of the Pakistani military:

I remember laughing out loud, in what was admittedly a mirthless fashion, when Khalid Sheikh Muhammad, one of Osama Bin Laden's most heavy-duty deputies, was arrested in Rawalpindi, Pakistan. Straining to think of an apt comparison, I fail badly. But what if, say, the Unabomber had been found hiding out in the environs of West Point or Fort Bragg? Rawalpindi is to the Pakistani military elite what Sandhurst is to the British, or St Cyr used to be to the French. It's not some boiling slum: It's the manicured and well-patrolled suburb of the officer class, very handy for the capital city of Islamabad if you want to mount a coup…Who, seeking to evade capture, would find a safe house in such a citadel?

Yet, in the general relief at the arrest of this outstanding thug, that aspect of the matter drew insufficient attention. Many words of praise were uttered, in official American circles, for the exemplary cooperation displayed by our gallant Pakistani allies. But what else do these allies have to trade, except al-Qaida and Taliban suspects, in return for the enormous stipend they receive from the U.S. treasury? Could it be that, every now and then, a small trade is made in order to keep the larger trade going?

Plus ca change.
 
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