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WithoutReason @lemmy.world
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www.nytimes.com In Turkey, Erdogan Signals Shift to Conventional Economics

In his choices of top officials, and with a leap in interest rates, Mr. Erdogan aims to tame inflation and defuse a looming economic crisis.

Turkey’s central bank sharply raised interest rates on Thursday, the clearest sign yet that President Recep Tayyip Erdogan is shifting his country toward more orthodox economic policies in the hope of taming a painful cost-of-living crisis.

The spike in rates, to 15 percent from 8.5 percent, came less than a month after Mr. Erdogan, Turkey’s dominant politician for two decades, won a third presidential term despite a challenge from a newly unified opposition, high inflation that has left many Turks feeling poorer and catastrophic earthquakes in February that killed more than 50,000 people.

Members of Turkey’s opposition had feared that Mr. Erdogan would capitalize on his victory to crack down on his opponents and further consolidate power. But to date he has made no drastic moves and has largely stuck to his previous positions, including the use of Turkey’s membership in NATO to block Sweden from joining the alliance.

His largest shift has been in economic policy, an apparent effort to head off the threat of interlocking economic problems that economists say are largely of Mr. Erdogan’s making.

The official annual inflation rate rose above 80 percent last year and was at 39.5 percent last month, eroding the purchasing power of Turkish families and sending the nation’s currency, the lira, plunging to record lows. Outside groups have accused the government of manipulating the statistics, saying the actual inflation rate is twice as high.

In the run-up to last month’s election, Mr. Erdogan tapped the central bank’s foreign currency reserves to prevent the lira from falling further while unleashing billions of dollars of new spending to insulate voters from the immediate impact of high inflation. He increased the minimum wage, hiked civil servant salaries and changed regulations to allow millions of Turks to draw early government pensions.

Mr. Erdogan also insisted on repeatedly reducing interest rates, from 19 percent in 2021 to 8.5 percent this year, in defiance of orthodox economic theory and practice, which call for raising rates to control inflation.

Since his victory on May 28, Mr. Erdogan has not directly announced a change of course, but has made several moves that point to more conventional economic policies that, while aimed at taming inflation and reducing the threat of a currency crisis, could also throw the economy into a recession.

He reappointed Mehmet Simsek, a highly regarded former Merrill Lynch banker and minister in Mr. Erdogan’s government, as finance minister. To head the central bank, he named Hafize Gaye Erkan, a Princeton-educated economist and former executive at the now-defunct First Republic Bank. Ms. Erkan is the first woman in Turkey to hold the post.

In announcing the interest rate hike, the bank said that further increases would follow “in a timely and gradual manner until a significant improvement in the inflation outlook is achieved.”

Given the new appointments, many analysts had expected an even bolder rate hike, and the value of the lira continued to slide after the new rate was announced.

Mr. Erdogan has long promoted the unorthodox idea that lower rates lead to lower inflation, a theory that did not work out but that did deliver continuous economic growth.

It remains unclear whether Mr. Erdogan will continue to allow interest rates to rise if Turkey’s economy starts to slow.

Ben Hubbard is the Istanbul bureau chief. He has spent more than a dozen years in the Arab world, including Syria, Iraq, Lebanon, Saudi Arabia, Egypt and Yemen. He is the author of “MBS: The Rise to Power of Mohammed bin Salman.”

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Modi State Visit: Modi and Biden Meet in India to Strengthen India-U.S. Relations

www.nytimes.com Modi State Visit: Modi and Biden Meet to Strengthen India-U.S. Relations

In a rare unscripted response during a news conference, the Indian leader ducked a question about his government’s treatment of minorities, saying there was “no question of discrimination.”

Biden welcomes India’s prime minister despite concerns over human rights.

President Biden emphasized common ground with Prime Minister Narendra Modi of India on Thursday during a lavish state visit meant to bolster ties with the world’s most populous nation, while largely skirting points of friction over human rights and Russia’s war in Ukraine, at least in public.

After a pomp-filled, red-carpet arrival ceremony, Mr. Biden and Mr. Modi announced a range of initiatives to advance cooperation in technology, energy and military hardware but revealed no movement toward each other on the areas of disagreement that have strained the relationship in recent months, most especially Ukraine.

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Early stages of Ukrainian counteroffensive ‘not meeting expectations,’ Western officials tell CNN

www.cnn.com Early stages of Ukrainian counteroffensive 'not meeting expectations,' Western officials tell CNN | CNN Politics

In its early phases, Ukraine’s counteroffensive is having less success and Russian forces are showing more competence than western assessments expected, two western officials and a senior US military official tell CNN.

In its early phases, Ukraine’s counteroffensive is having less success and Russian forces are showing more competence than western assessments expected, two western officials and a senior US military official tell CNN.

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www.irishtimes.com Palestine is at risk of ‘full annexation’, UN commissioners warn

Report accuses Israel of ‘silencing civil society’ by outlawing human rights groups

Report accuses Israel of ‘silencing civil society’ by outlawing human rights groups

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UN chief says fossil fuels are "incompatible with human survival" as world breaks temperature records
  • It's a huge problem, there's so much more economic and political inertia behind fossil fuels than most people thought existed. Looks like the only way to really balance industry with rapid change is for governments to intervene and to incrementally make fossil fuels unprofitable and then to allow the market to adjust on its own.

    Problem is, that adjustment will take time - and we are quickly running out of time.

  • apnews.com Allies pledge billions for Ukraine rebuilding and seek big-business investment at London conference

    Ukraine’s allies have pledged several billion dollars in non-military aid to rebuild the country’s war-ravaged infrastructure, cut corruption and help pave its road to eventual membership in the European Union. Diplomats and political leaders at the Ukraine Recovery Conference in London urged privat...

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    www.techspot.com UN chief says fossil fuels are "incompatible with human survival" as world breaks temperature records

    United Nations Secretary-General António Guterres said that countries must phase out the burning of coal, oil, and gas. He added that the current policies would lead to...

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