Seyyed Jalal Ebrahimi told the Strategic Council on Foreign Relations that fluctuations in the Turkish Lira have long confused Turkish traders and industrialists, and have particularly hampered their valuation against the dollar and the euro.

“This is happening at a time when economic turmoil and crises continue in world markets, and the indexes of world-famous stock exchanges continue to set new records in various fields.”

Referring to fluctuations in commodity and basic material prices and the resulting risks for economic decision makers, he added that “the consequences of the outbreak of the coronavirus, the closure of small businesses and the confusion of industry owners for the supply of raw materials have affected large businesses and prevented economy from reviving because the presence and movement in small sale sales and purchases create big economic waves.

Challenges of Lira against Euro and Dollar

This analyst of Turkey’s economic issues said in such a situation, Turkey owes the World Bank and has to pay its debt in dollars; Therefore, any fluctuation affects this amount of debt. In addition, Turkey makes most of its sales in the European common market in euros. In fact, it receives euros and makes payments in dollars.

Ebrahimi said “the issue of converting euro into dollar entails costs for the Turkish central bank and traders. Under these circumstances, if we take into account the lack of new orders in the textile and food industries and delays in payment of dues from European and other customers, the Turkish Lira and its value against the dollar will face a difficult situation in the future”.

Competition of China and Turkey over the Europe market

He described the cessation of orders during the corona and Turkey’s growing competition with China as important factors influencing the Turkish economy.

“France and the United Kingdom have placed Turkey on the red list of tourist destinations due to the prevalence of the corona virus, and in this context, Turkey has faced a 67 percent decrease in tourist arrivals, which has had several consequences in various areas. Putting these issues together has devalued the Lira”.

Referring to Turkey’s efforts to further penetrate the markets of European countries and the challenges facing it, Ebrahimi said “in recent years, China has taken over some of the Turkish markets in the region and has tried to create numerous and vast warehouses in Europe in order to expedite deliveries.

” Get to the need centers faster. With this measure, China sometimes delivers goods to Europe faster than Turkey! This has affected the Turkish economy, and we are witnessing these fluctuations in the Turkish economy. With this measure, China sometimes delivers goods to Europe faster than Turkey! This has affected the Turkish economy, and we are witnessing these fluctuations in the Turkish economy.”

He said Turkey has expanded during the past 18 years its network of rail, road, air and marine transport remarkably, adding that Turkey is in a special position economically, militarily, commercially or in general strategically and logistically in terms of its location between the three strategic continents of Asia, Africa and Europe.

He added that despite all the economic problems caused by the cessation of production in some areas due to the prevalence of the corona virus and high bank interest rates, Turkey is trying to establish itself as a center of exports to three continents of Asia, Europe and Africa.

“Although Turkey, during the 19 years of Erdogan and his party in power, has made progress in trade, especially in exports, bringing the total to 200 billion dollars, the presence of more than 70 foreign banks, mostly to help investors in the country would lead to an economic crisis if sanctioned”.

Referring to some regional and international policies of Turkey and their impact on the country’s economy, he described the recent tensions between Ankara and European countries in terms of domestic consumption and said “Recep Tayyip Erdogan verbally warned prominent ambassadors of Western countries to justify and cover Turkey’s economic situation, the fall of the Lira, rampant inflation, opposition parties’ pressure on Erdogan for early elections, Kurdish issues in eastern Turkey, the cost of deploying troops in Idlib, rising youth unemployment and dozens of social and political, and economic issues.”

Ebrahimi went on to point out the recent restrictive laws in the field of registering and buying and selling real estate for foreign nationals and its economic consequences.

“Generally, when a person invests in Turkey, he or she either seeks residency or wants to become a citizen through it; In this case, they must deposit more than half a million in the bank or have immovable property of this value. This law applies to all foreigners who have companies, land or property in Turkey, and there are currently 76,000 foreign companies in Turkey.

Ebrahimi said the 500,000 dollars must be deposited in a bank for three years, and for real estate, after three years, it can be sold to someone else.

“This restriction is intended for foreign nationals; For example, a large number of Chinese have set up companies and purchased properties, but when they wanted to sell the property, the Turks prevented it from being sold to a Chinese, declaring that the property has generated “citizenship privileges” and should not be sold until three years. Of course, after the announcement of these laws, the purchase of property has decreased, because several people cannot receive residence permit with the purchase of one property.”

Emphasizing the need to study, observe and advise on investing in Turkey and using official sources for any trade, Ebrahimi said “Turkey is an export-oriented country. It has a trade turnover of 200 billion dollars and only 11.5 percent of it is from tourism. Therefore, the application of these restrictions has not had a significant impact on the Turkish economy.