Since the imprisonment of Istanbul Mayor Imamoglu, the stock markets and the Turkish currency have plummeted. But will tourism, one of Turkey’s most important industries, be affected?
The news of the arrest of Erdogan’s rival, Ekrem Imamoglu, caused huge losses in Turkish stock markets. The confidence of many investors in the country was apparently shaken. This led to the worst week for the stock market since the 2008 global financial crisis: the ISE 100 stock index temporarily lost more than 16 percent of its value. In response, the Turkish Capital Markets Regulatory Authority banned short selling and betting and speculation to prevent a further decline in prices.
At the same time, the central bank eased its share purchases to support falling stock prices. Although the index briefly rose by about two percent, it fell back into the red and hit its lowest level since November. Observers say the development could become a major problem for Erdogan. In recent years, Turkish investors have invested in the stock market to protect their assets from high inflation, which in March was around 39 percent.
WILL THERE BE ANY CONSEQUENCES FOR TOURISM?
One of the most important industries in Turkey is tourism. In this area, the uncertainty about the situation in Turkey could have the most noticeable impact. Dirk Schmücker, scientific director at the NIT (New Insights for Tourism) institute in Kiel, believes that the consequences could also be seen on Mediterranean beaches. However, “to what extent is unclear and should not be overestimated,” he told DW. “Regarding the current arrest, this is not the first time that the Turkish government has behaved differently from what we are used to from most European governments.”
Marco A. Gardini, a professor at the Faculty of Tourism Management at Kempten University of Applied Sciences, says the mayor’s arrest is of “high importance for international political and diplomatic circles.” But for many “tourists who have chosen Turkey as a destination, this event will have little impact, because today there are very few tourists who avoid Turkey as a travel destination because of Erdogan and his policies.
TURKISH LIRA ‘FALLS’, SHOCK AND TOURISM
Despite his defiant demeanor, the protests that erupted after the arrest of Istanbul Mayor Ekrem Imamoglu have hit President Recep Tayyip Erdogan at his nerve center: the economy. Stock markets and the Turkish currency have plunged, and now the question is whether the unrest will also hurt one of the country’s most important industries, tourism. The news of Imamoglu’s imprisonment caused heavy losses on Turkish capital markets. The confidence of many investors in the country was apparently shaken, resulting in the worst week for the stock market since the 2008 global financial crisis: the ISE 100 stock index temporarily lost more than 16 percent of its value.
Observers believe that this development could become a major problem for Erdogan. In recent years, Turkish investors have invested in the stock market to protect their assets from high inflation, which in March was around 39 percent. Experts say that the uncertainty created could significantly affect tourism. Dirk Schmücker, scientific director at the NIT (New Insights for Tourism) institute in Kiel, believes that the consequences could also be seen on Mediterranean beaches. However, “to what extent is unclear and should not be overestimated,” he stressed.
Nearly a quarter of a century ago, it was Erdogan himself, then the popular mayor of Istanbul, who was ousted from office and imprisoned on charges his supporters dismissed as politically motivated, before later returning to become the longest-serving leader in his country’s modern history. Now, however, he appears to be facing a political crisis that could be the most serious of his more than two-decade rule.
