Turkey's economic hardships last as US sanctions likely to ease

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The United States is considering easing sanctions imposed on Turkey after the release of an American pastor at the center of a crisis between the two NATO partners, but experts believe that it is unlikely that the Turkish economy will recover soon.

"The release of pastor Andrew Brunson had certainly a positive effect on the Turkish currency as it was a considerable hurdle in bilateral ties ... but the Turkish economy has structural problems to be addressed such as high inflation," Enver Erkan, economist and GSM securities expert told Xinhua.

U.S. Secretary of State Mike Pompeo said that Washington may lift sanctions imposed on Turkey during the bitter dispute over its detention of Brunson.

Pompeo's remarks came last week after his talks with Turkish President Recep Tayyip Erdogan in Ankara on an unscheduled trip linked to the probe into the killing of Saudi Arabian journalist Jamal Khashoggi inside the Saudi consulate in Istanbul, a dramatic and unprecedented case that has prompted Turkish-U.S. cooperation.

"We'll have a decision on that shortly but some of the sanctions that were put in place were directly connected to pastor Brunson and there's a logic now to remove those as well," Pompeo told reporters in his plane.

In Ankara, Turkish Foreign Minister Mevlut Cavusoglu, who also met Pompeo, declared that such U.S. measures were "nonsense. "

"We agree that in our relations, there should be no sanctions like this and other issues," Cavusoglu said. "As long as there are sanctions, relations can go nowhere."

On Monday, Turkish presidential spokesman Ibrahim Kalin told reporters that "Turkey expects that these sanctions be lifted as soon as possible in order to restore our dialogue and partnership with the U.S."

U.S. President Donald Trump's administration imposed sanctions targeting Turkish Justice Minister Abdulhamit Gul and Interior Minister Suleyman Soylu in response to Turkey's arrest and prosecution of Brunson on terror charges.

After two years of detention, Brunson was sentenced on Oct. 12 by a court to jail for three years and 45 days over terror charges, but was then set free due to the time he had served.

Erkan said that the sanctions imposed on Turkish ministers are essentially "diplomatic" and their possible lifting would not have an impact on the vulnerable economy, which is showing symptoms of some recovery after the August currency meltdown.

"The other sanctions concerning U.S. steel and aluminum tariffs are part of a comprehensive protectionist scheme which affect other nations as well. So they are unlikely to be lifted," Erkan predicted.

Trump hailed the release of the U.S. national, which has been seen by observers as an opening for Ankara and Washington to restore a deteriorated partnership amid a war of words between two strong leaderships.

Erdogan has blamed the crisis on an "attack" emanating from the U.S. He said that the U.S. is waging an "economic war" against his country, announcing a boycott on U.S. electronics and hiking tariffs on U.S. goods in response.

Erdogan and Trump spoke on the phone on Sunday evening to discuss the release of the American pastor and the Khashoggi case, which is a clear sign that much-needed dialogue has resumed at the highest level between the two countries.

However, there are other serious and sore points in the U.S.-Turkish partnership such as differences on the Syrian war and Washington's refusal to extradite a Turkish cleric seen by Ankara as the mastermind of the failed coup in 2016.

"The elimination of the Brunson case or some positive developments in this regard may not erase all the hitches we are experiencing in Turkish-U.S. relations," Ilnur Cevik, top adviser to Erdogan, said in an article in the Daily Sabah newspaper, echoing the general mood in Ankara circles.

"We think that we can now further our bilateral dialogue in a more logical approach and negotiate on outstanding issues," an unnamed Turkish official told Xinhua.

The introduction of the sanctions in August prompted a currency crisis.

The Turkish lira has declined around 40 percent this year. But observers underline signs of recovery as the lira gained more than 10 percent against the greenback in recent weeks, with a more hands-on approach against a skyrocketing 25 percent inflation and rising unemployment.

Brunson's release has helped push the lira to its firmest in two months.

The currency stood at 5.67 against the U.S. dollar on Monday, a big gain compared to its lowest point of 7.27 in late August which caused panic shockwaves in Turkey as well as other emerging markets and Europe, Turkey's biggest trading partner.

"Turkey has to go forward with structural reforms that would make it sustainable and shock resilient. In this regard, 2019 will be a crucial year," Erkan said, insisting that despite some recovery, the Turkish economy would need a long way to go until it gets a clean bill of health. 


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