The economic crisis that swept Turkey culminated in May, when the Turkish lira lost about 20% of its value (reaching 4.25 against the dollar).
Egyptian, Arab and regional media are actively discussing the possible impact of the crisis on free trade agreements between Turkey and Arab countries, primarily Egypt.
Relations between Cairo and Ankara deteriorated in 2013 after the Egyptian Armed Forces ousted President Mohammed Mursi and his government, which was dominated by the Muslim Brotherhood movement. Turkish President Recep Tayyip Erdogan regarded the overthrow of Mursi as a military coup and granted political asylum to the Brotherhood leaders, whom the new Egyptian authorities have accused of preparing and financing the terrorist attacks.
The West is trying to destabilize the situation in the Balkans, Ankara is actively opposing this. This was announced by Turkish President Recep Erdogan at a press conference with Serbian leader Alexander Vučić.
On May 26, the famous Egyptian journalist Dandravi Al-Hawari warned of the intention of the Muslim Brotherhood leaders who had fled to Turkey to protect the Turkish economy and thus help Erdogan in the upcoming presidential election.
According to this plan, they allegedly want to flood the Egyptian market with Turkish goods through the importing companies that they own in Egypt, which will create a surplus of dollars and lower the rate of the Turkish lira. Hawari is confident that massive Turkish imports to Egypt will harm the Egyptian economy.
On May 29, a member of the Egyptian parliamentary committee, Maysa Atwa, along with other deputies, sent a request to the Ministry of Finance for information on steps to prevent flooding of the Egyptian market with cheap Turkish goods.
“The devaluation of the Turkish lira is associated with a decrease in dollar liquidity in the Turkish market,” Atva said to the information portal Al Monitor. — Leaders and members of the Muslim Brotherhood have repeatedly talked about the Turkish crisis in their blogs and about the desire to do everything to help Turkey get more dollar liquidity from Arab countries, primarily from Egypt, filling up Arab markets with Turkish goods. This, of course, is extremely dangerous for the economy of Egypt. »
In her view of the government, Abdel Fattah al-Sisi should take urgent measures to disrupt this plan. High anti-dumping duties on Turkish products should be combined with tightening state control over the market.
“Turkey’s supporters in Egypt can import Turkish goods that the Egyptian market does not need in order to suck dollars from Egypt and other Arab countries and pour them into Turkey,” Atva concludes.
The Egyptian Union of Industrialists called on May 27 to increase the quality requirements for Turkish products coming to Egypt.
“The weakening of the national currency, as in the case of Turkey, accelerates inflation and raises commodity prices for most sectors of the economy,” said Muhammad Bodi, deputy chairman of the union. — Therefore, Turkey is forced to reduce the quality of its products in order to maintain price stability. In addition, a huge amount of Turkish goods at lower prices than Egyptian ones can inflict a heavy blow on Egyptian industry, even if competing Egyptian goods are of higher quality. »
According to the head of the Egyptian Center for Economic Research, Omar Muhann, calls for the introduction of import duties and tightening requirements for the quality of Turkish imports violate the free trade agreement between Egypt and Turkey. Any fees may be introduced only for a limited period. We should not forget that Turkey did not impose such duties on Egyptian goods when the value of the Egyptian pound fell sharply against the dollar in 2015 and 2016.
The dynamics of the Turkish Lira
“The introduction of anti-dumping duties on Turkish goods will allow Egyptian producers to monopolize the market and set higher prices,” said Bahjat Hassan, representative of the General Federation of Egyptian Chambers of Commerce. — It will harm consumers. Something similar happened when the Egyptian government introduced anti-dumping duties on the import of iron and steel from Turkey in December 2017. »
Despite safety precautions, an analyst at the Center for Political and Strategic Studies, Yusri Al-Azbawi, does not expect Egypt to take advantage of the Turkish economic crisis to take revenge on Erdogan’s regime:
“The Egyptian government does not mix economic interests and political differences in relations with Turkey. This is evidenced by the recent meeting of the Minister of Trade and Industry of Egypt Tarek Kabil with Turkish investors, as well as Cairo’s repeated calls to increase Turkish investment in Egypt. «
