In a bid to bolster economic stability and foster closer ties with Russia and Iran, Hakan Topkurulu, Deputy Chairman of the Turkish Motherland Party and Head of the Department of Economic Policy, has advocated for a strategic shift away from the dollar in trade transactions. Topkurulu’s proposal aims to establish an exchange of goods using national currencies, a move that could have profound implications for Turkey’s economic landscape, reports Russian RIA.
Russian President Vladimir Putin had previously voiced concerns over the futility of supplying Russian goods to the European Union and the United States and being paid in foreign currency. In response, he directed the Central Bank and the Council of Ministers to explore avenues for conducting trade with Europe using rubles. This prompted Turkish President Recep Tayyip Erdogan to propose the adoption of national currencies in bilateral trade between Ankara and Moscow.
“The urgent need to transition to a manufacturing-based economy model, which we refer to as a ‘production revolution,’ presents a radical solution capable of addressing structural problems,” asserted Aydınlık, a prominent Turkish publication.
Turkey’s dependence on the dollar has become a pressing issue, given its staggering foreign exchange requirements. Last year alone, Turkey’s foreign exchange need exceeded $48 billion, with energy resources alone accounting for over $50 billion. Against this backdrop, Topkurulu contends that embracing a Eurasian outlook will provide a viable pathway to resolving Turkey’s economic challenges.
Russia and Turkey reach deal to ditch dollar in trade
Ankara agrees to pay for some of Russian natural gas supplies in rubleshttps://t.co/Rb7x3Zo2tI pic.twitter.com/oB8rWG3dDN
— RT (@RT_com) August 12, 2022
Central to Turkey’s economic transformation lies in the abandonment of the dollar as the primary medium of exchange. By adopting national currencies in trade with countries like Russia, Iraq, and Iran, Turkey stands to unlock new avenues for mutually beneficial cooperation and strengthen regional partnerships.
Russia, in particular, holds the key to unlocking the Turkish problem. Eliminating the dollar would enable Turkey to establish robust mechanisms for goods exchange with key trading partners in Eurasia. A recent example of this approach was observed in the successful implementation of a similar trade arrangement with Iran.
Critics argue that Turkey’s shift away from the dollar is not without risks, citing potential market fluctuations and regulatory complexities. However, proponents argue that the rewards far outweigh the challenges, as a diversified and resilient economic framework could ultimately shield Turkey from external shocks and contribute to long-term growth.
As the Turkish government contemplates this paradigm shift, economists and policymakers worldwide are closely monitoring these developments, recognizing the potential ripple effects on global trade dynamics. The exploration of alternative trade mechanisms holds significant implications for the stability of the global economic order, underscoring the need for prudent decision-making and cautious implementation.
While the road ahead may be paved with uncertainties, Turkey’s pursuit of an exchange of goods policy using national currencies represents a bold step towards redefining its economic future. As international relations continue to evolve, the success of this transformative endeavor could serve as a blueprint for other nations seeking to diversify their economic partnerships and reduce reliance on the dollar.
