Turkey hopes to stave off yet another financial crisis as protests erupt and political tensions boil over following the arrest of Istanbul mayor Ekrem Imamoglu.
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00:00Young people in Turkey are increasingly anxious about their future following the arrest of
00:07Istanbul Mayor Ekrem İmamoğlu over fraud and terror allegations, which sparked nationwide
00:12protests.
00:13İmamoğlu was basically the main opponent for becoming the president and beating Erdoğan,
00:21so they are very scared of him and we are here to defend him.
00:25I grew up with AKP since I was born and I'm bored of that, the inflation, the cost of
00:33living, everything is affecting us so badly, we need to change that.
00:38İmamoğlu's CHP party, Turkey's main opposition, responded by calling for a nationwide boycott
00:44targeting companies and media outlets perceived as pro-Erdoğan.
00:49The arrest also spooked financial markets, increasing volatility.
00:55The Istanbul Stock Exchange plunged nearly 7% on 19 March, the day of İmamoğlu's detention.
01:03Trading was briefly suspended and authorities imposed restrictions to halt panic selling,
01:09leading to a partial market recovery.
01:12Political risk plays a crucial role for investors when it comes to Turkey and for that reason
01:18it's not a surprise that there were these very quick and large reactions.
01:24The fire sales that we observed confirms what I'm saying, investors are always on the jump
01:31when it comes to investments in Turkey.
01:35This political shock added fresh uncertainty to an already fragile investment climate,
01:41a concern for Turkey's key trading partners, such as Germany.
01:46Germany remained Turkey's top export partner in 2023 by a wide margin, with Turkey's exports
01:53to Germany reaching over a whopping 21 billion dollars.
01:57Germany was followed by the United States and Iraq.
02:01Meanwhile, major German players are expanding their footprint in Turkey's economy.
02:07Companies like Deutsche Bank, Volkswagen, Siemens and BASF continue to invest across
02:12sectors.
02:15The natural reaction of foreign investors from Germany, of course, given these very
02:21straight statements of opposition leaders to boycott companies and so forth, of course
02:28is to be reluctant in investing in such a country.
02:32On the other hand, I don't think it's possible at the moment to predict whether these reactions
02:38will lead to a very strong decline in FDI.
02:42With markets rattled and protests growing, Turkey now stands at a crossroads as Imamoglu's
02:47arrest fuels unrest, economic fears and youth-led calls for change.