Swimming against the currency: Turkey

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Hello, and welcome to the Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. As if dating wasn't hard enough, try it during a pandemic. Like everything else, it's gone virtual. Of course, for many, the early stages of dating already were. But it seems some would be lovebirds in lockdown are forging deeper, more emotionally intimate links. And plenty of work has gone into finding out how the coronavirus made the jump from animals into humans. But what if humans are just the next link in the chain? Our primate cousins could well be at risk from the same kind of leap. But first, Like other countries, Turkey's economy has been badly hit by the coronavirus pandemic. So to boost growth, the country's central bankers have pursued a familiar strategy, cutting interest rates. A ninth consecutive cut is expected later today. That will please President Recep Tayyip Erdogan, who once called interest rates the mother of all evil. But it'll also put additional pressure on the country's currency. Earlier this month, the lira fell to its lowest level ever against the dollar. With Turkey bracing for its second recession.

In two years, the fear is that.

Misguided monetary policy could make a fragile situation worse.

The lira has at this point lost just over 12% of its value against the dollar so far this year.

Piotr Zelebski is the Economist's Turkey correspondent.

And that is the most among big commodity importing emerging markets.

And so why is the lira having.

Such a hard time right now?

Well, one reason is that the Turkish economy was long considered to be vulnerable to external shocks and the pandemic. And the external fallout from that pandemic has been for the lira and for the Turkish economy, really the mother of all external shocks. Turkish banks carry a lot of debt. Turkish corporates especially are saddled with tens of billion dollars of dollar denominated debt. That means that any drop in the value of the lira has a negative impact on their books. And frankly, there is consensus among foreign investors that the monetary policy that the government and the central bank have pursued is quite misguided.

Well, what do you mean by that? What's wrong with the monetary policy as it stands?

Well, the problem with the monetary policy is that it is not independent of growth policy, just like the central bank itself is increasingly an arm of the Erdogan government. President Erdogan seems convinced that it is higher interest rates that cause inflation, not the other way around, which is something like defying the theory of gravity. And the bank itself has been on the receiving end of a number of attacks by the when the bank refused to cut interest rates last year, the central bank governor was fired. And it was with a view to reviving growth that the new central bank governor has cut rates repeatedly to a point where real interest rates are now in negative territory. That is not a recipe for currency stability.

What else can the central bank do then?

Well, to prop up the currency and could keep on doing what it has been doing for the past couple of years, and that is burning through its dollar reserves, which is to say flooding the market with dollars. That has helped stem the bleeding at times. And we've seen evidence of that over the past couple of months. When the lira was nearing a psychological barrier of seven to the dollar, the bank and the state banks intervened by selling dollars and that kept the lira below 7. But all this has come at a cost of the bank's foreign reserves, which are now badly depleted. And there is some speculation that net reserves are in negative territory and that makes the currency that much more vulnerable to speculative tax down the line.

And so what's to be done then about those depleted reserves if this whole process hinges on having high reserves?

Well, another strategy that the bank has taken is to look for support elsewhere, pursue currency swap agreements with partner countries. The bank has looked for agreements with the us, with the uk, with the bank of Japan, with Qatar, and also, I think, a few other G20 countries. And so far, these have come to naught, except for the case with Qatar. And just yesterday, the bank announced that it had expanded its existing $5 billion swap agreement with Qatar, the Qataris to 15 billion. That will, at least for the time being, provide an extra foreign currency buffer for the central bank. But it might not be enough to prop up the lira for much longer.

So if even that leaves things in a fragile situation, I mean, what other tools are there available to regulators?

Regulators, including the central bank and the Turkish Banking authority, have been resorting to ever more draconian measures to stop the bleeding. First, regulators have tightened limits on the amount of lira that local banks can provide to foreign banks, foreign financial institutions, which make it harder for foreigners to bet against the currency. That has effectively decreased the number of trades featuring Valera by foreign financial institutions. Recently, the same banking watchdog also imposed restrictions on the spread of misleading or wrong information in financial markets. Last year, similar rules led to the indictment of a couple of journalists, an economist and several others on charges of seeking to, quote, unquote, destabilize the economy through their writing and social media posts.

And what happens if things continue on their current path? What's at stake here?

Well, what's at stake is Turkey's economic stability. In the immediate future, Turkey may muddle through, and it has in the past through these unorthodox interventions in the market. But this does not bode well for currency stability in Turkey. And if we're to ask why that matters or why the Turkish economy matters, the answer to that is that Turkey's stability matters quite a bit for Europe. This is a country that is home to 4 million migrants and refugees. And any sign of a serious, serious economic crisis might force those refugees, if the government itself does not choose to do so, to again try to head to Europe. And we've seen the destabilizing impact on that, at least in Europe, over the past few years.

Piotr, thank you very much for joining.

Thanks for having me.

For a lot more analysis like this, subscribe to the economist. To get 12 issues for $12 or 12 pounds, just go to economist.com radioffer maintain a 2 meter distance. Wear a mask. Don't even think about holding hands. Okay? Courtship, apart from the cohabiting kind, was never going to be easy. Under lockdowns for singletons, the chances of meeting someone new might seem non existent. But the growth of dating apps and websites has paved the way for entirely virtual dating. Vodka bars are out and video calls are in. And for some, it's revealed what they really want from a rendezvous.

Before the pandemic, all you had to do to meet somebody was open your phone and start swiping right on the various matches suggested to you by a dating app.

Charlotte McCann is a staff writer at the Economist and the author of A Short History of Sexuality.

It was ever so easy to move from bar to bedroom. Sex was on tap. But then COVID 19 struck and shut off the mains.

And so that's to say that online dating as we knew it has come to a close.

Dating as we knew it has come to a close. People can't meet in the flesh anymore. Nevertheless, we find that lots of people are still looking for love and they're looking for it on the Internet. Some people are trying to transpose old formats online. In Nigeria, where dating apps aren't widely used, some people are hosting virtual games nights for singletons. In China, some people are dancing the night away at Internet discos and talking to each other in chat rooms. But there are still millions of people on dating apps and websites. About 240 million, in fact. And user numbers for the five most popular online dating services have actually held steady this year, which is kind of surprising if you think about it, because the way these apps are designed, they're meant to push users from their phones and into bars. But user numbers are holding steady, and people actually seem to be using their dating apps more intensely than they were before. COVID19 struck match actually reported an increase in the average number of messages sent daily across its products. And we also find that some people are embracing a totally new setup. They're turning on their web cameras and talking to each other through video. They're calling it the virtual date.

And so do we have a sense yet for whether or not that's serving the same purpose? Is the virtual date as, I don't know, successful as the in person one?

It's hard to know how successful it is compared to in person dating. We certainly see that video dating is on the rise. Bumble, a dating app, reported 84% increase in the number of video calls between the third and fourth weeks of March. And dating app users were surveyed by the Kinsey Institute at the University of Indiana. I spoke to one of the study authors, Justin Lee Miller, and he told me that users are more willing to have video chats.

Virtual dates definitely are happening. What we don't know yet is how satisfying people find those dates to be, and how many people are going to develop relationships as a result of them? And will those relationships potentially fare better if people have developed this kind of intimacy first before they've met in person?

He also said that user behavior has shifted in some interesting ways.

Many are reporting that their behaviors are different. So, for example, they're talking to people that they wouldn't normally talk to just because they want some kind of connection. Right?

So the people he surveyed were more likely to say they found other users to be friendlier than usual and more willing to have deep conversations than before.

So is there a chance here, at least for the people who are starting out during these lockdown times, that the nature of connections that people get on these dating apps is changing?

It seems that way. Before the pandemic, online daters often complained about how fickle the people they were meeting were. A lot of them failed to start talking with them, even if they had matched. And if they did start talking, they'd often just disappear without a trace. The ease with which users could make these connections, all you have to do right, is swipe right, Actually encouraged a lot of them to treat matches as if they were replaceable. What we're seeing is that lockdown has made users less flighty. Between late February and late March, the average length of a conversation on Tinder, which is one of the most popular apps, surged by a quarter. It seems that people are taking the time to get to know each other more.

So if the lockdowns have forced different behaviors, using these apps differently, is there some suggestion there that people didn't much care for the way things were going before?

Possibly. I mean, the shifts seem to reveal a desire for companionship, which would make sense considering what the experience of lockdown is like for a lot of people. You know, it's a lonely experience, but I think it also highlights the unease felt by some with the rush of romance. Before the pandemic, I spoke to a psychologist in Manhattan, Dr. Mehrab Gur, who says that before the pandemic, a lot of her millennial patients felt pressured to have casual sex.

Young people, you know, the hookup culture.

Is, you know, like, more anxious among them, actually shun dating altogether as a result of that pressure. She says that isolation has actually improved their emotional lives insofar as the people they're meeting now are actually a lot kinder and more responsive than they were before the pandemic.

And is there no indication that people are using dating apps in the way that they so recently did? That is, you know, meeting at first online, but then swiftly meeting in real life.

We have anecdotal evidence for this. One of Dr. Gurr's patients has started going on walks, socially distant walks, of course, with a woman he met on a dating app fairly recently. And as lockdowns lift all around the world, people are going to want to meet in person again. But a lot of people, I think, will be very cautious about coming into close contact with potential mates while COVID 19 lingers. And we also see that the virtual date has responded to some concerns that people had about dating even before the pandemic. Some women might not have wanted to have met a total stranger in person. And the video date allows them to get to know that individual, but without doing so in person. It also is an effective vetting mechanism. Instead of having to spend three weeks texting somebody, which doesn't paint a particularly accurate portrait of what that person is like, you can just turn on your webcam and spend an hour with them, almost as if it was in person. I think the virtual date actually might outlast the pandemic.

Charlie, thanks very much for joining us.

Thank you, Jason.

Although the exact origins of the coronavirus remain unclear, scientists believe that it first jumped between animals and onward to humans. Now there's reason to worry about a jump in the other direction. Some animals are also in danger of being infected by humans.

The great apes share about 98% of their DNA with human beings, which means that they're vulnerable to many of the same diseases that humans are.

Amy Hawkins is a writer at the Economist.

And so scientists are worried that great apes, such as chimpanzees and gorillas, could be at risk from the pandemic.

But sharing DNA, of course, isn't the whole story. I mean, what is it about grade 8 biology that makes them so potentially susceptible to COVID 19?

So the reason is that the virus that causes COVID 19 infects humans by locking onto the enzyme ACE2. This protein is found on the surface membranes of certain cells, particularly those of the airways, into the lungs. In humans, the ape version of ACE2 is identical to the human variety. So apes are highly likely to be susceptible to SARS COV2, which is the virus that causes COVID19.

And so is there any evidence, then, that apes are, in fact contracting COVID 19?

So far, there have been no reported cases of wild apes sickening with COVID 19. But laboratory monkeys, specifically rhesus macaques, have been infected already as part of vaccine trials. Lots of primatologists Are worried that this could have a devastating impact on ape species, Many of which are already endangered. So great apes such as gorillas, chimpanzees, bonobos and orangutans are all at risk.

And has that slightly overlapping biology been an issue in past epidemics and pandemics?

Yes, absolutely. So Ebola alone is responsible for the deaths of about one third of the world's wild gorillas over the past three decades. And human respiratory viruses are already the leading cause of death for chimpanzees At Gombe Stream national park in Tanzania and Kibale national park in Uganda. In 2013, an outbreak of rhinovirus C at Kibale killed 9% of one chimp community. And so a COVID 19 outbreak would be another problem that the apes don't need.

And is it expected that it would spread throughout populations in much the same way it does with humans that aren't distancing?

Yeah, exactly. So obviously apes can't be told to socially distance. So if one of them did contract the disease, it could spread rapidly. Some ape populations will cope with COVID 19 better than others. Chimpanzees live in multi male, multi female groups. So if the dominant male dies, other males will step in. But mountain gorilla groups are usually harems that have several females but only one male, the silverback. And if the silverback were to die of COVID then the females who are likely already infected would probably disperse to join other groups, and that would spread the virus further.

And so what's to be done, then? What can conservationists do to mitigate these risks?

Conservation efforts have protected the apes from lots of major threats, Such as habitat loss and poaching. But this is a Faustian bargain, as one primatologist I spoke to put it, because through conservation efforts, the apes are exposed to humans, and that increases the likelihood of them contracting a human virus like COVID 19. Many of the conservation sites are still at risk from the outside environment. So although most of them have closed down operations almost entirely in some countries, such as Tanzania, the country hasn't enforced a full lockdown. So villagers who live around the national parks could still spread the disease to chimps if an ape were to get COVID 19. Most primatologists think that isolating a sick ape would be unfeasible because of the ethical concerns and because of the impact it would have on the rest of the ape community. So one primatologist I spoke with said that if an ape did get sick, they wouldn't be able to do anything. They would just have to sit back and watch.

Thank you very much for joining us, Amy.

Thanks for having me.

For more on the latest research into COVID 19, listen to Babbage, our sister podcast on science and technology. This week's episode explores the ways coronavirus might manifest differently in children and the role kids play in spreading it. Search for Babbage wherever you get your podcasts. That's all from us on the Intelligence.

See you back here tomorrow.