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From the Fed to Esenyurt: The Political Anatomy of Interest Rates

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Being an enemy of Donald Trump isn’t all that difficult. The media, immigrants, Greta Thunberg, even wind turbines have all landed on his blacklist. But there’s one figure Trump considers even more dangerous than Xi Jinping: Jerome Powell. Yes, the Chairman of the Fed — that is, the head of the world’s most powerful central bank. A figure who not only determines the course of the U.S. economy, but also shapes everything from interest rates to exchange rates, borrowing costs to capital flows in global markets. In Trump’s eyes, just another technocrat who does nothing but raise interest rates.

Trump’s anger at Powell reached its peak in the summer of 2025 and has turned into a full-on social media meltdown. On his own platform, Truth Social, Trump called Powell “a total and complete moron.” Then he branded him “very dumb,” “hard-headed,” and following a rate decision, simply “stupid.” Not stopping there, Trump went a step further and declared Powell “a major loser,” attacking not only his policy but his persona. In short, Powell has become the main political — and psychological — punching bag of Trump.

But what’s really behind this clash? And why does it concern not just Washington, but also Ankara, Gaziantep’s industrial zone, or a home loan in Esenyurt, Istanbul?

What Is the Fed, and What Is It Not?

The Federal Reserve — or the Fed, for short — is the central bank of the United States. Established in 1913, its mission is to ensure financial stability, manage monetary policy, supervise banks, and, of course, control inflation.

Its institutional structure is somewhat complex and quite different from Turkey’s central bank: The Fed consists of 12 regional reserve banks and a Board of Governors in Washington. The Chair (currently Jerome Powell) leads this board, and is appointed by the U.S. President, though Senate confirmation is required. The term is 4 years, renewable. Importantly, the Fed generates its own budget and does not receive direct funding from the U.S. Treasury — which grants it financial autonomy.

So, it’s not formally subordinate to the government, but it isn’t fully independent either, since its leadership is politically appointed. This makes it both a powerful and controversial institution.

But here’s the crux: the U.S. dollar is the global trading currency. About 60% of the world’s foreign exchange reserves are held in dollars, and roughly half of global trade is conducted in dollars. The prices of essential commodities like oil are also set in dollars. As such, the Fed’s interest rate decisions impact not just the U.S., but the entire world.

When the Fed raises rates, the dollar appreciates. This increases borrowing costs for developing countries and accelerates capital flight. In countries like Turkey, which carry large amounts of foreign debt, it leads to currency shocks, inflation, and upward pressure on domestic interest rates. In other words, a single sentence from Powell can raise the price of tea in a back alley teahouse in Istanbul.

Trump vs. Powell: The War on Interest Rates

In 2025, Trump is back in the Oval Office, and he sees economic management as part of his personal show. He wants to supercharge the economy. In his eyes, that depends on one thing: LOW INTEREST RATES.

Powell, however, points to the inflationary pressures of Trump’s tariffs and says, “Inflation expectations remain high; therefore, we must keep rates steady.” One wants to press the gas pedal, the other the brakes. For Trump, that’s unacceptable. To him, a central banker who raises rates is a “traitor to the economy.”

But Powell’s concern isn’t just Trump — it’s defending the Fed’s “independence.” This is where the ideological and theoretical stakes become clear.

Central Bank Independence: Myth or Reality?

Since the 1980s, central bank independence has become a cornerstone of neoliberal economic thought.

Its theoretical foundation lies in Kydland and Prescott’s “time inconsistency” problem and Barro-Gordon–style rational expectations models. Turkey’s post-2001 monetary regime also leaned heavily on this framework: inflation targeting combined with central bank independence was presented as a stabilizing, neoliberal cure-all.

The argument was that elected politicians would always be tempted to loosen monetary policy for short-term gain, so monetary decisions should be left to technocrats. Thus, the idea that central banks must be “independent” to ensure inflation control became an unquestionable dogma.

Supposedly, these technocrats would base their decisions on data, not political pressure. But a closer look reveals that these decisions often systematically benefit specific interest groups.

A Critical Perspective: Independence for Whom?

From a critical political economy viewpoint, central bank “independence” is often not about neutrality — it’s about institutionalizing class power.

What’s presented as “independence” is often a policy framework that’s closed to the demands of workers but wide open to the expectations of financial capital.

When central banks raise rates in the name of fighting inflation:

  • Investment contracts.
  • Unemployment rises.
  • Wage growth is suppressed.
  • Public spending is cut.

The winners? Bondholders, investors, and financial elites.
The losers? Workers, small producers, and the general population.

As we’ve seen in crises, these so-called “independent” institutions can conjure up unlimited liquidity to rescue markets — but when it comes to social spending, they call for austerity.

So the issue isn’t just independence. It’s: independent from whom, and working for whom?

What About Turkey?

In Turkey, central bank independence was legally recognized after the 2001 crisis via IMF-backed reforms. But in practice, this independence has always been contested — especially when it comes to interest rate policy and capital flows.

After 2018, with the shift to a presidential system, the central bank’s leadership was frequently changed under political pressure.

President Erdoğan’s claim that “interest causes inflation” turned monetary policy into a matter of presidential decree. The result? Rates were cut under pressure, inflation soared, and the Turkish lira suffered historic depreciation.

But the problem isn’t limited to the AKP era. Even in the so-called independent period of 2001–2015, Turkey relied heavily on high-interest, low-currency policies to attract short-term capital inflows. This model suppressed wage growth and limited public investment.

In short: regardless of the model, monetary policy in Turkey has often served financial markets more than the public interest.

Not Independence, Not Authoritarianism — But For Whom?

The Trump–Powell clash isn’t just a clash of egos. It reveals the core contradictions of 21st-century economic governance: Should monetary policy serve the public or financial markets? Should we prioritize inflation control or employment? Should we protect capital or people?

Trump’s authoritarian attacks on the Fed don’t mean democratization. Though he uses populist rhetoric, his economic policies — tax cuts, deregulation — overwhelmingly favour the wealthy.

But that doesn’t mean the current model of central bank “independence” defends the people either. The truth is: neither authoritarian interference nor technocratic detachment serves the public by default.

So, the question isn’t just “politics or technocracy?” It’s who is economic management for — and in whose name?

And that’s a question not just for the U.S., but for Turkey, as well.

Maybe the solution isn’t for central banks to be “independent,” but to be accountable to the people, not against them.

Because whoever controls monetary policy determines everything from bread prices to rent, from unemployment to debt. And believing that this enormous power is merely a “technical” matter — that’s the real naivety.

Opinion

India’s space sector: A launchpad for global partnerships

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Ambassador Gurjit Singh, former Indian Ambassador to Germany, Indonesia, Ethiopia, and the ASEAN and African Union missions

Growing competition in outer space provides India with a unique opportunity to shape a narrative in which collaboration, rather than confrontation, drives space exploration. Recognised as a trustworthy and cost-effective spacefaring nation, India is now well placed to transform its technological advances into enduring international partnerships that contribute to scientific progress, economic growth, and sustainable development.

India’s journey into space has been distinctive. Unlike many space programmes that emerged from Cold War rivalries, India’s programme was conceived as an instrument of national development. Dr. Vikram Sarabhai anchored India’s space vision in practical applications that would improve the lives of ordinary people. Under his leadership, satellites were developed to strengthen communications, weather forecasting, disaster management, healthcare, agriculture and education. This development-oriented philosophy remains central to India’s space programme and resonates strongly with the needs of countries in the Global South, which seek practical applications of space technology rather than prestige alone.

Today, India’s achievements extend  beyond developmental applications. The Chandrayaan missions, the Mars Orbiter Mission, the Aditya-L1 solar observatory, and the forthcoming Gaganyaan human spaceflight programme have established India as a nation capable of executing sophisticated and reliable space missions. Chandrayaan-3’s successful soft landing near the Moon’s south pole placed India among an exclusive group of space powers while demonstrating that world-class innovation can be achieved at comparatively modest cost.

India’s growing credibility comes at a time when the global space economy is expanding rapidly. Valued at over US$600 billion today and projected to approach US$1.8 trillion by 2035, the sector is increasingly driven by commercial activity in satellite communications, Earth observation, navigation, climate services, broadband connectivity, and emerging fields such as in-orbit servicing and lunar exploration. Many countries aspire to participate but lack indigenous capabilities. They seek dependable long-term partners rather than merely launch providers.

India possesses the capabilities to meet these requirements. The liberalisation of the space sector in 2020 transformed the ecosystem by opening it to private participation. The establishment of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), the expanding commercial role of NewSpace India Limited, and the growth of private enterprises have created one of the world’s most dynamic emerging space ecosystems. Indian startups are developing launch vehicles, satellite platforms, geospatial applications and propulsion technologies that are attracting global investment and customers. Companies such as Skyroot Aerospace, Pixxel and Agnikul Cosmos have demonstrated that Indian private enterprise can compete internationally in advanced space technologies.

The next step is to internationalise this ecosystem.

Rather than positioning itself only as a low-cost launch destination, India will offer comprehensive partnerships encompassing satellite design, launch services, mission operations, ground stations, astronaut training, capacity building and downstream applications in agriculture, disaster management and maritime security. Such integrated partnerships would be valuable for countries across the Global South and the Indo-Pacific seeking affordable, customised and reliable technologies to meet their development priorities.

India has demonstrated the diplomatic value of such cooperation. Through the South Asia Satellite, it provided communication and developmental benefits to neighbouring countries. Indian launch vehicles have successfully placed hundreds of foreign satellites into orbit for governments, universities and commercial operators around the world. India’s decision to join the Artemis Accords reflects its willingness to participate in the peaceful exploration of the Moon through international collaboration. Cooperation with  NASA, the European Space Agency and JAXA has strengthened India’s scientific and technological capabilities.

These partnerships reinforce India’s standing as a leading voice of the Global South. India offers development partnerships based on affordability, reliability and mutual respect rather than creating technological dependence. Space cooperation has therefore become an increasingly important instrument of Indian diplomacy, strengthening bilateral relationships while delivering tangible developmental benefits.

To realise its full potential, India will aim to sustain the momentum of reform. Faster regulatory approvals, greater access to venture capital, stronger intellectual property protection, and closer collaboration among research institutions, industry and academia will be essential. Public procurement policies would continue supporting Indian startups, enabling them to scale up, innovate and integrate into global supply chains.

India is positioned to play a larger role in shaping the governance of outer space. Orbital congestion, space debris, responsible resource utilisation and equitable access to emerging space opportunities are becoming pressing international concerns. As space activities expand, there will be an increasing need for countries capable of building consensus on responsible norms and practices. India’s long-standing commitment to the peaceful uses of outer space, combined with its growing technological capabilities, equips it to contribute meaningfully to the development of rules that promote transparency, sustainability and equitable access.

The coming decade will determine not only which countries lead in space but also how space is governed. With its scientific capabilities, entrepreneurial ecosystem and international credibility, India is uniquely placed to bridge the gap between established and emerging space nations. By building collaborative partnerships founded on inclusivity, mutual benefit and innovation, India can transform its space programme into a major pillar of its global engagement.

In an increasingly divided world, India’s space sector offers a powerful reminder that the greatest achievements in space are those that bring nations together. That may well become India’s most enduring contribution to humanity’s next frontier.

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Great powers and the fierce rivalry in Africa

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In tandem with the retreat of US imperialism and the erosion of its hegemonic capacity, the rivalry among the world’s great powers is intensifying across vast geographies and divergent fronts alike. From Africa to Central Asia, from electric vehicles to artificial intelligence, an acute contest is unfolding—most conspicuously between the United States and China.

History instructs us that wherever great power rivalry takes root, peace remains elusive. Stability cannot endure there. Wars, internal conflicts, coups d’état, and the mass migrations they inevitably trigger dominate the horizon. Nor do great powers desire the cultivation of participatory democracy, human rights, the rule of law, or class consciousness in these lands. Instead, they bolster dictatorships, authoritarian regimes, totalitarian systems, and repressive governance. The imperialist powers harbor no concern for the scarcity of water, drought, or famine in Africa. Their focus is solely fixed on exploitation, plunder, pillaging the resources of the nations upon which they descend, and capturing their domestic markets.

Africa holds singular importance in this context. It commands attention simultaneously by virtue of its sheer expanse, its demographic weight, and its subterranean wealth. In the rivalry across this ancient and impoverished continent, the United States and China lead the vanguard. Russia, too, makes notable maneuvers, though on a less extensive scale. Between the United States and China, the race is particularly fierce regarding the extraction, processing, and conveyance of subterranean resources to world markets.

Africa—endowed with abundant mineral wealth, a population approaching 1.5 billion, and critical strategic importance along global trade routes—whet the appetites of capitalist, advanced, industrialized, imperialist states as a vast, populous, and expanding market. Geopolitically as well, its position cannot be ignored. Africa’s wealth in rare earth elements, precious minerals such as diamonds and gold, and strategic minerals indispensable to advanced technologies—notably copper, cobalt, and lithium—is indisputable.

AFRICA CARRIES NO WEIGHT IN GLOBAL POLITICS

Unlike other continents such as Europe, Asia, or the Americas, Africa possesses no single country that commands prominence in global politics or the world economy. Nor does Africa host an alliance, international organization, or bloc of comparable global stature. In the Americas, there stands a superpower: the United States. In Asia, there are great powers: Russia and China, with India also ascending. In Europe, major, consequential powers endure: the United Kingdom, France, and Germany. Yet on the African continent, no such states exist. What exists in Africa is the rivalry of non-African great powers. Even the 55-member African Union, the institutional body of the continent’s nations, remains far from exerting any real influence—not only in global politics, but even across the African continent itself.

Over the past fifteen to twenty years, Africa has undergone substantial upheavals. Armed conflicts, civil wars, and violence have become pervasive. From Ethiopia to Somalia, Libya to Sudan, armed hostilities have claimed countless lives, destabilized governments, and provoked massive waves of displacement. Terrorist organizations have seized upon these conditions as an opportune opening, and the great powers, in turn, have instrumentalized these terror networks.

In Africa, former nineteenth- and twentieth-century colonial powers such as Britain and France indulge in reveries of bygone eras. They attempt to assert themselves, yet their efforts prove futile. Germany, as Europe’s leading economic, industrial, and technological powerhouse, takes a keen interest in Africa; yet despite this attention, its institutional knowledge and historical experience regarding the continent pale in comparison to those of the British and French. Italy strives to act, but lacks the requisite capacity. The Netherlands and Belgium, once deeply entrenched in Africa, are far removed from their imperial past. Spain and Portugal assert no claim to global primacy. All of these nations languish, to borrow Ahmet Hamdi Tanpınar’s phrase, in “a vague longing for a bygone past.”

China, well aware of Africa’s significance, is investing heavily across the continent. It stands as Africa’s largest trading partner and the primary destination for the continent’s exports. In the provision of loans, credit facilities, and grants to African states, it has outpaced Western institutions. China’s investment and foreign aid capacity, economic leverage, and extensive commercial ties naturally consolidate its political and diplomatic influence across Africa, elevating its visibility and prestige. Under the auspices of the Belt and Road Initiative, Beijing continues to finance large-scale infrastructure investments as well as major communications and transport projects.

THE FEROCITY AND DIMENSIONS OF THE RIVALRY

It is, of course, impossible for Russia to mount massive economic investments, conduct extensive aid operations, or sustain the volume of trade in Africa that China commands. Consequently, it seeks to distinguish itself by guaranteeing the security of local leaders, corporate enterprises, and ruling elites, relying predominantly on private military companies (the operations of the Wagner Group being a case in point). Russia has deployed mercenaries to Mali and the Central African Republic.

The United States, for its part, endeavors to counter China’s expanding influence, economic footprint, visibility, and public diplomacy initiatives in Africa, while simultaneously laboring to reinforce its own economic and political ties with African states. One need only recall that the United States, having intervened in Libya in 2011 through NATO, has directly struck ISIS targets in Somalia. The strategic depth of Washington’s relationship with Cairo is likewise well known.

The United States, China, and Russia also stand out prominently in arms sales to African nations. As the great power rivalry on the continent grows ever sharper, the spectrum of contestation widens accordingly. Cultural rivalry is superimposed upon economic, political, and military dimensions. Because every great power seeking to expand its sphere of influence and reach is determined to block the advance of its competitors, Africa serves both as the stage for and the witness to this unsparing contest. Some experts explain this rivalry through the lens of a new strain of colonialism; others account for it by pointing to the inherent nature, complexity, and multifaceted character of competition between imperialist metropoles.

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The women who refuse to be erased: On Japan’s surrender anniversary, the fight over wartime sexual slavery continues

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BUSAN, South Korea — On the day Japan marks the 81st anniversary of its surrender in World War Two, a conference room in Busan’s city council building has become the latest front in a battle over memory.

Allan Wilson, Journalist

Last month, on 23 July, academics, activists and lawmakers gathered here for a symposium on one of the war’s most painful legacies: the estimated tens of thousands of women — euphemistically labelled “comfort women” — forced into sexual slavery by the Imperial Japanese Army. The event was co-hosted by the Carter Human Rights Center’s Asia division and the Korean Women’s Forum.

“The records of the Japanese military’s comfort women are historical assets that the international community must preserve together,” Nam Myung-sook, the Busan city councillor who co-organised the symposium, told the gathering. “Social consensus must be broadened.”

Her words were aimed at more than the audience in the room.

For three decades, survivors and their advocates have pressed Japan for a full and unequivocal accounting. They have met a familiar pattern: moments of apparent progress — the 1993 Kono statement acknowledging military involvement, the 2015 bilateral agreement with South Korea — followed by retreat. Japanese officials continue to dispute the term “sexual slavery.” Textbooks soften the language. Senior politicians visit Yasukuni Shrine, where convicted war criminals are honoured alongside the dead.

The symposium came as UNESCO’s World Heritage Committee convened in Busan, and the timing was deliberate. One of the gathering’s stated goals was to revive the push to have comfort women records inscribed on UNESCO’s Memory of the World register — an effort Japan has repeatedly blocked.

“Our aim is to reaffirm the historical facts of comfort women (受害) to the international community and explore directions that contribute to peace and human rights,” said Yu Ying-mo, senior adviser to the Carter Human Rights Center’s Asia region, in remarks prepared for the event.

A statue, a warning

The symposium also addressed an incident that has become a diplomatic flashpoint: the recent removal of a comfort women memorial statue in Taiwan.

The statue, one of dozens erected across East Asia and beyond, was taken down in recent months. Organisers in Busan described the removal as “an erroneous approach that erases historical wounds and weakens collective memory,” according to the symposium’s programme.

For advocates, the Taiwan case illustrates what happens when political pressure is allowed to dictate historical memory. “Statues, memorial halls, and archives related to comfort women are important spaces of memory that testify to the victims’ suffering and history,” the Carter Human Rights Center said in its written address. “They must be respected.”

Dozens of comfort women memorials now stand in cities from Seoul to San Francisco to Berlin. Each has become a site of diplomatic friction: Japan’s government has consistently objected to them, arguing they perpetuate what it calls an inaccurate narrative.

The shrinking window

Time is running out. Of the few hundred women who came forward in the 1990s, the number of surviving registered victims in South Korea has dwindled to single digits.

This demographic reality has injected new urgency into the preservation effort. Shim Ok-ju, a research professor at George Mason University Korea, told the symposium that the focus must now shift from oral testimony — soon to be lost — to documentation and education.

Seo Kyung-soon, a professor at Pukyong National University, presented findings from the so-called “Gwanbu Trial” records — a series of postwar legal proceedings in which comfort women sought compensation through Japanese courts. The documents, she argued, contain incontrovertible evidence of state orchestration.

A designated discussant panel followed, bringing together Kim Tae-wan, a political science professor at Dong-eui University; Kim Kyung-hee, an independent researcher; and Ahn Jun-young, a journalist from the Busan Ilbo newspaper. The format was designed to bridge academia and public consciousness — to test whether scholarly findings could survive the scrutiny of working journalists and political scientists.

The international dimension

The comfort women issue has never been purely bilateral. In 1996, the UN Special Rapporteur on violence against women concluded that the system constituted “military sexual slavery.” In 2022, the UN Committee on the Elimination of Discrimination against Women urged Japan to “ensure that the issue is accurately reflected in school curricula.”

Yet the gap between international consensus and Japanese government policy remains wide. Prime ministerial statements offer “apologies and remorse” but stop short of accepting legal responsibility. Reparations have come from private funds, not the state.

For organisers of the Busan symposium, the path forward runs through multilateral institutions. UNESCO recognition, they argue, would make historical revisionism harder to sustain. But Japan has made clear it will oppose any such move, as it did when Chinese documents related to the 1937 Nanjing Massacre were inscribed in 2015.

“Facing history squarely and respecting it is a fundamental value that the international community should share,” the symposium’s organisers concluded.

This 15 August, as Japan observes its National Memorial Service for the War Dead, the women who survived — and those who did not — will be remembered in rooms like the one in Busan. Their numbers are dwindling. The question is whether their story will outlast them.

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