This analysis aimed to identify clinical factors associated with positivity on repeat ⁶⁸Ga-PSMA-11 PET/CT after a negative scan in patients with recurrent prostate cancer (PCa) under observation. Methods: This single-center, retrospective analysis included patients who underwent at least 2 ⁶⁸Ga-PSMA-11 PET/CT scans (PET1 and PET2) at UCLA between October 2016 and June 2021 for recurrent PCa with negative PET1 and no PCa-related treatments between the 2 scans. Using Prostate Cancer Molecular Imaging Standardized Evaluation criteria to define negative and positive scans, the final cohort was divided into PET2-negative (PET2-Neg) and PET2-positive (PET2-Pos). The same PET1 was used twice in the more than 2 PET cases with inclusion criteria fulfilled. Patient characteristics and clinical parameters were compared between the 2 cohorts using Mann–Whitney U test and Fisher exact test. Areas under the curve (AUCs) of the receiver operating characteristic and the Youden index were computed to determine the discrimination ability of statistically significant factors and specific cut points that maximized sensitivity and specificity, respectively. Results: The final analysis included 83 sets of 2 PET/CT scans from 70 patients. Thirty-nine of 83 (47%) sets were PET2-Neg, and 44 of 83 (53%) sets were PET2-Pos. Prostate-specific antigen (PSA) increased from PET1 to PET2 for all 83 (100%) sets of scans. Median PSA at PET1 was 0.4 ng/mL (interquartile range, 0.2–1.0) and at PET2 was 1.6 ng/mL (interquartile range, 0.9–3.8). We found higher serum PSA at PET2 (median, 1.8 vs. 1.1 ng/mL; P = 0.015), absolute PSA difference (median, 1.4 vs. 0.7 ng/mL; P = 0.006), percentage of PSA change (median, +270.4% vs. +150.0%: P = 0.031), and median PSA velocity (0.044 vs. 0.017 ng/mL/wk, P = 0.002) and shorter PSA doubling time (DT; median, 5.1 vs. 8.3 mo; P = 0.006) in the PET2-Pos cohort than in the PET2-Neg cohort. Receiver operating characteristic curves showed cutoffs for PSA at PET2 of 4.80 ng/mL (sensitivity, 34%; specificity, 92%; AUC, 0.66), absolute PSA difference of 0.95 ng/mL (sensitivity, 62%; specificity, 71%; AUC, 0.68), percentage of PSA change of a positive 289.50% (sensitivity, 48%; specificity, 82%; AUC, 0.64), PSA velocity of 0.033 ng/mL/wk (sensitivity, 57%; specificity, 80%; AUC, 0.70), and PSA DT of 7.91 mo (sensitivity, 71%; specificity, 62%; AUC, 0.67). Conclusion: Patients with recurrent PCa under observation after a negative ⁶⁸Ga-PSMA-11 PET/CT scan with markedly elevated serum PSA levels and shorter PSA DT are more likely to have positive findings on repeat ⁶⁸Ga-PSMA-11 PET/CT.

Single-domain antibodies (sdAbs) demonstrate favorable pharmacokinetic profiles for molecular imaging applications. However, their renal excretion and retention are obstacles for applications in targeted radionuclide therapy (TRT). Methods: Using a click-chemistry–based pretargeting approach, we aimed to reduce kidney retention of a fibroblast activation protein α (FAP)–targeted sdAb, 4AH29, for ¹⁷⁷Lu-TRT. Key pretargeting parameters (sdAb-injected mass and lag time) were optimized in healthy mice and U87MG (FAP⁺) xenografts. A TRT study in a pancreatic ductal adenocarcinoma (PDAC) patient-derived xenograft (PDX) model was performed as a pilot study for sdAb-based pretargeting applications. Results: Modification of 4AH29 with trans-cyclooctene (TCO) moieties did not modify the sdAb pharmacokinetic profile. A 200-µg injected mass of 4AH29-TCO and an 8-h lag time for the injection of [¹⁷⁷Lu]Lu-DOTA-PEG₇-tetrazine resulted in the highest kidney therapeutic index (2.0 ± 0.4), which was 5-fold higher than that of [¹⁷⁷Lu]Lu-DOTA-4AH29 (0.4 ± 0.1). FAP expression in the tumor microenvironment was validated in a PDAC PDX model with both immunohistochemistry and PET/CT imaging. Mice treated with the pretargeting high-activity approach (4AH29-TCO + [¹⁷⁷Lu]Lu-DOTA-PEG₇-tetrazine; 3 x 88 MBq, 1 injection per week for 3 wk) demonstrated prolonged survival compared with the vehicle control and conventionally treated ([¹⁷⁷Lu]Lu-DOTA-4AH29; 3 x 37 MBq, 1 injection per week for 3 wk) mice. Mesangial expansion was reported in 7 of 10 mice in the conventional cohort, suggesting treatment-related kidney morphologic changes, but was not observed in the pretargeting cohort. Conclusion: This study validates pretargeting to mitigate sdAbs’ kidney retention with no observation of morphologic changes on therapy regimen at early time points. Clinical translation of click-chemistry–based pre-TRT is warranted on the basis of its ability to alleviate toxicities related to biovectors’ intrinsic pharmacokinetic profiles. The absence of representative animal models with extensive stroma and high FAP expression on cancer-associated fibroblasts led to a low mean tumor-absorbed dose even with high injected activity and consequently to modest survival benefit in this PDAC PDX.

Cancer of unknown primary (CUP) represents a heterogeneous group of metastatic tumors for which standardized diagnostic work-up fails to identify the primary site. We aimed to describe the Peter MacCallum Cancer Centre experience with ¹⁸F-FDG PET/CT in extracervical CUP with respect to detection of a primary site and its impact on management. A secondary aim was to compare overall survival (OS) in patients with and without a detected primary site. Methods: CUP patients treated between 2014 and 2020 were identified from medical oncology clinics and ¹⁸F-FDG PET/CT records. Information collated from electronic medical records included the suspected primary site and treatment details before and after ¹⁸F-FDG PET/CT. Clinicopathologic details and genomic analysis were used to determine the clinically suspected primary site and compared against 2 independent masked reads of ¹⁸F-FDG PET/CT images by nuclear medicine specialists to determine sensitivity, specificity, accuracy, and the rate of detection of the primary site. Results: We identified 147 patients, 65% of whom had undergone molecular profiling. The median age at diagnosis was 61 y (range, 20–84 y), and the median follow-up time was 74 mo (range, 26–83 mo). Eighty-two percent were classified as having an unfavorable CUP subtype as per international guidelines.¹⁸F-FDG PET/CT demonstrated a primary site detection rate of 41%, resulted in a change in management in 22%, and identified previously occult disease sites in 37%. Median OS was 16.8 mo for all patients and 104.7 and 12.1 mo for favorable and unfavorable CUP subtypes, respectively (P < 0.0001). Median OS in CUP patients when using ¹⁸F-FDG PET/CT, clinicopathologic, and genomic information was 19.8 and 8.5 mo when a primary site was detected and not detected, respectively (P = 0.016). Multivariable analysis of survival adjusted for age and sex remained significant for identification of a potential primary site (P < 0.001), a favorable CUP (P < 0.001), and an Eastern Cooperative Oncology Group status of 1 or less (P < 0.001). Conclusion: ¹⁸F-FDG PET/CT plays a complementary role in CUP diagnostic work-up and was able to determine the likely primary site in 41% of cases. OS is improved with primary site identification, demonstrating the value of access to diagnostic ¹⁸F-FDG PET/CT for CUP patients.

Neoadjuvant therapy in patients with locally advanced rectal cancer (LARC) has achieved good pathologic complete response (pCR) rates, potentially eliminating the need for surgical intervention. This study investigated preoperative methods for predicting pCR after neoadjuvant short-course radiotherapy (SCRT) combined with immunochemotherapy. Methods: Treatment-naïve patients with histologically confirmed LARC were enrolled from February 2023 to July 2023. Before surgery, the patients received neoadjuvant SCRT followed by 2 cycles of capecitabine and oxaliplatin plus camrelizumab. ⁶⁸Ga-labeled fibroblast activation protein inhibitor ([⁶⁸Ga]Ga-FAPI-04) PET/MRI, [¹⁸F]FDG PET/CT, and contrast-enhanced MRI were performed before treatment initiation and before surgery in each patient. PET and MRI features and the size and number of lesions were also collected from each scan. Each parameter’s sensitivity, specificity, and diagnostic cutoff were derived via receiver-operating-characteristic curve analysis. Results: Twenty eligible patients (13 men, 7 women; mean age, 60.2 y) were enrolled and completed the entire trial, and all patients had proficient mismatch repair or microsatellite-stable LARC. A postoperative pCR was achieved in 9 patients (45.0%). In the visual evaluation, both [⁶⁸Ga]Ga-FAPI-04 PET/MRI and [¹⁸F]FDG PET/CT were limited to forecasting pCR. Contrast-enhanced MRI had a low sensitivity of 55.56% to predict pCR. In the quantitative evaluation, [⁶⁸Ga]Ga-FAPI-04 change in SUL_peak percentage, where SUL_peak is SUV_peak standardized by lean body mass, had the largest area under the curve (0.929) with high specificity (sensitivity, 77.78%; specificity, 100.0%; cutoff, 63.92%). Conclusion: [⁶⁸Ga]Ga-FAPI-04 PET/MRI is a promising imaging modality for predicting pCR after SCRT combined with immunochemotherapy. The SUL_peak decrease exceeding 63.92% may provide valuable guidance in selecting patients who can forgo surgery after neoadjuvant therapy.

Understanding which patients with human epidermal growth factor receptor 2 (HER2)–negative or –low metastatic breast cancer (MBC) benefit from HER2-targeted strategies is urgently needed. We assessed the whole-body heterogeneity of HER2 expression on ⁸⁹Zr-trastuzumab PET (HER2 PET) and the diagnostic performance of HER2 PET in a large series of patients, including HER2-negative and -low MBC. Methods: In the IMPACT-MBC study, patients with newly diagnosed and nonrapidly progressive MBC of all subtypes were included. Metastasis HER2 status was determined by immunohistochemistry and in situ hybridization.⁸⁹Zr-trastuzumab uptake was quantified as SUV_max and SUV_mean. HER2 immunohistochemistry was related to the quantitative ⁸⁹Zr-trastuzumab uptake of all metastases and corresponding biopsied metastasis, uptake heterogeneity, and qualitative scan evaluation. A prediction algorithm for HER2 immunohistochemistry positivity based on uptake was developed. Results: In 200 patients, ⁸⁹Zr-trastuzumab uptake was quantified in 5,163 metastases, including 186 biopsied metastases. With increasing HER2 immunohistochemistry status, uptake was higher (geometric mean SUV_max of 7.0, 7.6, 7.3, and 17.4 for a HER2 immunohistochemistry score of 0, 1, 2, or 3+, respectively; P < 0.001). High uptake exceeding 14.6 (90th percentile) was observed in one third of patients with a HER2-negative or -low metastasis biopsy. The algorithm performed best when lesion site and size were incorporated (area under the curve, 0.86; 95% CI, 0.79–0.93). Conclusion: HER2 PET had good diagnostic performance in MBC, showing considerable whole-body HER2 heterogeneity and uptake above background in HER2-negative and -low MBC. This provides novel insights into HER2-negative and -low MBC compared with standard HER2 immunohistochemistry on a single biopsy.

This study evaluates the diagnostic utility of PET/MRI for primary, locoregional, and nodal head and neck squamous cell carcinoma (HNSCC) through systematic review and metaanalysis. Methods: A systematic search was conducted using PubMed and Scopus to identify studies on the diagnostic accuracy of PET/MRI for HNSCC. The search included specific terms and excluded nonhybrid PET/MRI studies, and those with a sample size of fewer than 10 patients were excluded. Results: In total, 15 studies encompassing 638 patients were found addressing the diagnostic test accuracy for PET/MRI within the chosen subject domain. Squamous cell carcinoma of the nasopharynx was the most observed HNSCC subtype (n = 198). The metaanalysis included 12 studies, with pooled sensitivity and specificity values of 93% and 95% per patient for primary disease evaluation, 93% and 96% for locoregional evaluation, and 89% and 98% per lesion for nodal disease detection, respectively. An examination of a subset of studies comparing PET/MRI against PET/CT or MRI alone for evaluating nodal and locoregional HNSCC found that PET/MRI may offer slightly higher accuracy than other modalities. However, this difference was not statistically significant. Conclusion: PET/MRI has excellent potential for identifying primary, locoregional, and nodal HNSCC.

Tumor hypoxia, an integral biomarker to guide radiotherapy, can be imaged with ¹⁸F-fluoromisonidazole (¹⁸F-FMISO) hypoxia PET. One major obstacle to its broader application is the lack of standardized interpretation criteria. We sought to develop and validate practical interpretation criteria and a dedicated training protocol for nuclear medicine physicians to interpret ¹⁸F-FMISO hypoxia PET. Methods: We randomly selected 123 patients with human papillomavirus–positive oropharyngeal cancer enrolled in a phase II trial who underwent 123 ¹⁸F-FDG PET/CT and 134 ¹⁸F-FMISO PET/CT scans. Four independent nuclear medicine physicians with no ¹⁸F-FMISO experience read the scans. Interpretation by a fifth nuclear medicine physician with over 2 decades of ¹⁸F-FMISO experience was the reference standard. Performance was evaluated after initial instruction and subsequent dedicated training. Scans were considered positive for hypoxia by visual assessment if ¹⁸F-FMISO uptake was greater than floor-of-mouth uptake. Additionally, SUV_max was determined to evaluate whether quantitative assessment using tumor-to-background ratios could be helpful to define hypoxia positivity. Results: Visual assessment produced a mean sensitivity and specificity of 77.3% and 80.9%, with fair interreader agreement ( = 0.34), after initial instruction. After dedicated training, mean sensitivity and specificity improved to 97.6% and 86.9%, with almost perfect agreement ( = 0.86). Quantitative assessment with an estimated best SUV_max ratio threshold of more than 1.2 to define hypoxia positivity produced a mean sensitivity and specificity of 56.8% and 95.9%, respectively, with substantial interreader agreement ( = 0.66), after initial instruction. After dedicated training, mean sensitivity improved to 89.6% whereas mean specificity remained high at 95.3%, with near-perfect interreader agreement ( = 0.86). Conclusion: Nuclear medicine physicians without ¹⁸F-FMISO hypoxia PET reading experience demonstrate much improved interreader agreement with dedicated training using specific interpretation criteria.

The tumor marker cancer antigen 15-3 (CA 15-3) is that most commonly used to monitor metastatic breast cancer during active therapy and surveillance for disease recurrence after treatment. The association of CA 15-3 and ¹⁸F-FDG PET/CT findings can be considered complementary, since any significant rise may indicate the presence of disease and imaging is able to map the tumor sites. Although current guidelines do not recommend the routine performance of CA 15-3 in asymptomatic patients being followed up after definitive breast cancer treatment, most oncologists perform serial assessment of the tumor markers as part of routine follow-up of patients. The aim of this study was to evaluate the correlation between CA 15-3 levels and ¹⁸F-FDG PET/CT scan findings in patients with recurrent breast cancer. Methods: This was a cross-sectional study with data collected retrospectively. Patients being evaluated for breast cancer recurrence with ¹⁸F-FDG PET/CT imaging and CA 15-3 level were included. Evaluation of the association between CA 15-3 levels and ¹⁸F-FDG PET/CT scan findings was then done. Results: In total, 154 cases were included in this study; 62 patients had recurrence (positive) on the ¹⁸F-FDG PET/CT scans, whereas 92 patients had normal (negative) findings on follow-up ¹⁸F-FDG PET/CT scans. There was an association between CA 15-3 levels and the presence or absence of recurrence on ¹⁸F-FDG PET/CT scans, with 84.4% (27/32) of patients who had elevated CA 15-3 levels having disease recurrence on ¹⁸F-FDG PET/CT and 84.4% (27/32) of patients who had elevated CA 15-3 levels having disease recurrence on ¹⁸F-FDG PET/CT as well as a correlation with the burden of metastases. Most patients with disease recurrence on ¹⁸F-FDG PET/CT, however, had normal CA 15-3 levels. Conclusion: Higher CA 15-3 levels correlate with breast cancer recurrence on ¹⁸F-FDG PET/CT as well as with burden of metastasis. Notably, CA 15-3 levels within the reference range do not exclude breast cancer disease recurrence since more than half of patients with recurrence had normal CA 15-3 levels. ¹⁸F-FDG PET/CT should therefore be considered in patients with suspected breast cancer recurrence but normal CA 15-3 levels.

Bispecific antibodies (bsAbs) are engineered to target 2 different epitopes simultaneously. About 75% of the 16 clinically approved bsAbs have entered the clinic internationally since 2022. Hence, research on biomedical imaging of various radiolabeled bsAb scaffolds may serve to improve patient selection for bsAb therapy. Here, we provide a comprehensive overview of recent advances in radiolabeled bsAbs for imaging via PET or SPECT. We compare direct targeting and pretargeting approaches in preclinical and clinical studies in oncologic research. Furthermore, we show preclinical applications of imaging bsAbs in neurodegenerative diseases. Finally, we offer perspectives on the future directions of imaging bsAbs based on their challenges and opportunities.

Following early acceptance by urologists, the use of surgical robotic platforms is rapidly spreading to other surgical fields. This empowerment of surgical perception via robotic advances occurs in parallel to developments in intraoperative molecular imaging. Convergence of these efforts creates a logical incentive to advance the decades-old image-guided robotics paradigm. This yields new radioguided surgery strategies set to optimally exploit the symbiosis between the growing clinical translation of robotics and molecular imaging. These strategies intend to advance surgical precision by increasing dexterity and optimizing surgical decision-making. In this state-of-the-art review, topic-related developments in chemistry (tracer development) and engineering (medical device development) are discussed, and future scientific robotic growth markets for molecular imaging are presented.

Can Cyprus Be Reunified? 18 July 2018 — 12:30PM TO 1:30PM Anonymous (not verified) 29 June 2018 Chatham House | 10 St James's Square | London | SW1Y 4LE

The latest round of Cyprus peace negotiations to resolve the Cypriot issue broke down in Crans-Montana, Switzerland in July 2017. The speaker will offer the Turkish Cypriot perspective on future developments to reunifying the divided island.

THIS EVENT IS NOW FULL AND REGISTRATION HAS CLOSED.

Turkey Is on the Road to a Severe Economic Crisis Expert comment sysadmin 12 July 2018

The deteriorating state of the economy is President Erdoğan’s Achilles’ heel and the biggest threat to his currently unrivalled leadership.

Fifteen days after Turkey’s parliamentary and presidential elections, Turkish President Recep Tayyip Erdoğan appointed a new government under radically enhanced executive powers granted by the constitution. He chose 16 loyalists and partisan figures to ensure that he remains front and centre in decision-making and policy formation.

Most notably, Erdoğan sacrificed the former deputy prime minister and ex-Merrill Lynch chief economist Mehmet Şimşek in favour of his inexperienced son-in-law Berat Albayrak as finance and treasury minister to manage the fragile economy. Whether he has the competence to placate jittery financial markets and foreign investors is debatable.

Erdoğan will prioritize short-term growth at all costs to the detriment of macroeconomic and financial stability. That entails foregoing interest rate hikes needed to contain runaway double-digit inflation and to support a plummeting lira that depreciated nearly 20 per cent this year. It also means loosening the purse strings, flooding the markets with cheap credit and sponsoring rampant construction and mega-infrastructure projects.

True to his promise, he has appropriated to himself, by presidential decree, the right to hire the central bank governor, deputies and monetary policy committee members for a four-year term. This completes the politicization of the once-respected and independent central bank and is in line with his unorthodox monetary views that higher interest rates equates with higher inflation.

Erdoğan associates progress with gleaming high-rise buildings, gargantuan infrastructure show-pieces and elevated growth rates. He is spiking the fuel to boost the speed of the sputtering mid-sized Audi-style Turkish economy to achieve superior Ferrari growth rates. As any mechanic knows, these tactics are unsustainable in the long term. Eventually, the engine will burn out.

He does not seem to appreciate that Turkey’s growth model requires an overhaul to join the league of rich economies. It is too reliant on consumer spending and government-sponsored infrastructure and construction projects funded by speculative financial flows rather than on sustained private investment and exports.

Net result: the corporate sector’s foreign-exchange liabilities have climbed to a record $328 billion as of the end of 2017. When netted against foreign-exchange assets, it is still a worrying $214 billion. Its US dollar and euro debt pile has more than doubled since 2008, 80 per cent of which is held by domestic banks. Given these acute balance-of-payments conditions, it is not farfetched that Turkey may impose capital controls in the short-to-medium term to restrict the outflow of foreign assets. At $50 billion, the current account deficit – defined as the sum of the trade balance and financial flows – is not even covered by the central bank’s net international reserves at nearly $45 billion.

Unsurprisingly, some major Turkish companies are negotiating with their bondholders to restructure their sizeable foreign loan obligations as lira devaluation increases the financial burden. Should a significant number of Turkish corporates default on their foreign obligations, this would reverberate across the Turkish economy, cause mass consumer panic, shake the confidence of international financial markets and potentially lead to a crisis within the Turkish financial system and to a deep and prolonged economic recession.

Revealingly, Erdoğan’s nationalist allies, the Nationalist Movement Party (MHP), refused to join his government. Perhaps Devlet Bahçeli, the MHP leader, learned the lessons of the 2001 financial crisis as a member of a three-party government. So he is opting to project influence from the outside, rather than risk being tainted with responsibility for an economic downturn.

Turkey’s president is doubling down on his singular approach to governance irrespective of the fallout. Notwithstanding his current political dominance, the deteriorating state of the economy is his Achilles’ heel and the biggest threat to his currently unrivalled leadership.

Taking Stock of Turkey's Trade Policy 11 September 2018 — 5:00PM TO 6:15PM Anonymous (not verified) 23 August 2018 Chatham House | 10 St James's Square | London | SW1Y 4LE

As the only large economy outside of the EU with a customs union agreement, Turkey has a unique trade policy. Amid domestic economic challenges, Turkey’s trade minister, Ruhsar Pekcan, will discuss prospects for upgrading the EU-Turkey customs union. She will also discuss relations between the UK and Turkey and outline strategies for post-Brexit trade.

Attendance at this event is by invitation only.

EU-Turkey Customs Union: Prospects for Modernization and Lessons for Brexit 12 December 2018 — 12:30PM TO 1:30PM Anonymous (not verified) 26 November 2018 Chatham House | 10 St James's Square | London | SW1Y 4LE

Turkey and the EU have been in a customs union since 1995. Both sides recognize that the current agreement is in need of modernization and have agreed to open negotiations to expand its scope to include services, public procurement, agriculture and other elements that would help bring it into the 21st century.

At the same time, the UK Parliament is debating whether to approve the agreement on the UK’s withdrawal from the EU. It includes a backstop which – if triggered – would keep the UK and the EU in a single customs territory which would limit the disruption of withdrawal but hamper Britain’s ability to pursue an independent trade policy. The political declaration proposes building on this customs arrangement as the basis for the future relationship.

In this context, the speaker will discuss the current EU-Turkey customs union arrangement and its shortcomings, examine the prospects for its modernization and share his insights on the lessons for the UK’s future trading relationship with the EU.

The event will launch the briefing paper ‘EU-Turkey Customs Union: Prospects for Modernization and Lessons for Brexit’.

Attendance at this event is by invitation only.

Turkey's Foreign Policy in the Middle East 14 May 2019 — 12:30PM TO 1:30PM Anonymous (not verified) 29 April 2019 Chatham House | 10 St James's Square | London | SW1Y 4LE

Turkey is cooperating closely with Russia to secure its border with Syria and to encourage a long-term political resolution to the Syrian conflict. Its efforts have staved off a humanitarian catastrophe in the northern Syrian province of Idlib and initiated the trilateral ‘Astana Process’ with Russia and Iran as the primary framework to settle the future of Syria.

By contrast, Turkey and the US disagree on a range of important issues including Turkey’s purchase of the Russian-made S-400 air missile defence systems and American support for the PKK-affiliated Peoples’ Protection Units (YPG) in Syria.

In this session, the speaker will outline Turkey’s foreign policy priorities in the Middle East and share his country’s perspectives on the US and Russian policies in that region.

Attendance at this event is by invitation only.

Turkey in 2020 and Beyond: What Lies Ahead for Turkish Politics? 25 November 2019 — 12:30PM TO 1:30PM Anonymous (not verified) 6 November 2019 Chatham House | 10 St James's Square | London | SW1Y 4LE

Turkey witnessed some major developments over the last year. In August 2018, the dramatic Lira devaluation caused the Turkish economy to go into recession. In the 2019 local elections, which took place during the economic downturn, the Republican Peoples’ Party (CHP) mayoral candidates took control of Ankara and Istanbul after 25 years of dominance by the ruling Justice and Development Party (AKP).

The election results might lead to a rethink of the AKP leadership and consequences on Turkish politics will depend on Erdoğan’s interpretation of this reversal of his political fortune.

Will this affect the long-standing alliance between AKP and MHP that has characterised Turkish foreign policy for the past few years? What impact will this have on both the domestic and international level? Finally, will Turkey’s recent incursion into Syria have lasting effect on the country’s alliances with other powers and its standing?

In this context, the speaker will analyse the significance of these changes and the future trajectory of Turkish politics, economics and foreign policy.

A Credit-fuelled Economic Recovery Stores Up Trouble for Turkey Expert comment sysadmin 17 February 2020

Turkey is repeating the mistakes that led to the 2018 lira crisis and another freefall for the currency may not be far off.

Since the 2018 economic crisis, when the value of the lira plummeted and borrowing costs soared, Turkey’s economy has achieved a miraculous ‘V-shaped’ economic recovery from a recession lasting three quarters to a return back to quarterly growth above 1 per cent in the first three months of 2019.

But this quick turnaround has been built on vast amounts of cheap credit used to re-stimulate a consumption and construction boom. This so-called ‘triple C’ economy generated a rapid growth spurt akin to a modestly able professional sprinter injected with steroids.

This has made the currency vulnerable. The lira has steadily depreciated by 11 per cent against the US dollar since the beginning of 2019 and crossed the rate of 6 lira versus the US dollar on 7 February. And there are further warning signs on the horizon.

Credit bonanza

Statistics reveal that Turkish domestic credit grew by around 13 per cent on average throughout 2019. The credit bonanza is still ongoing. Mortgage-backed home sales jumped by a record high of 600 per cent last December alone and the 2019 budget deficit catapulted by 70 per cent due to higher government spending.

Turkey’s central bank fuelled this credit expansion by cutting interest rates aggressively to below inflation and, since the start of this year, purchasing lira-denominated bonds equivalent to around one-third of total acquisitions last year to push yields lower.

Equally, it has linked bank lending to reserve requirements – the money that banks have to keep at the central bank – to boost borrowings via state and private banks. Banks with a ‘real’ loan growth (including inflation) of between 5 and 15 per cent enjoy a 2 per cent reserve ratio on most lira deposits, which authorities adjusted from an earlier band of 10-20 per cent that did not consider double-digit inflation.

Cumulatively, bond purchases (effectively quantitative easing) and reserve management policies have also contributed to eased credit conditions.

Commercial banks have also reduced deposit rates on lira accounts to less than inflation to encourage consumption over saving. Together with low lending rates, the boost to the economy has flowed via mortgages, credit card loans, vehicle leasing transactions and general business borrowings.

Accordingly, stimulus is at the forefront of the government’s economic approach, as it was in 2017 and 2018. It does not seem to be implementing structural change to re-orient growth away from consumption towards productivity.

In addition, governance is, again, a central issue. President Recep Tayyip Erdogan’s near total monopolization of policymaking means he guides all domestic and external policies. He forced out the previous central bank governor, Murat Cetinkaya, in July 2019 because he did not share the president’s desire for an accelerated pace of interest rate reductions.

New challenges

Despite the similarities, the expected future financial turbulence will be materially different from its 2018 predecessor in four crucial respects.

Firstly, foreign investors will only be marginally involved. Turkey has shut out foreign investors since 2018 from lira-denominated assets by restricting lira swap arrangements. Unsurprisingly, the non-resident holdings of lira bonds has plummeted from 20 per cent in 2018 to less than 10 per cent today.

Secondly, the Turkish government has recently introduced indirect domestic capital controls by constraining most commercial transactions to the lira rather than to the US dollar or euro to reduce foreign currency demand in light of short-term external debt obligations of $191 billion.

Thirdly, the Turkish state banks are intervening quite regularly to soften Lira volatility, thereby transitioning from a ‘free float’ to a ‘managed float’. So far, they have spent over $37 billion over the last two years in a futile effort to buttress the lira. This level of involvement in currency markets cannot be maintained.

Fourthly, the Turkish state is being far more interventionist in the Turkish stock exchange and bond markets to keep asset prices elevated. Government-controlled local funds have participated in the Borsa Istanbul and state banks in sovereign debt to sustain rallies or reverse a bear market.

All these measures have one running idea: exclude foreign investors and no crisis will recur. Yet, when the credit boom heads to a downturn sooner or later, Turks will probably escalate lira conversions to US dollars; 51 per cent of all Turkish bank deposits are already dollar-denominated and the figure is still rising.

If Turkey’s limited foreign reserves cannot satisfy the domestic dollar demand, the government may have to impose comprehensive capital controls and allow for a double digit depreciation in the value of the lira to from its current level, with significant repercussions on Turkey’s political stability and economic climate.

To avoid this scenario, it needs to restore fiscal and monetary prudence, deal the with the foreign debt overhang in the private sector and focus on productivity-improving economic and institutional reforms to gain the confidence of global financial markets and Turks alike.

Webinar: Turkey’s Challenging Post-COVID 19 Outlook 7 May 2020 — 1:00PM TO 2:00PM Anonymous (not verified) 17 April 2020

Turkey Needs Radical New Direction to Save the Economy Expert comment NCapeling 23 November 2020

Turkey should emulate the reformist approach it adopted after the 2001 crisis to prevent an economic and financial breakdown - but this looks highly unlikely.

Although Ankara has witnessed what appears to be an abrupt change of its top economic team with two fresh appointments to key positions – Naci Ağbal as governor of the central bank and Lütfi Elvan as finance and treasury minister – a cardinal rule of thumb in Turkish politics is that the more drama one sees, the less policy change there will actually be.

Financial markets reacted positively to the moves in the expectation they will signal a change of Turkey’s overall economic approach, but the reality is Turkish president Recep Tayyip Erdoğan is simply putting loyalists into key bureaucratic positions to help ensure the primary role of these functions becomes ‘selling’ his policies more effectively, rather than altering them.

The hope from the markets – which saw the beleaguered Turkish lira appreciate against the US dollar at the news – is that Turkey adopts substantial interest rate increases as well as measures to repress liquidity expansion in order to temper its controversial so-called ‘Triple C’ approach of using cheap credit to stimulate growth with an unsustainable consumption and construction boom.

But instead, Erdoğan’s declaration after the appointments were made indicates the new restrictions in which they will now operate, saying ‘we are in a historic struggle against those who want to force Turkey into modern capitulations through the shackles of interest rates, foreign exchange rates and inflation’.

Learn from past successes

To resolve its current underlying economic problems, Turkey should actually be looking to its recent past and aiming to emulate the approach pursued by former prime minister Bülent Ecevit during the 2001 financial crisis when he recruited Kemal Derviş, a senior World Bank official with extensive experience and international contacts in economic, financial, and monetary affairs.

As economy minister with a broad mandate to spearhead a durable economic recovery plan, Dervis established independent market regulatory agencies covering banking, telecommunications, energy, and other key sectors, and strengthened the competition authority.

He also either liquidated or merged insolvent banks, granted central bank autonomy to guarantee price stability, and ensured recruitment was based on competence, expertise, and meritocracy. Crucially, his productivity-enhancing restructuring blueprint was designed in Turkey rather than being imposed by the International Monetary Fund (IMF) or another external agency.

Ecevit also turbocharged reforms motivated in part by a desire to join the EU with constitutional, political and legal modernization which widened personal freedom, significantly curtailed capital punishment, liberalized the cultural environment for Kurds, and fortified the rule of law. And one of his coalition partners in that work, the right-wing pro-Turkish National Action Party (MHP), is now allied with the current ruling Justice and Development Party (AKP).

His foreign minister Ismail Cem also enhanced Turkey’s relations with both Europe and the US, initiated the so-called ‘earthquake diplomacy’ with his Greek counterpart George Papandreou after twin tragedies struck both nations in 1999, and largely avoided entanglement in Middle Eastern conflicts.

The net result of all these actions was that Turkey emerged from the crisis with greater resilience, a more robust regulatory framework, upgraded political and economic institutions, rapidly decreasing inflation, a credible central bank, a stronger financial system, closer relations with the EU and US, and heightened domestic and foreign investor confidence.

But now that similar woes are engulfing Turkey anew, is Erdogan and the AKP/MHP alliance able – and willing – to repeat the Ecevit recipe? Present signs indicate they are highly unlikely to as they are too committed to entrenching the Triple C model.

Although this model will likely further consolidate their power, it will also empty the civil service of qualified professionals, restrict civil liberties and freedoms, and create more ideological politics, affecting Turkey’s foreign policy.

Such a stubborn refusal to shift direction is increasing the inevitability of a deep economic and financial breakdown and so, unless Turkey undertakes a serious policy departure instead of continuing to resort to the quick fix approach, there is real likelihood it will simply accelerate towards disaster.

Turkey’s foreign and domestic policy: A story of mutual creation? 1 November 2022 — 2:00PM TO 3:00PM Anonymous (not verified) 12 October 2022 Online

Panellists discuss the link between Turkey’s domestic and foreign policies under President Erdoğan.

From Turkey’s ongoing rapprochement with its erstwhile Middle Eastern antagonists to its Syria policy and earlier approach towards the West, there has been extensive discussion on the domestic drivers behind Ankara’s foreign policy.

Less discussed but no less important is how Turkish foreign affairs have shaped its internal politics. Under the rule of the Justice and Development Party (AKP) government and President Recep Tayyip Erdoğan, Turkey’s foreign and domestic policies have mutually reshaped each other.

In this webinar, launching Gönül Tol’s new book Erdoğan’s War: A Strongman’s Struggle at Home and in Syria, panellists will take stock of how Turkey’s domestic and foreign policies under the leadership of President Erdoğan have influenced and shaped each other. Speakers will also discuss the internal drivers behind Turkey’s current reset in relations with the Middle East, and examine how Ankara’s foreign affairs play into the country’s political and identity fault lines.

The event will be held on the record and will be live-streamed on the MENA Programme’s Facebook page.

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