Revolution has been brewing in Kazakhstan this week. That should worry investors in Turkey, as well as the country's president, Recep Tayyip Erdogan. They would be blinkered if they cannot see that the same ingredients are already in place for a similar uprising in Turkey.
In Kazakhstan, public buildings have been set ablaze, the government has resigned and dozens of protesters are said to have been killed. This was all prompted by discontent at higher fuel prices. That has spilled over into capital markets, with Kazakhstan’s sovereign bonds 40bp wider as a result.
Life in Turkey is increasingly expensive too. Inflation is running at 36% as Erdogan refuses to divert from his path of cutting interest rates. The country's one week repo rate has been cut by 500bp since September as he insists that the large majority of economists are wrong and that lower interest rates tame inflation rather than drive it.
The Turkish lira has lost over 40% of its value as a result. Many Turks are, rather understandably, not amused at having lost nearly half their wealth in just a few months.
If there is a difference between the situations in Turkey and Kazakhstan, it is arguable that it is worse in the former, where the leadership is stoking the flames and there is a lack of central bank independence.
Turkey should see the unrest in Kazakhstan as a warning from its own future. Low interest rates are no longer a vote winner. Taming inflation is.
Investors in Turkish credit too should be wary. Kazakhstan was thought of as a stable country, ruled firmly by the Nazarbayev family. But a statue of the former president Nursultan Nazarbayev was pulled down on Wednesday.
Erdogan is thought to have tight control of Turkey — indeed, he has seen off coup attempts and protests before — but Kazakhstan has shown that anything is possible if enough of the population are suitably furious.
Despite this chaos, some in capital markets still expect Turkey to bring a sovereign bond as early as this month and believe investors will queue up to buy it. No one appears to be pricing in what will happen if the Turkish population takes a prompt from the Kazakhs and heads to the streets — and this is with the benefit of the recent example of the Arab Spring, when anti-government protests spread rapidly throughout the Arab world.
The uprising in Kazakhstan this week was unexpected. But if it happens in Turkey next, no one should claim to be shocked.