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Why Turkey's struggling economy is impacting countries across the globe

Turkey's impact on South Africa's economy
Turkey's impact on South Africa's economy 07:21

Escalating tensions between Turkey and the U.S. are impacting the economies of other countries, including South Africa. The U.S. imposed sanctions on Turkey because an American pastor was being detained for accusations of espionage and terrorism.

Andrew Brunson has since been put on house arrest. But CBS News foreign correspondent Debora Patta reports the sanctions caused an immediate impact on Turkey's economy.

"The Turkish lira was already under pressure because this country relies so heavily on foreign goods," Patta said. "But literally overnight, the cost of everything -- petrol, gas, clothing, furniture -- it all rose pretty dramatically."

The sanctions aren't just impacting Turkey. Patta said South Africa's currency dropped 10 percent, before making small gains. When something like that happens, she said it results in job losses, an especially difficult blow on a country dealing with high unemployment rates.

"When there's a ripple in one emerging economy, it affects all the other emerging economies and South Africa is part of a group known as the 'Fragile Five.' It also includes Turkey, Brazil, Indonesia and India and they all saw problems with their currency when the Turkish lira crashed," Patta said.

President Trump's recently debunked tweet concerning land seizures in South Africa isn't helping. He wrote that he was asking Secretary of State Mike Pompeo to look at the "large scale killing of farmers," and cited a Fox News report claiming the South African government was taking land from white farmers.

"Land seizure, land grabs, call them what you will… has not begun in South Africa," Patta said. "Yes, the ruling party would like to reform the land bills in South Africa. They want a parliamentary, constitutional amendment to do so but nothing has actually taken place here."

However, the tweet has already affected markets in South Africa, and Patta reports there's fear in the country that the U.S. would impose sanctions on South Africa over the false claims.

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