Monthly Archives: December 2017

A Looming Crisis for Turkey’s President

Turkey’s Looming Crisis

Dispatches From The Edge

Dec. 18, 2017

 

Viewed one way, Turkish President Recep Tayyip Erdogan looks unassailable: He weathered last year’s coup attempt, jailed more than 50,000 opponents, fired more than 100,000 civil servants, beheaded the once powerful Turkish military, eviscerated much of his parliamentary opposition, dismissed almost half of the county’s elected officials, and rammed through a constitutional referendum that will make him an all-powerful executive following the 2019 election. In the meantime, a seemingly never-ending state of emergency allows him to rule by decree.

 

So why is the man running scared?

 

Because the very tools that Erdogan has used to make himself into a sort of modern day Ottoman sultan are backfiring. The state of emergency is scaring off foreign investment, which is central to the way the Turkish economy functions. The loss of experienced government workers has put an enormous strain on the functioning of the bureaucracy. And the promises he made to the electorate in order to get his referendum passed are coming due with very little in the till to fulfill them.

 

Part of the problem is Erdogan himself. In that sense he is a bit like US President Donald Trump, who has also alienated allies with a combination of bombast and cluelessness. The Turkish President is in a war with Washington over a corruption trial, at loggerheads with Germany (and most of the European Union) over his growing authoritarianism and, with the exception of Russia, China, Qatar and Iran, seems to be quarreling with everyone these days. It is certainly a far cry from a decade ago when the foreign policy of Ankara was “Zero problems with the neighbors.” As one Turkish commentator put it, it’s now “No neighbors without problems.”

 

What has thrown a scare into Erdogan, however, is not so much the country’s growing diplomatic isolation, but the economy and how that might affect the outcome of presidential elections in 2019.

 

In the run up to the constitutional referendum last year, the government handed out loans and goodies to the average Turk. Growth accelerated, unemployment fell, and the poverty rate was reduced. But the cost of priming that pump has come due at the very moment that international energy prices are on the rise. Turkey imports virtually all of its energy, but when the price of oil was down to a little more than $30 a barrel, the budget could handle it.

 

The price of oil in December, however, was close to $60 a barrel, and a recent agreement between the two largest producers—Saudi Arabia and Russia—to curb production will drive that price even higher in the future. Rate hikes for gasoline and heating will be up sharply in the coming months

 

Turkish unemployment is over 13 percent, inflation is close to 12 percent, and the Turkish lira has fallen 12 percent against the dollar. With energy costs rising and currency value declining, Turkey is struggling through an economic double whammy.

 

Economist Timur Kuran of Duke University says the Turkish economy is in serious trouble. “The AKP (Erdogan’s Justice and Development Party) is doing massive long-term damage to the Turkish economy. Corruption is up, the quality of education has fallen, the courts are massively politicized, and the people are afraid to speak honestly.” Kuran argues that any growth is based on short-term investments, so–called “hot money,” drawn in by high interest rates. “This is not a sustainable strategy. It makes Turkey highly vulnerable to a shock that might cause an outflow of resources.”

 

Under Erdogan Corruption does seem to be increasing. In 2013 Transparency International ranked Turkey 53ed out of 175 countries on its Corruption Perception Index. By 2016 the country had risen to 75th out of 176 countries.

 

Turkey’s economy is highly dependent on foreign money, but the continuing state of emergency and rule by decree is scaring off investors. Figures by the Central Bank show that Turkey is losing $1 billion a week in foreign investments. Britain, a major investor in Turkey, has reduced its investments by 20% since the declaration of the state of emergency.

 

The uncertainly has spread as well to Turkish citizens, who are putting their money into foreign investments in order to preserve their savings. From the end of 2016 to this November, Turks moved $17.2 billion to foreign firms.

 

Erdogan is blaming Turkish banks—in particular the Central Bank—for rising interest rates and the downturn in the economy. But Kemel Kilicdaroglu, leader of the centrist and secular opposition Republican People’s Party (CHP) argues that “The real reason why foreign investments other than real estate purchases are decreasing is that [foreign investors] feel insecure in a country where law, justice and press freedom are non-existent.”

 

The state of emergency allows the government to suppress trade union strikes, but it has been less successful in damping down what was once a AKP strong suit: rural farmers.

 

One of Erdogan’s economic “reforms” was to open Turkish markets to foreign competition, which has resulted in losses for the country’s live stock and agricultural growers. Meat producers are up in arms over an agreement with Serbia to import 5,000 tons of red meat, and tea, grape, tobacco and apricot growers have been hard hit by falling prices and foreign competition. Hazelnut growers were so incensed at the government’s base price for their produce that they organized a large march under the banner of “Justice for Hazelnuts.”

 

A study found that foreign imports had reduced the number of families involved in growing tobacco from 405,882 families in 2002 to 56,000 in 2015.

 

It is not so much the marches that worry Erdogan, but the fact that some 20 million rural Turks are up in arms against the government, anger that might translate into votes in 2019. In the April 2017 referendum, rural votes solidly supported the AKP, while urban centers—particularly their youth—voted no. Losing cities like Ankara and Istanbul—the city where Erdogan began his political career—was a shock for the AKP, but losses in rural areas would be a political train wreck.

 

While Erdogan strains to keep the economic lid on long enough to get through 2019, there are fissures opening within his own party. A wing of the AKP is not happy with Erdogan’s foreign policy disputes and the impact that they are having on the economy.

 

On his right, former interior minister Meral Aksener has formed the Iyi Parti or “Good Party” and says she plans to challenge Erdogan for the presidency. Aksener appeals to the more nationalist currents in the AKP and hopes to attract support from the extreme right wing National Action Party (MHP). She is currently polling around 16 percent.

 

Polls indicate that the “Good Party” is cutting into the AKP’s support, which has dropped to 38 percent. Erdogan needs at least 51 percent, the figure that he claims he got in the referendum (outside observers called the election deeply flawed, however). Aksener could split Erdogan’s support within the AKP and the MHP, thus denying him a majority.

 

Nor has the CHP thrown in the towel, Besides organizing marches by angry rural residents, Party leader Kilicdaroglu pulled off a 25-day, 280-mile “Justice March” last summer that may have involved as many as a million people.

 

The Peoples’ Democratic Party (HDP), Turkey’s leftist party closely tied to its Kurdish population, has been decimated by arrests and seizure of its assets, but it is still the third largest party in parliament. “It may appear that injustice has won, but this will not last,” HDP parliament member Meral Danis Bestas told Al-Monitor. “Turkey’s future truly lies in democracy, rights and freedom.”

 

Erdogan has enormous power and has out muscled and out maneuvered his opponents for the past 20 years. But Turks are growing weary of his rule and, if the economy stumbles, he may be vulnerable.

 

That’s why he is running scared.

 

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Rolling Snakes Eyes in the Indo-Pacific

Rolling Snake Eyes in the Indo-Pacific

Dispatches From The Edge

Dec. 3, 2017

 

With the world focused on the scary possibility of war on the Korean Peninsula, not many people paid a whole lot of attention to a series of naval exercises this past July in the Malacca Strait, a 550-mile long passage between Sumatra and Malaysia through which pass over 50,000 ships a year. With President Trump and North Korean leader Kim Jong Un exchanging threats and insults, why would the media bother with something innocuously labeled “Malabar 17”?

 

They should have.

 

Malabar 17 brought together the U.S., Japanese, and Indian navies to practice shutting down a waterway through which 80 percent of China’s energy supplies travel and to war game closing off the Indian Ocean to Chinese submarines. If Korea keeps you up at night, try imagining the outcome of choking off fuel for the world’s second largest economy.

 

While Korea certainly represents the most acute crisis in Asia, the diplomatic maneuvers behind Malabar 17 may be more dangerous in the long run. The exercise elevates the possibility of a confrontation between China, the U.S. and India, but also between India and Pakistan, two nuclear-armed countries that have fought three wars in the past 70 years.

 

This tale begins more than a decade and a half ago, when then Under Secretary of Defense for Policy, Douglas Feith—one of the most hawkish members of the George W. Bush administration—convened a meeting in May 2002 of the US-India Defense Policy Group and the government of India.

 

As one of the founding members of the Non-Aligned Movement, India traditionally avoided being pulled into the Cold War between the U.S. and the Soviet Union.

 

But the Bush administration had a plan for roping Indian into an alliance aimed at containing China, with a twist on an old diplomatic strategy: no stick, lots of carrots.

 

At the time India was banned from purchasing uranium on the international market because it had detonated a nuclear weapon in 1974 and refused to sign the Nuclear Non-Proliferation Treaty (NPT). There was a fear that if India had nuclear weapons, eventually so would Pakistan, a fear that turned real in 1998 when Islamabad tested its first nuclear device.

 

Pakistan also refused to sign the NPT.

 

Under the rules of the Treaty, both countries were excluded from the 45-member Nuclear Suppliers Group. While the ban was not a serious problem for Pakistan—it has significant uranium deposits—it was for India. With few domestic resources, India had to balance between using its uranium for weapons or to fuel nuclear power plants. Given that India is energy poor, that was a difficult choice.

 

When the Bush administration took over in 2001, it immediately changed the designation of China from “ strategic partner” to “strategic competitor.” It also resumed arms sales to New Delhi despite India’s 1998 violation of the NPT with a new round of tests.

 

Then Washington offered a very big carrot called the 1-2-3 Agreement that allow India to bypass the NPT and buy uranium so long as it is not used for weapons. This, however, would allow India to shift all of its domestic fuel into weapons production.

 

At the time, Pakistan—which asked for the same deal and was rebuffed—warned that the Agreement would ignite a nuclear arms race in Asia, which is precisely what has happened. India and Pakistan are busily adding to their nuclear weapons stocks, as is China and, of course, North Korea.

 

The 1-2-3 Agreement went into effect in 2008, although it has not been fully implemented.

 

Complicating this whole matter are on-going tensions between India and Pakistan in Kashmir, over which the two have fought three wars, the last of which came close to going nuclear. Rather than trying to defuse a very dangerous conflict, however, the Bush administration ignored Kashmir. So did the Obama administration, in spite of a pre-election promise by Barack Obama to deal with the on-going crisis. ,

 

It would appear that a quid pro quo for India moving closer to the US is Washington’s silence on Kashmir.

 

In 2016, the Obama administration designated India a “Major Defense Partner,” made Japan a permanent member of the Malabar exercises, and began training Indian pilots in “advanced aerial combat” at Nellis Air Force Base in Nevada.

 

The Trump administration has added to the tensions between India and Pakistan by encouraging New Delhi to deploy troops in Afghanistan. While India already has paramilitary road building units in Southern Afghanistan, it does not have regular armed forces. From Islamabad’s point of view, Indian troops in Afghanistan will effectively sandwich Pakistan, north and south. So far, India has resisted the request.

 

The government of Prime Minister Narendra Modi has also rolled out a new military strategy called “Cold Start,” which allows the Indian military to attack and pursue “terrorists” as deep as 30 kilometers into Pakistani territory.

 

The danger is that a “Cold Start” operation could be misinterpreted by Islamabad as a major attack by the far larger Indian army. Faced with defeat, Pakistan might resort to tactical nuclear weapons, a decision that Pakistan has recently delegated to front-line commanders. Since India cannot respond in kind—it has no tactical nukes—New Delhi would either use its high yield strategic nuclear weapons or accept defeat. Since the latter is unlikely, the war could quickly escalate into a general nuclear exchange.

 

Such an exchange, according to a recent study by Scientific American, would not only kill tens of millions of people in both countries, it would cause a worldwide nuclear chill that would devastate agriculture in both hemispheres. In terms of impact, as scary as the Korea crisis is, a nuclear war between Pakistan and India would be qualitatively worse.

 

During his recent Asia tour, Trump used the term “Indo-Pacific” on a number of occasions, a term that was originally coined by the rightwing Prime Minister of Japan, Shinzo Abe. Japan is currently in a tense standoff with China over several uninhabited islands in the East China Sea, and Abe is trying to dismantle Japan’s post-World War II “peace” constitution that restricts Japanese armed forces to “self-defense” operations.

 

Abe is also closely associated with a section of the Japanese political spectrum that argues that Japan was simply resisting western imperialism in World War II and denies or downplays its own colonial role and the massive atrocities committed by the Japanese army in China and Korea.

 

Asia looks like a pretty scary place these days. A rightwing Hindu fundamentalist government in India and a revanchist Japanese Prime Minister are allied with an increasingly unstable administration in Washington to surround and contain the second largest economy in the world.

 

There are some hopeful developments, however. For one, following the recent Communist Party Congress, China seems to be looking for a way to turn down the heat in the region. After initially threatening South Korea for deploying a US anti-missile system, the THAAD, Beijing has stepped back and cut a deal: no additional THAAD systems, no boycott of South Korean goods.

 

The Chinese also dialed down tensions in the mountainous Doldam region on the border of China and Bhutan with an agreement for a mutual withdrawal of troops. There has been some progress as well in finding a non-confrontational solution to China’s illegal claims in the South China Sea, although Beijing is not likely to abandon its artificial islands until there is a downsizing of US naval forces in the region.

 

And in spite of the tensions between the two, India and Pakistan formally joined the Shanghai Cooperation Organization this past summer, a security grouping largely dominated by Russia and China.

 

The danger here is that someone does something stupid and things get out of hand. There are those who point out that in spite of similar tensions during the Cold War, all concerned survived those dark times. That, however, ignores the fact that the world came very close to nuclear war, once by design—the Cuban missile crisis—and several times by accident.

 

If you keep rolling the dice, eventually they come up snake eyes.

 

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