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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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Turkey’s Dangerous Moment

Turkey’s Dangerous Referendum

Dispatches From the Edge

April 5, 2017


At first glance, Turkey’s Recep Tayyip Erdogan’s drive to create an executive presidency with almost unlimited power through a nationwide referendum looks like a slam-dunk.


The man has not lost an election since 1994, and he has loaded the dice and stacked the deck for the April 15 vote. Using last summer’s failed coup as a shield, he has declared a state of emergency, fired 130,000 government employees, jailed 45,000 people—including opposition members of parliament—and closed down 176 media outlets. The opposition Republican People’s Party says it has been harassed by death threats from referendum supporters and arrests by the police.


He has deliberately picked fights with Germany, Austria and the Netherlands to help whip up a storm of nationalism, and he charges that his opponents are “acting in concert with terrorists.” Selahattin Demirtas, a Member of Parliament and co-chair of the Kurdish-dominated People’s Democratic Party, the third largest political formation in Turkey, is under arrest and faces 143 years in prison. Over 70 Kurdish mayors are behind bars.


So why is the man so nervous?


He has reason to be. The juggernaut that Erdogan and his Justice and Development Party (AKP) put together to dismantle Turkey’s current political system and replace it with a highly centralized executive that will have the power to dismiss parliament, control the judiciary and rule by decree has developed a bit of a wobble.


First, the nationalists—in particular the rightwing Nationalist Movement Party (MHP)—are deeply split. The leadership of the MHP supports a “yes” vote on the referendum, but as much as 65 percent of the rank and file are preparing to vote “no.”


Second, there is increasing concern over the economy, formerly the AKP’s strong suit. Erdogan won the 2002 election on a pledge to raise living standards—especially for small businesses and among Turks who live in the country’s interior—and he largely delivered on those promises. Under the AKP’s stewardship, the Turkish economy grew, but with a built-in flaw.


The 2000s were a period of rapid growth for emerging economies like China, Russia and Turkey. China did it by building a high-power manufacturing base and exporting its goods to the global market. Russia raised its economy through commodities sales, particularly oil and gas. Turkey’s huge spurt, however, was built around domestic consumption, in particular real estate and construction. Indeed, Turkey’s historical strength in manufacturing has languished.


Much of the construction boom was financed through foreign loans, and as long as investors were comfortable with the internal situation in Turkey—and money was cheap—real estate was Erdogan’s Anatolian tiger. But when the U.S. tightened up its monetary policies in 2013, those loans either dried up or got more expensive.


Turkey was not the only victim of U.S. tight money policies. Washington’s monetary shift also badly damaged the economies of Brazil, South Africa, India, and Indonesia. But the effect on Ankara has been to increase the debt burden and fuel a growing trade imbalance. Growth fell from 6.1 percent in 2015 to 1.5 percent in 2016.


The fall of the Turkish lira means imports cost more at a time when Turkey’s private sector has accrued a foreign exchange deficit of $210 billion. Consumer inflation will almost certainly reach 11 or 12 percent this year and the jobless rate is over 12 percent. Among young Turks, age 15-24, that figure is over 25 percent. Almost four million people are out of work and many Turks now spend 50 percent of their income on food, housing and rent.


To add to these woes, the credit agencies Moody’s, Standard and Poor, and Fitch recently designated Turkey’s status as “non-investment” and its economic outlook from “stable” to “negative.” Part of the downgrade was based on politics, not the economy. Fitch pointed out that if Erdogan’s referendum passed, it “would entrench a system in which checks and balances have been eroded.”


Businesses are generally not bothered by authoritarian regimes, but they are uncomfortable with instability and a cavalier approach to the rule of law. Erdogan’s erratic foreign policies and the government’s seizures of private businesses whose owners choose to oppose him do not create an atmosphere conducive to investor confidence.


There is growing nervousness about Erdogan’s internal and external policies. Turkey once had a policy of “no trouble with neighbors,” but Ankara is suddenly fighting with everyone. Erdogan strongly supported efforts to overthrow the Syrian government of Bashar al-Assad. He backed the Muslim Brotherhood in Egypt. He put troops in Northern Iraq aimed at keeping the Kurds down. He started a war with his own Kurds and bullies and intimidates any domestic opposition.


A case in point is the lucrative tourist industry that normally contributes about 5 percent of Turkey’s GNP. Turkey is the sixth most visited country in the world, but the industry was down 36 percent in 2016, a loss of $10 billion. Formerly, large numbers of tourists visited from Russia and Iran. But Erdogan alienated the Russians when he shot down one of their bombers in 2015 and angered Iran when he went to Saudi Arabia and denounced the Iranians for trying to spread their Shiite ideology and “Persian nationalism” throughout the Middle East. As a result, tourism from both countries largely dried up, hitting Istanbul and coastal cities like Antalya particularly hard.


Iranians and Russians are not the only nationalities looking elsewhere for fun and relaxation. Erdogan’s sturm und drang rhetoric directed at the European countries that refused to let him campaign for his referendum among their Turkish populations—“Nazis” and “fascists” were his favored epithets to describe Germany, the Netherlands, and Austria—has tourists from the West looking to vacation in Greece, Spain and Italy instead.


To label Erdogan’s foreign policy “schizophrenic” is an understatement.


On one hand, he has backed off from the demand that Syrian President Assad must go and is working with the Russians and Iranians—and Egyptians—to find a negotiated settlement to the horrendous civil war.


On the other, he is wooing Saudi Arabia, the major backer of al-Qaeda associated groups in Syria who have made it clear that they are not interested in negotiations or a political settlement. He is also clashing with Russia and the U.S. over those countries support for Kurdish forces battling the Islamic State and al-Qaeda.


In one rather bizarre example of schizoid foreign policy, Turkey sponsored a Mar. 14 meeting of 50 Syrian tribal leaders to form an “Army of the Jezeera and Euphrates Tribes” to fight Russia, Iran, Hezbollah, and the Kurdish Democratic Union Party in Syria. Beating up on the Kurds is standard Erdogan politics, but how he squares attacking Russia and Iran while professing to support a diplomatic solution to the Syrian civil war is not clear.


His political calculations keep backfiring. For instance, when Iran signed the nuclear agreement and sanctions were lifted, Turkish businesses were eager to ramp up trade with Teheran. Erdogan’s searing attack on Iran largely scotched that, however, and the Turkish president has very little to show for it. Erdogan calculated that embracing Saudi Arabia and the Gulf monarchies would more than offset alienating Iran, but that has not happened.


The United Arab Emirates, Saudi Arabia, Kuwait and Qatar have a combined overseas investment portfolio of $262 billion, but only $8.7 billion of that went to Turkey. Europe makes up the great bulk of foreign investments in Turkey, distantly followed by the U.S. and Russia.


In part this is because the Gulf monarchies have their own financial difficulties, given low oil prices and the grinding war they are fighting in Yemen. But one suspects that Saudi Arabia is wary of Erdogan’s AKP, which is closely tied to the Muslim Brotherhood. The Saudis consider the Brotherhood their main enemy after Iran, and they strongly supported the 2013 military coup against the Egyptian Brotherhood government. The recent thaw in relations between Turkey and Egypt has resulted in a chilling of ties between Riyadh and Cairo.


The Islamic State has recently targeted Turkey, in large part as blowback from the Syrian civil war. Ankara formerly turned a blind eye to the Islamic State’s supply lines into Syria because Erdogan wanted to overthrow the Assad government, and replace it with a Muslim Brotherhood friendly regime. Now that policy has backfired on Turkey, much as U.S. support for the Mujahedeen against the Soviet Union in Afghanistan led to the formation of al-Qaeda and the 2001 attacks on the World Trade Towers and the Pentagon.


The Kurds have also engaged in a bombing campaign, but that is a response to Erdogan’s attacks on Kurdish cities in southeastern Turkey.


It is not clear how widespread the “no” vote sentiment is, although it supposedly includes up to 100 AKP parliament members worried about concentrating too much power in the President’s hands. Pollsters say a significant number of voters are unwilling to say how they will vote. In the current atmosphere of intimidation, it could mean those “refuse to say’ will turn to “no.” Certainly Erdogan’s prediction of a 60 percent approval has gone a glimmering.


What happens if people do vote “no”? And would Erdogan accept any outcome that wasn’t “yes”?


One disturbing development is the formation of a paramilitary group called “Stay as Brothers, Turkey.” Organized by Orhan Uzuner, whose daughter is married to Erdogan’s son, Bital, the group claims up to 500 members. The opposition newspaper Cumhuriyet calls the group “Erdogan’s militia,” and some members of the National Movement Party say the “Brothers” are sponsoring weapons training and encouraging members to arm themselves. With the military firmly under control following last year’s attempted coup, even a small group like the “Brothers” could play a major role if Erdogan decides he is finished with the democratic process.


Certainly the President is in a bind. He needs foreign investments and tourism to get the economy back on track, but he is alienating one ally after another.


He could tighten Turkey’s monetary policies to staunch the outflow of capital, but that would slow the economy and increase unemployment. He could lower interest rates to stimulate the economy, but that would further weaken the lira.


His strategy at this point is to double down on getting a “yes” vote. If he fails, things could get dangerous.




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The Price Of Turkey’s Election

Turkish Elections

Dispatches From The Edge

Nov. 2, 2015


If there is a lesson to be drawn from the Nov. 1 Turkish elections, it is that fear works, and there are few people better at engendering it than Turkish President Recep Tayyip Erdogan. Only five months after the Justice and Development Party (AKP) lost its majority in the Turkish parliament, a snap election put it back in the driver’s seat.


The cost of the victory, however, may be dear, because, to achieve it, Erdogan reignited Turkey’s long and bloody war with the Kurds, stood silent while mobs of nationalists attacked his opponents, and unilaterally altered the constitutional role of his office.


Observers from the Council of Europe and the Organization for Security and Cooperation in Europe said that violence and attacks on the media had a significant impact on the election. “Unfortunately we come to the conclusion that this campaign was unfair, and was characterized by too much violence and fear,” said Andreas Gross, a Swiss parliamentarian and head of the Parliamentary Assembly of the Council of Europe delegation,


At the same time the European Union (EU) seemed to favor an AKP victory. The EU Commission held off a report critical of Turkish democracy until after the vote. Two weeks before the election German Chancellor Angela Merkel visited Turkey bearing $3.3 billion in aid for Syrian refugees and an offer for Turkey to revive its efforts to get into the EU. Previously, Merkel had been opposed to Turkish membership in the EU.


The finally tally is almost everything Erdogan wanted, although he fell short of his dream of a supermajority that would let him change the nature of the Turkish political system from a parliamentary government to one ruled by a powerful and centralized executive—himself.


There are 550 seats in the Turkish parliament. The AKP took 49.4 percent of the vote and won 317 seats, an increase of 64 over the June election. While 276 seats is a majority, what Erdogan wanted was a supermajority of 367 seats that would allow him to change the constitution without involving the electorate. He did not achieve this.


The secular Republican People’s Party (CHP) picked up two seats over the June election for a total of 134 seats. The Kurdish-dominated leftwing People’s Democratic Party (HDP), which scored an historic 13.1 percent of the vote and 80 seats in the June election, managed to squeak by with 10.7% of the vote and 61 seats. If it had failed to pass the 10 Percent barrier for parliamentary representation, most of those seats would have gone to the AKP, possibly giving Erdogan’s party the supermajority it craved.


Indeed, it was a statement of the HDP’s resilience that despite the violence directed at the party and the arrest of many HDP activists, the organizations still managed to clear the 10 percent bar for representation in the parliament. The HDP announced that it planned to challenge several seats that the party says involved fraud.


The rightwing Nationalist Action Party (HDP) dropped 31 seats, falling to fourth place with only 40 seats. It would appear that most of their voters jumped to the AKP.


Erdogan set out to change the Turkish constitution back in 2007 and has pushed to reconstruct the country’s politics ever since. However, the AKP has never had 330 votes in the parliament, the number needed to place a referendum before the voters. Erdogan did not get that magic number this time either, but he is close and may be able to pry a dozen or so voters from the ranks of the rightwing nationalists and get his referendum.


The AKP won almost five million more votes than it did last June. Voter turnout was over 86 percent.


A referendum is a disquieting thought. Erdogan is a relentless campaigner, and opponents are worried that, while most Turks do not show much enthusiasm for his constitutional changes, scare tactics, repression, and money will push such a referendum through. Pre-election polls predicted that the AKP would get about the same number of votes in November that it got in June. They were dead wrong. Erdogan’s formidable political skills and his willingness to polarize the country are not to be underestimated.


While the AKP now has a majority, it is at the expense of re-igniting the war with the Kurds, a conflict that has cost Turkey $1.2 trillion and some 40,000 lives. It has also seen an almost unprecedented wave of attacks on the Kurdish party, its supporters, and the press.


Four days before the Nov. 1 election, police raided the offices of Ipek Media, closing down two newspapers and two TV stations. The news outlets have been handed over to a government trustee who is investigating them for “supporting terrorism.” Ipek Media is closely associated with Fethullah Gulen, an Islamic preacher currently living in exile in the U.S. Gulen and Erdogan were formerly allies, but had a falling out in 2012.


Erdogan has also gone after several other media outlets, including the Dogan Group, which owns Turkey’ popular daily, Hurriyet, and CNNTurk. Both outlets have interviewed politicians from the HDP, which the President charges is a front for the Kurdish Workers Party (PKK). The PKK is designated a terrorist organization and the target of Turkey’s current war on the Kurds.


While there is a relationship between the PKK and the HDP, the latter has sharply condemned the violence of the former and has a far broader base among Kurds and non-Kurds. Apparently some of the conservative religious Kurds, who voted for the HDP in June, were spooked by the violence and returned to the AKP.


Mobs led by the Ottoman Hearths—the youth arm of the AKP—and the Idealist Hearth—youth arm of the rightwing MHP—have burned HDP offices, attacked Kurdish businesses and homes, and attacked leftwing book stores. On Sept. 8 a nationalist mob rioted for seven hours, burning offices and stores in the city of Kirsehir, while police stood by and watched.


The chair of a local branch of the HDP, Demet Resuloglu, said she warned police about the mob, but they did nothing. She and several others were temporarily trapped in a bookstore by a mob that set the establishment on fire. “We escaped with our lives after jumping from the second floor. It was an organized affair. Everything happened with the knowledge of the police, the governor and everybody,” she told the news outlet Al-Monitor.


Similar attacks took place in the resort towns of Alanya and Manargat.


During the election campaign, Turkish Kurds and leftists were the targets of several bombings that took over 130 lives and were almost certainly the work of the Islamic State. But Erdogan and his prime minister, Ahmet Davutoglu, blamed it on the PKK and tried to tar the HDP with the same brush.


Selahattin Demirtas, a leader of the HDP and a member of parliament, is currently being investigated for supporting “terrorism” and insulting the president, Since Erdogan became president in August of last year, more than 240 people have been charged with insulting him.


Erdogan is likely to treat the AKP’s victory as endorsement of his campaign to overthrow Syrian President Bashar al-Assad, even though polls show that 63 percent of Turks disapprove of getting involved in Syria.


The war has turned into a disastrous quagmire, and the Europeans and the Russians are pushing for a political settlement. Erdogan—a man with a stubborn streak—will probably insist that Assad first must go, a formula that will endear him to the Gulf monarchies, but will almost certainly keep the war going. Turkey is already hosting 2 million Syrian refugees and millions more are headed toward Europe.


The Turkish president has unilaterally redefined the office of the president from one of neutrality to partisan activist. Rather than trying to form a coalition government after last June’s election—a major part of the president’s job—Erdogan sabotaged every effort to compromise, banking he could stir up the furies of sectarianism and fear to create the climate for a comeback. While the AKP is wealthy, parties like the HDP were tapped out by the June election and could not marshal the resources for another national campaign. In the last weeks of the election the HDP canceled rallies, fearing they would be attacked by rightwing mobs or create targets for Islamic State bombers.


Erdogan created chaos and then told voters the AKP was the only path to peace and stability. It was an argument a lot of voters bought, but the costs are high. The press has been muzzled, a war that was over has been re-started, and Turks and Kurds are once more at each other’s throats. The war in Syria is likely to drag on, and the polarization of Turkish society will deepen.


But the AKP has only a slim majority, and the peace and stability it promises is an illusion. As the British Guardian noted, “President Erdogan has got his majority back, but Turkey has been damaged in the process…Sadly, this election is unlikely to mark a passage into calm waters for Turkey.”













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