Sunday, 30 March 2014

The End of the Line - Why Turkey is entering a period of unrest and what might emerge on the other side

On Wednesday 12th March, renewed violence broke out on the streets of several Turkish cities. Running battles raged between the police and civilians protesting against the continuing premiership of Recep Tayyip Erdogan. The confrontations were sparked by the funeral of Berkin Elvan, a 15-year old who had been struck from close range by a tear gas canister allegedly while walking to get bread during the last major protests in Istanbul in June; he has spent the intervening nine months in a coma, and his death takes the overall toll to eight. A crowd of 100,000 attended his funeral in Istanbul, the majority of whom then went home immediately afterwards. Those who remained escorted his coffin to the graveyard across town, as per tradition, and the burial was completed at 1pm local time. Four hours later, a large group was intercepted by police heading for Taksim Square, the gathering point for June's protests and location of 30-40 deaths under similar circumstances in the 1977 Taksim Square Massacre. 

The Turkish protest movement is passionate but fragmented. With intellectual capital Istanbul at its epicentre, the multi-generational movement has successfully used humour and mockery to lampoon President Erdogan, who has aided this portrayal of himself as pantomime villain by banning Twitter and Youtube in the country. On one side stands a police force which has proven itself very comfortable with the extensive use of tear gas and water cannon, on the other stands Communists, revolutionaries and separatist Kurds, along with Kemalists who canonize the secular values of Mustafa Kemal Ataturk, the father of Modern Turkey. The protestors are united by one clear goal: the removal of Mr Erdogan from power. The problem comes, as is so often the case, when the question is asked of what should follow ‘Tayyip’ - Erdogan’s disrespectful nickname. Evening street meetings are held by each sub-group, where Erdogan's latest crimes are deplored and grievances are nursed, but no figure has yet emerged from the streets with a coherent answer to Turkey's problems, let alone with the potential to replace him.

From Ataturk to Erdogan
Turkey has enjoyed mixed fortunes since Ataturk dragged the new nation from the ruins of the old Ottoman Empire following defeat in the First World War. In 1922 Ataturk abolished the Ottoman Sultanate and the Caliphate followed in 1924; he founded the Republic of Turkey in 1923. Ataturk envisioned a truly secular republic, and as part of the secularising process he banned the ever-divisive headscarf so characteristic of muslim women. Ataturk's one party state endured until 1946, when the end of World War Two brought a multi-party system with it. But removing religion from government left a power vacuum, and Ataturk chose to fill this void by resting his new country on the shoulders of the military. This decision would come back to haunt Turkey for much of the 20th century, with military coups in 1960, 1980 (followed by a period of martial law), and a forced deposition in 1997 hamstringing any attempts at concerted Turkish growth. The periods of true democracy were not much better, with Bulent Ecevit’s democratic government earning global opprobrium by invading Cyprus in 1974, and a shambolic succession of short-lived prime ministers bumbling through the 1990s.

In 2002, an attempt to reform Turkey's economy to bring it into line with EU accession requirements led to severe economic turbulence, and a dissatisfied populace demanded a general election. The newly formed AK Party, led by then mayor of Istanbul Recep Tayyip Erdogan, won by a significant margin, and the current regime was born. During the election and afterwards, Erdogan and his party were aided by the support of a religious figure named Fethullah Gulen, who had emigrated to the United States in 1999 but retained an extensive network of supporters in various positions of influence. The newly-installed Prime Minister Erdogan set about galvanising Turkey's economy with EU integration still very much in his sights. A period of explosive growth has been the result, and Turkey's GDP has risen from $232bn to $789bn since 2002.

Recep Tayyip Erdogan – a power corrupted

Mr Erdogan’s first moves as Turkey’s premier were exactly what the country needed. While he was setting the economy on track for expansion and growth, he was simultaneously defanging the Turkish military. One by one the influential generals were put on trial, until the once-dominant army had been politically neutered; this is an impressive achievement. Under Erdogan’s stewardship, Turkey has grown to be the sixth largest European economy and is a member of Jim O’Neil’s “MINT” group of countries to watch, alongside Mexico, Indonesia and Nigeria. Turkey’s performance is even more impressive when compared with that of its immediate neighbours: Greece and Cyprus have both required EU bailouts, Syria is mired in civil war, Iran is an international pariah crippled by sanctions and Iraq is still struggling in the aftermath of US occupation. In his second election in 2007, Erdogan’s support was increased from an already dominant position to 47% of the vote, and this dominance was sustained in 2011.

 

As time has worn on, however, Mr Erdogan has begun to undermine some of Turkey’s secular traditions. Although a former mayor of Istanbul, the prime minister’s main powerbase is in the rural expanse of Anatolia, which is traditionally less well-educated and more Islamic than the more Western-facing Istanbul. This has allowed Mr Erdogan to quietly pursue the gradual introduction of more traditionalist attitudes, most clearly evidenced by the headscarf issue; Turkey has seen a return of headscarves into its culture, most famously on the first lady herself. There was much furore over a move to make Turkish Airlines’ cabin deck uniforms more traditional, while the protests of June 2013 were sparked by a proposal to bulldoze a park in the centre of Istanbul and replace it with a shopping centre built in the style of a traditional Ottoman army barracks. Istanbul’s liberal population is appalled by the prospect of regression in its womens’ rights, and every step in an Islamic direction is met with great outcry.


Meanwhile Mr Erdogan’s behaviour becomes increasingly autocratic. His ill-judged split with former ally Gulen has led to a soft civil war ta
kin
g place between the two parties. As part of this struggle, the forces of Gulen have released recordings containing Mr Erdogan advising his son on how to hide large sums of money, and one in which Mr Erdogan appears to dictate the news to the press. Erdogan has responded in extremely un-democratic ways, reassigning hundreds of law enforcers who had been investigating these cases, and personally banning Twitter and Youtube in a manner which has since been described as illegal by members of the Turkish parliament. In his speeches, Mr Erdogan refers to these tapes as an attack on the state, betraying his own personal perspective that he and the state are now one and the same. It is still unclear whether he will succeed in his current goal of increasing the power of the presidency, ready for him to take the Putin-esque move of assuming that role in advance of the end of his third term as prime minister. Failing that, it is suspected that he will abolish the AK Party’s internal rule against running for a fourth consecutive term, leaving him almost certain to remain in power unless forcibly dislodged.


A growth economy in peril
Turkey under Erdogan swiftly developed a powerful presence in various global markets. Due to a winning combination of low wages and a close proximity to European, Russian and Middle Eastern markets, Turkey found that it was able to compete strongly in white goods (largely through manufacturer Beko), textiles, furniture and car-making.This competitiveness has stimulated foreign investment, and these investors have been rewarded with astronomical returns.

During this period of sustained success however, a problem has been growing under the surface. As so often happens in economics, Turkey has become a victim of its own success. The vast inflows of external capital into the economy have caused the lira to rise in value, which, along with the higher wages of the average Turk, has decreased Turkey’s competitiveness. This decrease has led to a rising current account deficit. What this means is that every year, Turkey is importing (machinery, chemicals, semi-finished goods, fuels and transport equipment) more than it is exporting. In order to bring in all these products from abroad, Turkey needs money, and it is the aforementioned foreign investors who have been providing it. The reason this situation is coming to a head, having been sustaining itself quite comfortably for several years, is that the United States has recently started shutting down its quantitative easing policy. At various intervals since November 2008, the Federal Reserve has been pumping money into the markets, meaning that there was plenty to be allocated to economies like Turkey’s; but now the gravy train is coming to a halt. Many emerging economies find themselves in a predicament similar to Turkey, but none to quite the same extent.

What does this all mean? It means that it is very likely that Turkey is about to enter a period of quite severe economic turbulence; considering the fact Mr Erdogan is finding it hard to keep his people onside even in the current climate, it is hard to imagine how he will be able to survive it without resorting to drastic measures.

The strategic outlook
Russia’s recent indiscretions at the other end of the Black Sea have improved Turkey’s strategic position in two ways. If the US decides to use a strategy of encirclement to contain the newly assertive Russian Federation, Turkey’s position at the gateway to the Black Sea makes it a key building block for such a strategy. As a member of NATO, Turkey’s aid can probably be relied upon as long as the current regime remains in place; this leaves the US with a strategic incentive to support Erdogan through his difficult period. Meanwhile, Europe suddenly finds itself in the market for alternative suppliers of oil and gas, with Turkey an obvious transit state for new pipelines stretching up from Kurdistan. Again, this leaves the Europeans with a stake in keeping Turkey stable and friendly. US and EU support could be sorely tested, however, if Mr Erdogan’s crackdowns were to become significantly bloodier than they have been thus far.


If it is able to overcome its short term financial problems, Turkey could well become the dominant power in its region. With the largest economy by some margin it could be a powerful counterbalance for Balkan countries that are still eyeing EU accession, while shared Turkic ethnicity with many of the states of the Caucasus and Central Asia could be a basis for lasting economic relationships. With its Islamic credentials making it a potential leader to the fractured Middle East, and with a secular government still appealing to the post-religious Europe, Turkey could be capable of achieving that rare goal: being all things to all men.

Next steps
In order to realise this bright future, Turkey needs to do two things. It must find a way to rid itself of Mr Erdogan, a giant personality that has tipped over the edge from being powerful and effective to being self-serving and faintly maniacal. The Turkish people are unlikely to receive help in achieving this from outside Turkey (with the exception of Mr Gulen in Pennsylvania), and Mr Erdogan’s mandate remains assured for as long as he has the majority from Anatolia. A worsening economic situation and Mr Gulen’s revelations might go some of the way to eroding the latter, while a serious political challenge from within his party would help Turkey to begin to imagine a post-Erdogan world. The enigmatic Fethullah Gulen’s is not a name sung by those on the streets, so he would face an uphill struggle should he decide to try to seize control for himself, though he has already proven himself a shrewd string-puller, so this state of affairs may change. To many, the situation with Gulen brings back memories of Iran before the revolution of 1979, but today’s Turkey is considerably less susceptible to that kind of Islamic revolution than Iran was at that point. Sitting President Abdullah Gul is generally viewed from the street as Erdogan’s patsy, so he would probably not be a viable alternative to the current Prime Minister.

The second urgent requirement is a restructuring of the economy. Turkey must build a roadmap for how it will achieve the next stage in its development, possibly using a combination of education and retraining to become a service economy in the manner of South Korea. It will become more adept at using its growing regional clout to shape its surroundings to its benefit, and this will provide plenty of opportunities to enrich itself further, but first it must escape the trap it has built for itself. A difficult period is beginning, but if the ensuing unrest creates the circumstances for the removal of Mr Erdogan and a reshaping of the economy, then this crisis could come to be viewed as the greatest opportunity that Ataturk’s nation has seen since the fall of the Ottoman Empire.

NB there are several charts and graphics that complement this piece but which are not supported by blogspot. For a complete version please contact me

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