Author: Media Watch

  • How Turkey Dumbed Itself Down

    How Turkey Dumbed Itself Down

     

    Erdogan used to rely on Turkey’s best and brightest—until he replaced them with its worst and dimmest.

    By Durmus Yilmaz, Selim Sazak

    | August 22, 2018, 5:44 PM

    Recep Tayyip Erdogan holds with the president of Turkey’s Central Bank, Sureyya Serdengecti, a board featuring the new Turkish lira samples 25 October 2004 while Economy Minister Ali Babacan shows new coins during their presentation at central bank headquarters in the capital Ankara. (TARIK TINAZAY/AFP/Getty Images)

    For most of the 2000s, Turkey was one of the world’s fastest-growing economies. The country’s ambitions soared even higher than its achievements: Ankara openly aspired to be the world’s 10th-largest market with a $2 trillion economy, exports reaching $500 billion, and a per capita income of $25,000. Every buzzword that global financial elites invented for their favorite combination of high-potential emerging markets—such as Goldman Sachs’s MINT and the Economist Intelligence Unit’s CIVETS—had a T for Turkey.

    In the past month, the euphoria turned into anguish. The country plunged headfirst into an economic turmoil the likes of which it had not lived in a generation. Year to date, the lira lost almost 37 percent of its value against the dollar—around half of it during the roller coaster of the last month. Thirteen of the 35 Turks listed in Forbes’s list of the world’s wealthiest people have seen their fortunes fall below the billion mark. Turkish companies now hold more than $200 billion in debt, close to 10 percent of it due by the end of next year—much of it held by European banks. Spanish banks hold more than $80 billion in Turkish debt, French banks are owed close to $40 billion, and Italian banks about $20 billion. Turkey’s economic malaise can easily give Europe, and the entire global economy, a deadly flu.

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    Many observers attribute these troubles to its president, Recep Tayyip Erdogan, and there is no denying that he is part of the problem. Crises of the kind Turkey is facing are especially prevalent under populist strongmen, whose growth fetish comes at the cost of higher inflation, artificially undervalued currency, poor fiscal discipline, and unresponsive monetary policies.

    But to say that Erdogan is like other authoritarian leaders is to obscure the peculiarities of the Turkish story. Erdogan clearly subscribes to unorthodox economic theories—including an oft-repeated insistence that high-interest rates cause price inflation. But it’s only recently that such ignorance has had a tangible effect. If anything, Erdogan only managed to rise to unprecedented power because of his own earlier success at handling the economy. Before asking how bad Turkey’s economy will get, it’s important to understand where exactly it went wrong in the first place.

    In 2002, Erdogan rose to power by riding the wave of discontent set off by the worst economic crisis in Turkey’s modern history. When he was elected prime minister, the biggest question was whether he would abandon the program put in place by Kemal Dervis, the World Bank economist and future U.N. development chief tasked with getting the country out of the ditch. Dervis was parachuted in to bring Ankara’s house in order. In typical fashion, he privatized state-owned enterprises, slashed budget deficits, toughened banking regulations, and abolished foreign exchange controls. His austerity policies earned plaudits abroad, but the IMF’s bitter pill crushed the backs of many at home.

    In contrast, Erdogan was a protégé of Necmettin Erbakan, the Islamist ideologue who briefly served as prime minister in the early 1990s. Erbakan’s “just order” doctrine was a curious combination of Islamic conservatism and economic statism. Erbakan was an anti-capitalist: He championed interest-free banking and promoted state-led import substitution industrialization. (Although he was also an ardent anti-communist, as one would expect from a Cold War-era Islamist.) Many feared that Erdogan would adopt his mentor’s playbook, pausing and perhaps even undoing his predecessors’ reforms.

    These fears did not come to pass. Erdogan continued the reform agenda to a tee. The credit for this smooth transition rested with his economic team in the early years. Most of them were economists by training. Many had studied or worked abroad. They were firmly committed to the orthodoxies of liberal economic thinking. They are also long since gone.

    Erdogan’s decision-making in his earliest years in government was likely a product of political insecurity. Power had fallen into the lap of his Justice and Development Party (AKP) thanks to a quirk of Turkey’s electoral system, which requires parties to receive at least 10 percent of the ballots cast. In the 2002 election, the AKP won only one-third of the vote. (Factoring in the turnout rate, only a quarter of eligible voters had cast their ballot for Erdogan.) Yet the party received two-thirds of the parliament seats, because only two parties cleared the threshold.

    Erdogan and his political advisors knew full well that if they were to remain in office, they had to convert their luck into practical success. Good governance was crucial not only for the country’s security and stability but also for the longevity and legitimacy of its new leaders. Here lay the secret of the AKP’s early success: sound policies, stable leadership, and skilled personnel.

    The administration’s outward-looking face was Abdullah Gul, then one of Erdogan’s closest confidants. As a trained economist who had spent nearly a decade at the Islamic Development Bank before entering politics, Gul had a keen grasp of how the global economy worked. The U.S.-trained economy minister Ali Babacan and the Merrill Lynch banker-turned-finance minister Mehmet Simsek were his protégés, and much of the praise for Turkey’s economic miracle lay with them.

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    Some of the problems that have since grown chronic were apparent even then. For example, Deputy Prime Minister Abdullatif Sener, a professor-turned-bureaucrat who was Erbakan’s finance minister in the mid-1990s and one of the AKP’s co-founders, resigned in 2009 after publicly accusing Erdogan of corruption; he is now a member of the opposition. Generally speaking, however, Erdogan understood the importance of both economic growth and stability and went to great lengths to build and keep investor confidence.

    Leaders of the Central Bank, for example, were generally promoted from within the institution itself. The co-author of this article, who was the governor from 2006 to 2011, was educated in the United Kingdom and picked for the post after a 26-year career at the bank. The same held true for both his predecessor, Sureyya Serdengecti, a U.S.-educated bank veteran who was a holdover from Dervis’s team, and his replacement, Erdem Basci, a Johns Hopkins-educated economics professor. Even then, Erdogan rarely shied away from speaking his mind. Not until recently, however, were the independence and the competence of the bank’s leadership ever doubted.

    Such days are now a distant memory—and the shift occurred at precisely the worst time. In the 2000s, cheap credit deluged emerging markets. The reforms Turkey had to undertake to pull itself out of the economic crisis of the early 2000s proved to be a blessing in disguise, in that it made Turkey a haven for foreign investors. Also adding to this enthusiasm were Turkey’s soaring ambitions to join the European Union, which, if realized, would have made the country into an economic powerhouse in the eurozone. Had Ankara been wiser, it could have ridden this wave to foster innovation, improve productivity, increase competitiveness, and invest in high-value-added and knowledge-based enterprises. Instead, the cheap credit went to government giveaways, crony contracts, pork barrel projects, and conspicuous consumption, for which Turks have no one but themselves to blame.

    But once the global financial crisis struck and cheap credit started to dry up, these technocrats tried to warn him, if belatedly, of the importance of changing course. “If you speak the truth, have a foot in the stirrup,” goes a Turkish proverb—because those speaking truth to power quickly wear out their welcome. Even those at the highest echelons of government, such as Babacan and Simsek, warned publicly and repeatedly that Turkey needed to reduce private sector debt, restore rule of law, restrain credit-fueled consumption, and cool down the overheating economy. All these Cassandraesque warnings, however, fell on deaf ears. Those voicing them were shown out.

    Once Turkey exited IMF supervision and his own powers started reaching new heights in the late 2000s, Erdogan started worrying less about playing by the book. As Turkey kept growing, so did Erdogan’s political fortunes. As growth fetishism replaced good governance, technocrats made way for loyalists. The economic portfolio, which was once divided among three ministries, is now in the hands of one person, former Energy Minister Berat Albayrak, whose primary qualification for the job seems to be his marriage to Erdogan’s daughter. The advice Erdogan receives comes not from bankers and technocrats but rather from shock-jock media personalities, such as Yigit Bulut and Cemil Ertem, who have little to offer other than their unwavering fealty.

    Bulut is a particularly colorful figure. An ardent opponent-turned-diehard supporter, he is pushing some of the most bizarre and outlandish conspiracy theories and pseudoscience out of Ankara. Among his previous theories are that foreign chefs are spies, that the anti-government demonstrations of 2013 were incited by the German airline Lufthansa, and that Erdogan’s rivals have tried to kill him with telekinesis. In July, as Turkey’s troubles worsened, his televised diatribe accusing of treason the experts warning of an imminent currency meltdown quickly went viral. According to Bulut, the exchange rates were never going to weaken past 5 liras to a dollar. The dollar now trades at more than 6.

    The fact that Turkey’s best and brightest have made way for its worst and dimmest perfectly embodies the essence of the country’s malaise. At every level of society, loyalty has replaced merit as the sole criterion. Corruption and cronyism are eating the country away like cancer. From schools to courts to markets to media, there is not a single area where the decay is not apparent. Polarization has reached such heights that nothing seems to be enough to bring Turks together, even for a shared moment of grief or triumph.

    When one lacks the competence to deal with the challenges the country is facing, the common sense to reach out to those who do, and the courage to hear the inconvenient truths they would tell, all one is left with is denial, deceit, and conceit. A culture of impunity pervades the government: Nothing is ever wrong, and no one is ever responsible. The problem with such a culture is that facts don’t just disappear because one wants them to. Ankara is right in blaming Turkey’s troubles on its enemies, but it misses a crucial point: Turkey is its own worst enemy.

    It is still not too late for Turkey. All that is needed is a return to reality: develop policies on facts, not fantasy; seek not the lies you want but the truths you need; hire the best and brightest, let them do their jobs, and stand behind them when they do. None of this is difficult. Anyone who wants to do it, can. The problem is that those in Ankara don’t seem like they do.

    Durmus Yilmaz was the governor of the Central Bank of Turkey from 2006 to 2011. Since 2015, he has been serving as a member of parliament. He is currently the vice chair of Iyi Party, the centrist opposition party.

    Selim Sazak is a doctoral student in political science at Brown University. @scsazak

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    Tags: Argument, Economics, Middle East, Politics, Turkey

  • Turkey: Ankara Searches for an Economic Rescue

    Turkey: Ankara Searches for an Economic Rescue

    The Big Picture

    Questionable economic policies aggravated by ongoing tensions with the United States are impacting Turkey’s economy and its currency. Ankara is searching for a foreign benefactor to help right the ship, hoping that a change in rhetoric that will calm investors even though a major change of course is out of the question.

    See 2018 Second-Quarter Forecast
    See Middle East and North Africa section of the 2018 Second-Quarter Forecast

    An Attempt at Damage Control

    Amid continuing efforts to stabilize the Turkish lira, Economy and Finance Minister Berat Albayrak spoke with 3,000 investors on Aug. 16, attempting to address some of the issues facing the economy. During the call, he stated that Turkey was economically stable and that the country won’t resort to capital controls or assistance from the International Monetary Fund. He also noted that the government is working to reduce inflation. Investor reactions have so far been positive, albeit cautious. Now, Albayrak needs to move beyond the rhetorical space and take definitive action, potentially through the implementation of a new economic program, set to be unveiled in September.

    It remained unclear, though, why Albayrak does not expect one of Turkey’s largest banks, Halkbank, to face penalties for evading sanctions against Iran. Easing penalties on Halkbank were meant to be part of a deal between Ankara and Washington to release American pastor Andrew Brunson, but the White House has hinted that it will escalate punitive measures against Turkey. Talks between Turkey and the United States are ongoing, however, and a breakthrough is still possible at this stage.

    When it Comes to Qatar’s Support, the Devil is in the Details

    Turkey was quick to broadcast a Qatari pledge to directly invest $15 billion into Turkey after Qatar’s emir visited on Aug. 15. Qatar is a strategic regional partner to Turkey because of its ideological alignment and Doha’s need for alliances as a result of the Gulf Cooperation Council’s isolation campaign. Qatar has been downplaying its public support for Turkey — currently at loggerheads with Washington — as it attempts to manage its relationship with the United States. Though the mooted investment is impressive, it has yet to be revealed how the $15 billion will stabilize Turkey’s currency and ease the country’s debt burden in the short term. Hurriyet Daily News claims that Qatari investment will provide rapid funds to Turkish banks and financial markets.

    Kuwait publicly denied that it would provide Turkey with an emergency cash injection, but it may be discussing other means of support. Like Qatar, Kuwait would also prefer to avoid drawing attention to its support for Turkey. Antagonizing the United States is not something Kuwait wants to do, despite the value it places on a working relationship with Ankara. China could swoop in to provide financial assistance, but Beijing must also act carefully because of the ongoing trade spat with Washington.

    What Can Europe Do for Turkey?

    Turkish President Recep Tayyip Erdogan met with German Chancellor Angela Merkel on Aug. 16, and the pair agreed to have their finance ministers meet separately. Erdogan has also spoken with French President Emmanuel Macron and will meet with Merkel again in Germany in late September. As U.S.-Turkey relations deteriorate, Germany is taking the lead in trying to maintain stability in Turkey’s relationship with Europe and NATO. While Turkey and Ankara appear to be discussing financial aid, there are plenty of roadblocks in the way. Turkey is highly resistant to IMF aid, and Ankara will refuse any human rights conditions that accompany a deal for financial aid from Europe. Despite many potential options for outside support, Turkey will have a difficult time finding a single, viable avenue out of its current economic predicament.

  • Making Sense of Turkey’s Economic Crisis

    Making Sense of Turkey’s Economic Crisis

    A teller holds Turkish lira banknotes at a currency exchange office in Istanbul on Aug. 13, 2018.
    Aug 16, 2018 | 09:00 GMT

    Rather than ridicule his every move, it would behoove observers of Turkey to understand the political drivers behind Erdogan’s eccentric economic philosophy.

    Highlights
    • Even as Turkey’s economy bleeds capital in the midst of crisis, President Recep Tayyip Erdogan resists breaking from the outdated pro-growth economic model that built his political dynasty.
    • The president’s framing of the economic crisis as a foreign plot to weaken the state is proving effective in building nationalist fervor, giving him the option to move up municipal elections to November and hold off on economic tightening in the interim.
    • Geopolitical friction with the United States is bound to grow in the coming months, especially as Turkey comes under sharp scrutiny for violating Iran sanctions.
    • As Turkey balances among the great powers, Ankara will likely look for financial assistance from sources other than the International Monetary Fund, including China, Qatar and Kuwait.

    Once again, economists and financial experts are pulling out their hair trying to understand the populist, authoritarian enigma that is Turkish President Recep Tayyip Erdogan. With the lira plunging to scary new depths, many will ask incredulously how the political steward of an $850 billion economy could be so reckless as to brand utterly rational investors as enemies of the state. Why, they ask, would the government accuse us of conspiring across global financial capitals to take Turkey down — when it’s precisely that kind of bombastic language that will send more capital fleeing? And why won’t Erdogan just strike a seemingly simple diplomatic bargain over an American pastor if that will surely bring down the lira’s fever? Welcome to Turkey, my friends. To understand Erdogan’s behavior today, we have to rewind 15 years.

    The Big Picture

    Stratfor’s Third-Quarter Forecast said that Turkey will face strong economic and political headwinds as President Recep Tayyip Erdogan strong-arms the central bank to defy market pressure and as frictions escalate with the United States. A financial storm is now battering Turkey and driving Ankara to look outside the West for help.

    The Rise of a Pious Street Kid

    At the time, Turkey was emerging from a heavy economic storm that had banks reeling and had sent the government into the arms of the International Monetary Fund (IMF) for billions of dollars in life support. Politically, the country had also reached a major turning point: a stunning 2002 election victory by the recently founded Justice and Development Party (AKP) gave the Islamist-oriented organization a resounding majority. The victory was largely attributed to the resounding charisma of a pugnacious and pious politician from the tough streets of Kasimpasa district in Istanbul. As mayor of Istanbul and upon becoming prime minister in 2003, a humble and impassioned Erdogan dazzled the disillusioned masses with his promises of economic reform, battles against corruption and the spread of religious tolerance as “democratic Muslims,” taking great care to distinguish himself from the more severe, anti-Western line of his mentor and the country’s first Islamist prime minister, Necmettin Erbakan.

    Turks fed up with runaway inflation and the economic mismanagement of the old political establishment were eager for, or at least open to, a change. And change did come. Between 2002 and 2007, the gross domestic product grew at a galloping average of 7 percent ahead of the global financial crisis. GDP per capita nearly quadrupled in those years, giving rise to a new and optimistic middle class. The Western world, meanwhile, eyed this emerging market darling with great interest. Turkey was on a rapid economic rise and was poised to provide a strategic bridge to markets east and west. And after the 2001 banking crisis forced it to make some deep and painful repairs, Turkey appeared locked into a reform path, reinforced by Ankara’s political decision to formally begin negotiations for EU accession in 2005. The West was slow to recognize, however, that Turkey was also awakening from its post-Cold War slumber. The West was also slow to understand that, under an Islamist-oriented political model, Turkey would be naturally drawn to the chaos that was being created in its Middle Eastern backyard by the United States with the start of the Iraq war. The West’s nostalgic view of a secular and stable NATO ally in an otherwise volatile part of the world was already starting to crack.

    An infographic on the economic crisis in Turkey focus on inflation, debt and foreign exchange reserves.

    Old Habits Die Hard

    To make sense of Erdogan’s virulent resistance to tightening monetary and fiscal policy in the face of crisis, remember one simple fact: He built his political dynasty during an era of heady growth and will remain loath to break from an economic model that has brought him immense success. An economic environment characterized by low interest rates, booming consumption, heavy portfolio inflows and massive, government-backed construction projects gave him the ingredients he needed to build an extensive patronage network. Erdogan worked quickly and craftily to secure his political base, first by building up allegiances in the heartland and by replacing secular elites from key institutions with loyalists. Then, he aggressively neutralized the military’s political clout and eventually sacrificed his former Islamist allies in the Gulen movement.

    The anti-corruption banner that he waved in coming to power gradually gave way to unapologetically blatant displays of nepotism. This was to underscore the perception that political challenges to Erdogan would invite only economic ruin while ardent support would bring riches. As the country’s EU accession bid plummeted in priority and as Erdogan cemented institutional dominance in the country, the Turkish leader was easily able to fend off a broader anti-corruption wave that was sweeping other emerging economies.

    A strategy of fixating on a core base of support to consolidate power while staving off economic correction cycles has served Erdogan well, even against daunting odds. No matter how polarizing Erdogan has become to Turkey’s deeply divided electorate, he has maintained the steadfast support of roughly half of the electorate. The more his electoral margins get shaved down in each cycle, the more resourceful he has to be in maintaining his already strong grip on power. This explains the gamble he took on a 2017 constitutional referendum to empower and extend his tenure as president. It also explains why he is ideologically stuck to the outdated economic model that fueled his political ascent. It is little wonder then that Erdogan replaced market-friendly technocrats in his Cabinet with his inexperienced but ever loyal son-in-law to run the powerful Ministry of Treasury and Finance. For better or for worse, Erdogan is determined to stay on this economic course for as long as he can and does not care to have technocrats get in his way.

    When Erdogan declares war against “evil” interest rates and likens dollars, euros and gold to “bullets, cannonballs and missiles” in a war that aims to take Turkey down, he is channeling a deep-seated paranoia rooted in the 1920 Treaty of Sevres, which dismembered the Ottoman Empire at the hands of Allied powers.

    Fanning the Flames of Nationalism

    When Erdogan declares war against “evil” interest rates and likens dollars, euros and gold to “bullets, cannonballs and missiles” in a war that aims to take Turkey down, he is not entertaining the Western financial community; he is channeling a deep-seated paranoia rooted in the 1920 Treaty of Sevres, which dismembered the Ottoman Empire at the hands of Allied powers. The so-called Sevres syndrome can be channeled in Turkish politics to this day to raise hysteria of outside powers conspiring to kick Turkey while its down in the dust. It can also be used to enforce politically motivated boycotts of foreign goods. Many educated Turks who despise Erdogan but are bombarded with propaganda of Turkey coming under economic attack are rationally trying to sell lira and secure more stable assets, but they are also seriously questioning whether their country is coming under siege by foreign powers. U.S. President Donald Trump’s attempt to fan Turkey’s economic flames through a tariff-loaded tweet last week only compounded those suspicions.

    Trump is also unintentionally boosting Erdogan’s political credibility at home. Erdogan has already crossed the big referendum-and-election hurdle to secure the presidency for at least the next five years and potentially the next decade. In the short term, though, he has to worry about municipal elections next year. Pro-government pundits say they are getting signals that Erdogan may move up the local elections by six months, to Nov. 4 this year. The reasoning would be that stronger economic headwinds are coming anyway, and Erdogan may as well take advantage of the political solidarity he can reap from his nationalist battle cries against enemy speculators. This is a rumor that I would take seriously. It would also imply that any serious structural reform would only have a chance of coming after the election while Turkey tries to ride out the storm in the near term.

    An Unforgiving Geopolitical Climate

    The geopolitical frictions surrounding Turkey are bound to only exacerbate the country’s economic crisis in the coming months. The U.S.-Turkey diplomatic standoff, driven by Trump’s attempt to curry favor with American evangelicals by pushing for the release of pastor Andrew Brunson, is a piece of shrapnel in the minefield of U.S.-Turkey relations. After framing Brunson for colluding with the same Islamist movement led by Fethullah Gulen that tried and failed to overthrow Erdogan in a coup, Ankara will treat any diplomatic concession involving Brunson as a compromise of its national security and will exact a significant price for his release. This explains Erdogan’s arguably unrealistic attempt to equate Brunson with Gulen in a negotiated exchange and the current diplomatic logjam.

    Beyond Brunson and Gulen, Turkey is biding its time for the United States to extricate itself from its Middle Eastern backyard. In Syria, Turkey has been adamantly opposed to U.S. support for Kurdish fighters in the Syrian Democratic Forces (SDF), but it can also see the endgame to the civil war approaching and will maintain a strong foothold in the country to ensure that Kurdish cantons in northern Syria remain divided and politically neutralized well beyond the United States’ stay in the region. In the meantime, U.S. support for the SDF and Turkey’s imperative to divide and weaken the Kurds in Syria will remain a significant friction point.

    Turkey is also expected to be one of the biggest violators of Iran sanctions in the coming months as the United States prepares to snap back hard-hitting energy penalties in November. Turkey depends on foreign imports for nearly all its energy needs, and Iran is a significant supplier of its oil and natural gas. Even today, Ankara is trying to negotiate a lesser punishment for the state-run Halkbank, the main Turkish bank involved in violating Iran sanctions under the previous U.S. administration. Though it will take time for U.S. investigations and cases against Turkey to build in the current sanctions wave, the looming threat of secondary U.S. sanctions will add another external stressor on the country’s banking sector in trying economic times.

    In Search of New Allies

    Turkey’s search for economic assistance will be a fascinating prism into the balancing act of a strategic middle power caught in the throes of great power competition. The United States is facing rising competition from China and Russia, which are also seeking out like-minded partners to challenge the U.S.-led order. Turkey will maintain a foothold in the West and is not about to walk away from a critical strategic alliance such as NATO. But it is also trying to balance between these Eastern and Western poles, so it will be focusing on building up its strategic ties with China while carefully managing its relationship with old geopolitical foes such as Russia. In the case of the latter, this will involve Turkey maintaining heavy energy ties and building defense cooperation with Russia despite U.S. congressional attempts to coerce Turkey into cutting those ties.

    In a time of financial need, economically embattled states under the siege of U.S. sanctions, such as Russia and Iran, are obviously not going to be Turkey’s safety net. And it will also be loath to return hat in hand to the IMF — something that a technocrat like Argentine President Mauricio Macri may be able to stomach at heavy political cost, but not an ultranationalist like Erdogan. China, however, has the financial capacity to extend sizable loans to countries that hold strategic value, as can be seen in Beijing’s extraordinary financial patience with Venezuela and the imminent likelihood of it — instead of the IMF — extending a $10 billion loan to Pakistan. Similarly, China may see a strategic interest in building ties to a state, such as Turkey, that has critical connections to the Belt and Road Initiative, that is pivotal to both United States and Russian foreign policy, and whose cooperation Beijing needs to limit state backing for Turkic militants operating in Syria and in China’s own Uighur borderland. Beyond China, Turkey may also look to the Gulf powers of Qatar and Kuwait for assistance.

    Turkey’s political defiance in the face of textbook economic challenges will never cease to shock and awe financial investors expecting countries to pursue the maximum economic benefit. But Turkey’s economy cannot be understood in a vacuum. Erdogan is merely the contemporary lead in a centuries-old tale of geopolitical intrigue. Protecting a political dynasty in the throes of East-West competition requires a different playbook altogether.

  • Erdogan’s Ottomania….   M. Hakan Yavuz

    Erdogan’s Ottomania…. M. Hakan Yavuz

    M. Hakan Yavuz

    The Blue Mosque in Istanbul, built in the early 1600s to assert Ottoman power.

    Turkey is entering a new era. Following a failed military coup against President Recep Tayyip Erdoğan in 2016, a referendum last April approved sweeping constitutional amendments amidst a government-declared state of emergency and allegations of electoral misconduct. The changes call for a super-executive presidency without robust checks and balances. And as a result of June’s presidential elections, not only is the government being reorganized under Erdoğan’s authoritarian leadership, but Turkish society is being recreated in his vision of the Ottoman past.

    If there is a master key to the code of the New Turkey, it is a reimagined Ottoman-Islamic identity.

    In speech after speech, Erdoğan has called Turkey’s identity essentially Ottoman (Osmanlılık). The premise has policy implications both at home and abroad. It is supposed to follow that Turkey has a right, if not a duty, to defend the rights of Muslims in former Ottoman territories. It was Erdoğan who supported the independence of Albanian Muslims in the Republic of Kosovo, telling a cheering crowd in the capital of Priština that “Turkey is Kosovo and Kosovo is Turkey.” His language is similar when it comes to the Palestinians: they, too, are claimed as Ottoman Muslims. If there is a master key to this code of the New Turkey, it is a reimagined Ottoman-Islamic identity—one pioneered by Turgut Özal in the 1980s as prime minister and then president, and now reconstituted for the twenty-first-century by Erdoğan and his fellow Justice and Development Party (AKP) member Ahmet Davutoğlu.

    The Ottoman Empire dissolved in 1922. It was superseded by the Republic of Turkey, whose first president, Mustafa Kemal, embarked on a sweeping program of secular, westernizing reforms—a period known as the Atatürk era. The Ottoman Caliphate was abolished, Islamic canon law was replaced with a secular civil code, and women were granted full political rights.

    What does Ottomanism signify nearly a century later? There is no easy answer. A number of terms proliferate in both popular and intellectual culture, each with a distinct valence—from “Ottomanism,” “Republican Ottomanism,” and “neo-Ottomanism” to the more colorful “Ottomania” and “Ottoman-philia.” The words crystallize different uses of the past and different aspirations for the future.

    As a historical term, Ottomanism refers to a nineteenth-century project of the Ottoman bureaucracy, inaugurated by the Tanzimat Reforms of 1839. These proto-Kemalist policies responded to divisive nationalist movements in the Balkans by articulating a supra-religious and supra-ethnic Ottoman identity that could serve as the foundation of a unified, westernized state. Loyalty to the sultan was replaced by loyalty to the Ottoman fatherland (vatan), but Islam played a more central role than it did under Kemal’s Republic.

    In contemporary Turkey, Ottomanism has departed from this historical label to symbolize much else—from justice, power, and pluralism to Islamic primacy and Turkey’s own campaign to make the country “great again.” Political scientist Ioannis Grigoriadis distinguishes two broad ideological formations: “nostalgia for Ottoman grandeur, territorial expansionism and attempts to reintroduce Islam into Turkish politics” and a more Tanzimat-inspired “liberal political ideology which advocated a civic understanding of Ottoman national identity, embracing all Ottoman subjects regardless of religious and ethnic affiliation.” Meanwhile, for the forty-five states that the Ottoman Empire once ruled, Ottomanism connotes oppression, brutality, conquest, Islamic hegemony, and a pervasive source of economic and political backwardness.

    To Turkey’s conservative Muslims, Ottomanism offers the semiotic allure of glory, power, and victory.

    It is telling that in Turkey, and to some extent in Bosnia and Kosovo, the Ottoman Empire is now looked back upon with nostalgia. These appeals to a bygone era are not merely ideological and political: there is more at stake than ideas and arguments, policies and party lines. They have come to function as social imaginaries—what sociologist John Thompson defines as “the creative and symbolic dimension of the social world . . . through which human beings create their ways of living together and their ways of representing their collective life.” In other words, they have formed the “background of an intersubjectively shared lifeworld”—a cohesive bond knitting Turkish communities together, especially conservative and religious ones. To Turkey’s conservative Muslims, Ottomanism offers the semiotic allure of glory, power, and victory—a social identity that confers integrity, respect, and self-esteem, dispels the feelings of inferiority and marginalization that animate a pervasive siege mentality, and validates Turkey’s place in global politics. It finds expression in all aspects of life, from fine arts, popular television series, books, and magazines, to cuisine, music, public events and rallies, and even furniture.

    Islam—both as a religion and as a foundational civilization—lies at the center of this identity. Some might argue that the new Ottomanism came of age with the rise of political Islam; indeed it is difficult to see precisely where Ottomanism begins and Islamism ends. As far as a new conservative bourgeois class and ascendant pro-Erdoğan journalists and public intellectuals are concerned, at least, appeals to the Ottoman identity are more welcome than those to the Golden Age of Islam.

    This Ottoman imaginary represents an unprecedented restructuring of the country since 1922. It embodies a new political legitimacy that plumbs the depths of identity desires in ways apparently not fulfilled by the modernizing Kemalist project. Indeed some conservative intellectuals blame the country’s current identity crisis on the secularizing reforms instituted at the founding of the Republic. And after the 1980 military coup, the “Turkish-Islamic Synthesis” emerged as an antidote to the growing appeal of socialism and to Kurdish secessionist claims.

    The Ottoman past has thus become the foundation upon which to build a future once viewed as so far gone that it was impossible to reinvigorate. But exactly what sort of future worth building is a matter of contention, and the country’s current political struggle reflects a deeper conflict between two competing neo-Ottoman imaginaries. On the one hand, there is the Özal variety, which is cosmopolitan, pro-European, and religiously pluralist, even while it recognizes a special role for Islam in society. By contrast, the increasingly dominant vision of Erdoğan and Davutoğlu is exclusivist, anti-Western, and Islamist in both a political and social sense.

    The new discourses of Ottomanism have coincided with a sweeping range of social and economic developments that have left no corner of Turkey untouched. Since the mid-1980s, when Özal became prime minister, this resurgent Ottomanism has fueled Turkey’s conservative transformation.

    Özal oversaw Turkey’s move from an import-substitute economy to an export-oriented, private market model. His neoliberal policies gave birth to a conservative Muslim bourgeoisie, which, in turn, has played a critical role in the latter-day Ottomanization of Turkish identity. Turkey became better positioned to compete in the global market, and the role of a state-run economy gradually declined. The ideals of a free market, private enterprise, and enlightened civil society generated many opportunities for Turkish communities, and improving economic conditions incentivized a foreign policy oriented toward the broader international community.

    The return of the repressed Ottoman identity has emboldened leaders to restore Islam to the public domain.

    Özal’s term as president, from 1989 to 1993, coincided with a cascading series of international events that triggered and rejuvenated suppressed memories of similar conditions in the late Ottoman era. Besides the deportation of Muslims from Bulgaria in the late 1980s, there was the accelerating collapse of the Soviet Union, the disintegration of Yugoslavia, the systematic campaign of genocide against the Bosnian Muslims, the Armenian occupation of the Karabakh region (from which a million Azerbaijani Turks were deported), and the first Gulf War. Neo-Ottomanism, as a new domestic and foreign policy orientation, emerged under these conditions. The return of the repressed Ottoman identity emboldened leaders to target the secularizing reforms of the Republic and restore Islamic identity to the public domain.

    Turkey’s slow but steady process of Islamization was thus underway during the Özal administration. Yet his understanding of Ottomanism was simultaneously multicultural, pro-European, and Islamic. In Turkey in Europe and Europe in Turkey (1991), he sought to prove that Turkey belongs to Europe by way of the Ottoman legacy, rejecting American political scientist Samuel P. Huntington’s conclusion in “The Clash of Civilizations” that the Islamic world and the West are mutually exclusive and therefore engaged in inevitable conflict. The Kurdish question was Özal’s major concern, and he had hoped to resolve the issue by incorporating the Ottoman model of pluralism and recognition of cultural rights.

    For Özal, neo-Ottomanism performs several functions. It provides a justification for recognizing Kurdish identity claims and decentralizing the country. It opens new spaces for Islamic practices and networks to enhance national and transnational civil society by recognizing Islam as a cultural core of Turkish identity and community building. It cultivates a cultural network to expand Turkey’s market in the Balkans, Caucasus, and the Middle East. It develops closer ties with Muslim minorities in former Ottoman provinces, especially with Bosnians, Albanians, and Kurds in Iraq. And it demonstrates that the Ottoman Empire was a southeast European state, giving Özal justification to reclaim Turkey’s European roots and what it sees as its rightful claim to European Union membership.

    Erdoğan and former Prime Minister Ahmet Davutoğlu have reconstituted Ottomanism in a very different direction, looking back to history before the Kemalist regime. They refer to the whole of Ottoman history and its civilizational record, which is deeply intertwined with Islam. And as the doors of the European Union have closed on Turkey in recent years, they have reformulated Ottomanism as an anti-Western position.

    Davutoğlu is the prolific ideologue. In his many publications, especially Strategic Depth (2001), he develops a reverse Orientalism by ignoring cross-fertilizations of civilizations and religions. His Islamic civilization is shielded by faith and fashioned against the West, embracing the Huntington thesis. Eliding important differences, he equates the nineteenth-century Ottomanism of the Tanzimat era with Özal’s neo-Ottomanism, by virtue of the following historical parallels:

    (a) the state was restructured according to the needs of the international system; (b) in both cases, the state reconstituted a new identity and a shared culture [Ottomanism] to cope with the secessionist and nationalist challenges; (c) in this search for new political culture, the Ottoman bureaucrats and Özal tried hard to reconcile Western and traditional [Islamic] values; (d) during the Tanzimat period the state tried to join the Congress of Vienna system, which was formed in 1815, and then after the Cold War and the collapse of the Soviet Union, Özal attempted to integrate Turkey into the European Union system; (e) both the Ottoman Empire, which tried to develop a close alliance with Great Britain, and which became the hegemon of the international system created by the Congress of Vienna; and Turkey has sought to ally with the U.S., which is the hegemon of the international systemic order after the Cold War.

    To Davutoğlu, westernization destroys the Ottoman state, eroding its religious legitimacy and creating a society with a weakened historical consciousness and uprooted identity. In fact, Davutoğlu is more pan-Islamist than Ottomanist: his vision of the Ottoman is essentially an Islamic polity defined in opposition to the West.

    The Ottomanism promoted by Erdoğan and Davutoğlu thus comprises six defining features. It pits East against the West. It places Islam at the core of the Ottoman identity, civilization, and polity. It looks back to Kadim, an ancient civilization based on sacred teachings. Though it is pluralist and recognizes other major Abrahamic religions, it views Islam as their foundation. It includes the Turks but cannot be reduced to the Turks exclusively, for it embraces a sense of responsibility toward Muslims of former Ottoman territories, especially toward the Palestinians. And it embraces Muslim hegemony and geopolitical power. A small, influential corps of public intellectuals vigorously defend this vision of the Ottoman as the last empire undergirded by diverse sacred religions and safeguarded by Islam, one that serves as a cradle uniting Bosniaks, Arabs, Albanians, Macedonians, Torbeši, and Gorani. It functions as an Islamic melting pot by recognizing the authenticity of other religions and transcending ethnic identities.

    As Turkey has grown more economically prosperous, Ottomanism has reverberated in ever-louder tones in every nook and cranny of Turkish society.

    Pro-Erdoğan intellectuals thus embrace Ahmet Mithat Efendi’s claim that “the Ottoman had a sacral meaning” (Osmanlı bir mana-ı mukaddesmiş). Mithat Efendi was the most important Turkish intellectual and journalist of the late nineteenth century, who translated Tolstoy and Pushkin to Ottoman Turkish. Islam, as understood by these contemporary Ottomanists, is the defining feature of the formation of Pax Ottomanica, which allows for the two other Abrahamic religions, Judaism and Christianity, of which it was the legitimate protector. For these Ottomanists, inspired by the writings of Necip Fazıl Kısakürek, the bond between Islam and the Ottoman state was erased with the Tanzimat Reforms, which severed Ottomanism from its sacred roots. Yet, despite the westernizing reforms of the state, these conservative neo-Ottomanists believe that the Ottoman spirit is innate in the Turkish-Muslim soul and that such a soul only can be resurrected with the revival of Islam. They insist that the Ottoman spirit is the most deep-rooted identity in every layer of Turkish culture and psyche, and they consider their compatriots and coreligionists as both Ottomans and Turks. They redefine Turkishness as a religio-historic identity, as opposed to an ethnic one.

    These neo-Ottomanists are also expansionist. For them Anatolia is not the fatherland of the Turks but a place of retreat during World War I. The Islamic homeland—vatan—signifies a diaspora far greater than Turkey’s geographical boundaries, encompassing those lands yearning to return to the Ottoman.

    As Turkey has grown more economically prosperous, Ottomanism has reverberated in ever-louder tones in every nook and cranny of Turkish society. The country’s cultural, political, and social spaces increasingly grapple with the legacy of a bygone era. Yet this uniquely Turkish form of nostalgia requires a more nuanced analysis than a mere critique of mass culture. The Ottomanism of Erdoğan justifies his sultanesque autocratic system of governance and seeks to Islamicize both state and society. It has become at once a political, cultural, and intellectual expression for a conservative elite that seeks to consolidate power.

    As new generations in Turkey seek a set of moral and political principles from their supposedly perfect and wiser ancestors, they have been susceptible to imaginaries that not only simplify the complex and sometimes shameful past but also smooth away inconvenient contradictions. Now, as the country enters a new era, it is imperative to recognize how Erdoğan has instrumentalized the Ottoman past for authoritarian ends.

  • California Parole Board Denies Parole for Armenian Terrorist Hampig “Harry” Sassounian

    California Parole Board Denies Parole for Armenian Terrorist Hampig “Harry” Sassounian

    Community Information Service
    June 30, 2018 | #1088

    California Parole Board Denies Parole for
    Armenian Terrorist Hampig “Harry” Sassounian

    On June 29, 2018, the California Department of Corrections Parole Board denied Hampig “Harry” Sassounian’s release on parole. This was Sassounian’s fifth parole denial in twelve years. Sassounian will not be eligible for parole suitability hearing until June 2021.

    Sassounian, Inmate C88440, was convicted of first degree murder and sentenced to life imprisonment for the heinous assassination of Turkish Consul General Kemal Arikan on January 28, 1982, as Mr. Arikan was in his car waiting at a traffic signal. Sassounian shot Mr. Arikan 14 times in the chest and head. Armenian terrorist organization JCAG claimed responsibility. Sassounian entered prison on June 29, 1984. Sassounian’s previous parole requests had been denied because of his violent extremism in advocating the Armenian allegation of genocide, which poses a public safety risk.

    In late May 2018, the ATAA launched an online petition and started social media alerts against Sassounian’s parole, to prevent the obstruction of justice  and to support efforts by the Turkish American community and Turkish American organizations nationwide.  The action alerts and online campaigns prompted thousands of Turkish Americans and friends of Turkey to call on the California Department of Corrections Parole Board to deny Sassounian’s release.

    ATAA thanks the Turkish American community, Turkish and Turkic American organizations, including Association of Turkish Americans of Southern California ATA-SC and many others for their tremendous efforts resulted in the denial of the parole of terrorist Hamping Sassounian.
  • Turkey’s Elections Give Erdogan Even More Control

    Turkey’s Elections Give Erdogan Even More Control

    In this photograph, Turks celebrate with a poster of President Recep Tayyip Erdogan outside his party headquarters in Istanbul on June 24, 2018.
    (ARIS MESSINIS/AFP/Getty Images)
    Highlights
    • President Recep Tayyip Erdogan and his Justice and Development Party (AKP) will use a clear popular mandate and constitutional amendments that expand presidential power to broaden Turkey’s regional and global reach.
    • Abroad, the AKP will pursue a security-focused agenda buoyed by the electoral victories of hyper-nationalists.
    • The party will maintain its hard-line Kurdish policy, undermine its rivals in the Gulen movement and assert Turkey’s influence throughout the Middle East.
    • Just as the AKP-led government has struggled to stabilize the country’s currency and invite sustainable foreign investment in the past, external factors will continue to stymie the government’s ability to manage the economy.

    The Turkish High Electoral Board has yet to issue the official results, but the June 24 national elections for all intents and purposes are over, and incumbent Recep Tayyip Erdogan has secured another five-year term as president. With his victory, Erdogan can remain president for an additional two terms, until 2028. And he may even follow Russian President Vladimir Putin’s model and swap in a loyalist for a single presidential term before running again in 2033 or beyond.

    The Big Picture

    In Stratfor’s 2018 Second-Quarter Forecast, we noted that the Turkish government might call for early elections in order to prevent worsening economic strain from turning the electorate against the government and to capitalize on the popularity of military campaigns against Kurdish extremists. With the elections over, Turkey’s new presidential system is now in full force, leaving President Recep Tayyip Erdogan and his Justice and Development Party in a stronger position to carry out their agenda, which will include more military campaigns and rising friction with European and NATO allies.

    The major takeaway of this election is that Erdogan is now in possession of extremely expanded presidential powers. During his time in office, he has engineered constitutional amendments to give him one of the most powerful presidencies in modern Turkish history. And though in theory there are still some internal checks on his power, in practice little can be done to block his agenda and that of his ruling Justice and Development Party (AKP). Among other things, Erdogan now has the power to rule by decree, appoint Cabinet members, write Turkey’s budget and appoint judges — all without parliamentary approval. Moreover, the opposition cannot mobilize either the necessary 360 legislative votes needed to investigate Erdogan’s presidency or the 400 votes needed to try him in the country’s highest court.

    But there are still a few checks on his power: He cannot call new elections without the support of three-fifths of parliament (or 360 legislators), and the parliament is still in charge of approving the president’s budget and his continued use of emergency powers. Now that they have an election victory under their belt, Erdogan and the AKP have hinted that they will relax the current state-of-emergency rule. Though this will please the opposition, the ruling government could easily reimpose it.

    The Current Political Scene

    Internally, opposition politicians and activists will remain suspicious of the AKP’s control of the media and security sectors and its ability to use them to ensure political victories. Despite a remarkably united political opposition and a strategy of trying to prompt a runoff by preventing the president from winning 50 percent of the votes, the anti-Erdogan camp was unable to gain enough momentum to unseat the president. A very high turnout (87 percent) tipped the balance in favor of AKP loyalists, and Erdogan secured a clear first-round victory with 52.38 percent of the vote according to unofficial tallies.

    In parliament, Erdogan’s AKP saw its hold weaken slightly; it ended up with 295 seats — six less than the 301-seat majority it needs to govern by itself. That means that it must now rely on a coalition with its allies in the hyper-nationalist Nationalist Movement Party (MHP) to carry out its legislative agenda. The MHP performed particularly well in the election, winning 49 seats and indicating that many Turks are still very much in favor of a nationalist government. That result, in turn, means that the AKP-MHP alliance has staying power. And it also means that the MHP is in the distinct position to influence parliament.

    What Next

    The appeal of the MHP — as well as the emergence of a new nationalist party in parliament, the Iyi or Good Party — indicates that Turkey will only continue to strengthen its nationalist policy at home and abroad. Part of Erdogan’s continued appeal to Turks is his patriarchal and security-focused message, and the government will now be sure to ramp up its battle against Kurdish militancy (and other types of extremism) in Turkey, Syria and Iraq. Though the Kurdish Peoples’ Democratic Party (HDP) managed to work its way into parliament — a reflection of the AKP’s weakening support among Kurds — Erdogan’s new powers and his powerful nationalist support base in parliament largely negate this victory on a practical level.

    The Erdogan and AKP victories also give the ruling party the political capacity to further undermine the Gulen religious movement abroad. Once AKP allies, the Gulenists are now its rivals, and Erdogan sees their global network of influence as a potent threat to his power. He has already begun setting up rival outfits, partially through the state-run Directorate of Religious Affairs, or Diyanet, which was once a fiefdom of the Gulenists. With more opportunity to further these endeavors, Erdogan can better position Turkey as a leader of the Sunni world.

    Persistent Economic Problems

    Though the election put the AKP in a better political position domestically, it by no means solved every problem facing the party. After all, not even the amended constitution can fix many of the country’s larger economic challenges. Indeed, the formalization of Erdogan’s top-heavy rule will put a strain on Ankara’s relationship with external allies and partners — particularly those in Europe, Turkey’s most important export destination and source of investment. Already almost entirely in control of his country’s media and security landscape, Erdogan will be subject to even less oversight than he was before. And he has the power to make unilateral policies, even if they overstep the human rights norms that Europe values.

    Still, even if it encounters some increased tension with Europe, the Turkish government will remain focused on courting further investment (using the lira whenever possible) to try to stabilize its economy. Its low currency value and high inflation rates are top economic concerns for the government to manage. And officials, such as the head of Turkey’s central bank, will have to find a way to address these issues while managing Erdogan’s disinterest in increasing interest rates.

    An AKP-led government with Erdogan at the helm has become deeply familiar to Turks over the past 16 years, since the party’s first parliamentary victory in 2002. The latest win maintains the status quo, but that isn’t necessarily a good thing for Turkey’s economic situation.