Sunday, 16 August 2015

Erdoğan Doubles Down With Another Electoral Gamble

Turkish President Tayyip Erdoğan reminds me of desperate gamblers who have lost their original stake and now are putting everything they have -- the kids' college funds, the rent, family shopping money -- into one more spin of the wheel, one more roll of the dice in hopes of recouping all their losses.

Not satisfied with the results of the June 7 where his ruling Justice and Development Party (AKP) lost sole control of government he has spent the intervening two months maneuvering to force another election – an election where voters will be sharply encouraged to correct the errors of their ways.

Half-hearted talks about a coalition government with the main opposition Republican Peoples’ Party (CHP) broke down last week, and the only question now is who will run the country until elections in November.

These elections are a huge gamble for Erdoğan, and an even bigger gamble for the country as a whole. But this is a gamble he has to take if he ever wants to realize his dream of a strong, unfettered presidency. The stakes could not be higher. He has already said the he is a de facto strong president and that a new constitution would merely ratify this new reality. Others differ -- strongly. Yes, the AKP may pick up enough additional MPs to form a single party government and reinforce his authoritarian rule. But, just as easily, the plan could back-fire badly and leave the AKP with even fewer MPs. This would create the scenario for another attempt at a coalition government with a partner who would force the president to operate within the tightly limited restrictions of the present constitution.
Not accepting a coalition, he rolls the dice on another election
It is not at all clear just what Erdoğan would do if he fails a second time to get his required majority. It is difficult to see him going quietly into the night. Therefore, he cannot afford to leave the campaign to his handpicked, low key prime minister, Ahmet Davutoğlu. He will play a dominant role in the campaign, circumventing constitutional restrictions by appearing at ‘opening ceremonies’ from one end of the country to other. This tactic is also a gamble because post-election polls in June showed that his polarizing personality alienated a large number of voters. Furthermore, voters might just hold him responsible for the collapse of coalition talks and dragging the country through more uncertainty.

He is also gambling with critical issues like the economy that will drift aimlessly as the president and the ruling party focus exclusively on the election in a fight for their political lives. The possibility of at least three more months of political instability has already driven the Turkish Lira to record lows against the US dollar. Turks have developed extremely sensitive antennae for political troubles and react at warp speed by buying foreign currency at the first sign of instability. Retailers and other merchants report that business is stagnant at best as people conserve their cash and while waiting for further developments.

For Erdoğan this will be a one-issue campaign – national security. He will never forgive the Kurdish-based People’s Democratic Party (HDP) for winning enough votes to drive the ruling party below the number of MPs required for a single-party government. In the June elections HDP won 13% of the vote and sent 80 members to parliament, 80 members that used routinely to go to AKP. The charismatic leader of the HDP also committed the unforgiveable sin of proclaiming loudly that his party would never make Erdoğan the strong president he so strongly covets.
Can the HDP repeat its June electoral success?
Therefore Erdoğan is doing everything in his power to win additional nationalist votes by attempting to tie HDP to the outlawed Kurdish guerrilla group, the PKK. If he is going to win he must eliminate the HDP members of parliament by driving HDP votes in any new election below the barrier of 10% of total votes cast required for sending MPs to parliament. The other strategy would be to ban the party altogether on the very tenuous grounds of its alleged links to the PKK. Both of these strategies, however, promise to re-kindle tensions that many Turks had hoped were long buried.

It is no coincidence that the level of violence in Turkey has picked up dramatically since the election with almost daily clashes between government security forces and an eclectic group of terrorists. The deadly bombing in the town of Suruç was blamed on the barbarians from ISIS, a bizarre group of anarchists was blamed for the hapless attack with a few shots fired at the fortress-like American consulate in Istanbul, and then the PKK has stepped up its attacks against police and the army. 

The PKK, for its part, is playing right into Erdoğan’s hands with the revival of its militant tactics that caused so much bloodshed over the years. The head of the Kurdish-based political party HDP, Selahattin Demirtaş, must be tearing his hair in despair. Just as the Kurds had achieved their long-desired political break through with strong parliamentary representation the guerrilla group threatens to undo all those gains with its renewed violence.

Even with the renewed violence, a number of pieces have to fall into place for Erdoğan’s gamble to pay off.

1.      Closing the HDP  - ironically this has been made more difficult by changes instituted by Erdoğan’s own political party. The closure could happen, but it would be difficult. Would infuriate a significant portion of the Turkish population.
2.      Drive HDP votes below the 10% threshold. Very difficult. Hard to see the Kurds switching their votes back to the AKP. HDP might get less than 13%, but will still pass the 10% threshold.
3.      Attract more nationalist votes to AKP – Possible. Votes lost to the nationalist MHP party could swing back to the AKP.
4.      Reduce the number of non-Kurds voting for the HDP – Very difficult. These voters dislike Erdoğan intensely and will vote for anyone who promises to derail his ambitions.
5.      AKP must remain united behind Erdoğan – This is not a given. There are a significant number of original AKP members unhappy with Erdoğan’s increasingly autocratic tendencies. It’s not at all clear how this faction will vote. Also not clear if former President Abdullah Gül will finally get off the fence and openly declare his opposition to Erdoğan. So far he seems to prefer issuing vague pronouncements while seated firmly on the fence ready to go in any direction.

My prediction is that unless HDP is shut down the election results will not differ very much from June. Even if AKP scrapes in with just enough votes to form a single-party government it will not have enough MPs to change the constitution the way Erdoğan wants. Meanwhile the economy will stutter along and internal security threats will raise their ugly head again. It’s one thing to gamble with one’s own political life. It’s quite another to include the entire country in that throw of the dice.

Tuesday, 28 July 2015

What Caused Turkey's Sharp Reversal On The Fight Against ISIS?

It would be nice to think that Turkey’s abrupt about-face on joining the war against ISIS was solely the result of President Tayyip Erdoğan’s long-delayed and agonized conclusion that the barbaric Sunni Islamic terrorist group was a threat to Turkey as well as Iraq and Syria. Alas, things in Turkey are never that simple or straight-forward.

            Ever since ISIS appeared on the scene Erdoğan has been reluctant to commit his massive armed forces to stopping ISIS or allowing American fighters to use the large Incirlik air base in southern Turkey. His refusal to help the beleaguered town of Kobani last winter sent a message to the Kurds that he preferred ISIS to Kurdish control of northern Syria.

            What happened to change his mind? Why did he suddenly see the light? Now, about six months after the successful Kurdish and American defence of Kobani, the proximate cause for his change of heart was the July 20 suicide bombing in the Turkish town of Suruç where at least 31 people – most of them Turkish Kurds -- were killed. The bombing was attributed to ISIS and finally caused Turkish policy makers to get off the fence and join the fight. So goes the Turkish government narrative.

            The reality is a bit more complicated. It is not lost on many people in Turkey that this change of heart coincides with a nasty bit of domestic politics. Erdoğan and the AKP suffered a major set-back in the June 7 parliamentary elections. AKP, thanks in large part to the predominantly Kurdish People’s Democratic Party (HDP) that polled far better than anyone suspected, failed to secure enough votes to form a government by itself for the first time since 2002. This dealt a severe blow to Erdoğan’s dream of changing the constitution to make the presidency a strong, unchecked, unchallenged position. Any coalition resulting from the elections would never allow that development.

This is unacceptable to Erdoğan. Few people doubt that he now spends more time plotting an early election this fall than working to form a strong coalition government. In order to get better results for the AKP he has do something to reduce the votes for the HDP that, in addition to the Kurds, is also supported by much of what is left of the Turkish liberal intelligentsia.

            Bear with me while we do a little election math here. In order for any single party in Turkey to form a government it must win at least 276 of the 550 seats in parliament. AKP easily accomplished this in every election from 2002 – 2015. This year, however, a new party (HDP) entered the elections and had a real chance to win at least 10% of the total vote, a requirement to send any MPs to parliament. HDP surprised everyone by winning more than 13% of the vote and sending 80 MPs to parliament, thus depriving AKP of its controlling majority as it won only 258 MPs. This was a very unpleasant surprise for Erdoğan who was now faced with the real possibility that a coalition government would restrict his powers. Worse, such a coalition government could even start seriously investigating corruption charges against former ministers and Erdoğan’s friends and family.
The Kurdish-based HDP won a solid hold on the southeast and east parts of Turkey
            Ever since the election Erdoğan and his anointed successor as prime minister, Ahmet Davutoğlu, have dragged their feet on forming a coalition government. Erdoğan at least would much prefer to take his chances on a second election this fall in hopes that AKP would get more than 276 MPs.
            The only real way for this scenario to work would be to somehow drive HDP below the 10% threshold and for AKP to reclaim those 80 MPs. There were a total of just over 46 million votes cast in the June election, and HDP won more than six million of those votes. Driving HDP under the 10% barrier would require a swing of almost two million votes away from HDP. It’s difficult to see any of the Kurdish voters changing their votes, and I don’t believe any of the liberals who voted for HDP would suddenly recant and send their votes elsewhere.
Who are the main opponents of the large Turkish army?
            Erdoğan’s only alternative is to play the Turkish nationalist card and accuse the HDP of being nothing more than a front for the Kurdish guerrilla group the PKK. This entails ripping up his loudly publicized ‘peace process’ with the same PKK. Between now and November he would hope to drive home the image of AKP as the only hope for stability and peace by associating HDP with instability and terrorist violence.

            By suddenly agreeing to work with the Americans against ISIS Erdoğan also opens the door for renewed Turkish air attacks against Kurds in northern Iraq and Syria – all in the name of preventing the spread of allegedly Kurdish-inspired terrorism to Turkey. It’s almost as if he is saying, “I told you so. This is what voting for the HDP gets you.” In addition to the guilt by association strategy, there are growing calls from Erdoğan loyalists and ultra-nationalists who loathe the Kurds to ban HDP altogether.

            But will this transparent strategy achieve its goal? This is a very risky policy because it is not even clear that the AKP could hold onto the votes it won in June let alone increase them. And, unless HDP is banned, it is difficult to see its solid hold on the southeast weakening. Furthermore, there are threats of serious cracks within the AKP as some of the founders of the party strongly disagree with what has happened to their party under Erdoğan’s autocratic rule. Meanwhile the inconclusive, insincere coalition dance continues as the country faces another several months of instability in the run-up to yet another election.

Tuesday, 30 June 2015

The Greek Crisis Has Some Dreaming Of Independence -- From Athens

The only funny thing about the sad situation in which Greece finds itself is reading essays about what the Greek people ‘must’ or ‘must not’ do from renowned economists and leading academics writing comfortably from their offices thousands of miles from the turmoil. They are not the ones lurching from crisis to crisis worrying about when the money runs out, when the pharmaceuticals run out, when their pensions run out, or even if the food runs out.

Even Nobel Prize-winning economists like Paul Krugman urge the Greek people to rejectthe latest proposal from the creditors and risk leaving the Euro and returningto the drachma. Surely, he opines, this would be better than submitting to the even greater ‘austerity’ required by the creditors. Greece would be free of the creditors’ shackles and resume growth quickly. Nothing demonstrates the dangers of long-range analysis better than this.

In a perfect world Krugman might be right. If, and it is an enormous ‘if’ Greece had a smoothly functioning bureaucracy, a government determined to institute sweeping reforms, a political class not wedded to corruption and cronyism, and no deeply entrenched groups from  protected business interests to pampered public service employees with a strong interest in preserving the dysfunctional status quo such a recipe might work. But, alas, we are dealing with the reality of modern Greece and not some theoretical classroom exercise. And that sad reality is that without those sweeping reforms what remains of the Greek economy, regardless of the currency in use, will most certainly contract further.

Syriza could have been an agent of change. It could have instituted long-overdue reforms and, in the process, generated the revenue to improve the welfare of the people. Instead, it has proven to be nothing more than an extension, a particularly incompetent extension, of the failed political system that has decimated Greece over the last several decades. And the sad thing is if it had committed to these reforms it could have minimized the hated ‘austerity’. And the really sad thing is that the price of this intransigence is being borne by the very people Syriza said it wanted to help – the poorest sectors of the Greek population.

It chose instead to implement its school-boy theories, which by the way have not worked anywhere in the world, and substitute revolutionary rhetoric for real achievement. In the process their hypocrisy and deceit have succeeded only in alienating just about everyone who was in position to help. It would have been interesting to see, for example, if the creditors would have taken a softer tone if the government had moved aggressively on revenue producing reforms like privatization or breaking the stranglehold of protected businesses. But all we heard were thunderous pronouncements against such steps. One could almost hear the Euro Group, the IMF and the IMF pleading with Syriza to ‘give us something to work with.’ But the only thing that emerged were half-baked demands for debt reduction. Fine, but in return for what – precisely? I can imagine Christine Lagarde, managing director of the IMF, asking the Greek government what it would do to help itself.

One can argue that the European institutions made a serious error a few years ago by bailing out the private banks that had recklessly loaned massive amounts to Greece. How often should tax payers be required to rescue private banks that should have known better? When do they these banks have to pay the price for their mistakes? Wouldn’t it have been much better to force those foolish banks to take the necessary hair-cut to reduce Greek debt to manageable levels? The problem was only compounded when public institutions assumed that debt. All this may be true. But, as The FinancialTimes Martin Wolf puts it, those are now ‘sunk costs’ and it is time to move on.

Meanwhile the drama is played out on the streets of Greece as most economic activity grinds to a halt pending the outcome of Sunday’s so-called referendum called by Prime Minister Alexis Tsipras. The 72-word question is a ridiculous summation of complicated financial discussions that very few people can possibly understand. The legal grounds for the referendum are not even clear, because currently there is NO deal on the table. What, exactly are people voting on? Whatever the stated question may be, most people seem to understand that the real issue in this referendum is Greece’s position not only in the Eurozone but in the European Union itself.

A friend on the island of Andros had an interesting solution to his anger at the government and the uncertainty of the current situation – independence. “We should immediately declare independence from the oppressive, idiotic regime in Athens! We could build a real economy here based on out maritime history, but including other centers of excellence such as financial and health care.” All it needs now is a Declaration of Independence. We are, after all, close to July 4th.

Sunday, 21 June 2015

"They've Succeeded In The Impossible. They've Made Jersey City, New Jersey Look Better Than Greece!"

There is, unfortunately, very little optimism about the critical meeting on Monday, June 22 with Greece and its creditors. There is very little reason to think that the institutions controlling much of Greece’s enormous debt are going to bend on their demands for economic/social reforms in Greece before releasing more cash. And there is even less reason to hope that the rigid ideologues that now run Greece have the slightest intention of implementing reforms that might help Greece but would weaken their political position.

            If the talks fail there is a very good chance that Greeks would rush to pull whatever funds they have left out of the banks, thereby creating the situation that would call for capital controls. Another logical consequence is that Greece would fail to make scheduled payments to the International Monetary Fund and would start on the slippery road to default and possible exit from the Euro.

            A reasonable person might think this is a scenario to be avoided at all costs. It could plunge Greece into the economic unknown and severely intensify the poverty and hardship already suffered by many in the country. But that same reasonable person would be making the same mistake that Greece’s European counterparts have been making for the past five months, i.e. believing that the ruling Syriza party has any interest in compromise or making a mutually beneficial agreement.

            All one had to do is listen closely to Prime Minister Alexis Tsipras’s comments at the opening of the new parliament or the comments of other Syriza MPs and ministers to understand the total commitment to a failed ideology. Various Syriza MPs have said over and over again that the government should never sign a deal and that returning to the drachma with the ensuing economic chaos would be a very good thing. The Minister of Education said a key policy of his ministry would be to eliminate the concept of excellence in education. Who knows? Perhaps in his mind such a thing as educational excellence smacks too much of the dreaded elitism. Maybe he really does think a generation of morons can compete with the Chinese and Indians who have no problem promoting excellence. In his opening speech Tsipras mentioned four times the Greek word roughly translated as equalization. Only now are people realizing that his version of social and economic equalization is to drag the top down, not bring the bottom up. In his brave new world everyone is the same – they’re all desperately poor with no hope for the future. Even today at the 11th hour Greece’s finance minister Yiannis Varoufakis is saying that he hopes the creditors will fulfil their responsibilities to save Greece and, by the strange extension of his unique logic, all of Europe. Needless to say he failed to say much about Greece’s own responsibility to come up with a realistic compromise.

            In the beginning many in the European Union thought Tsipras’s opening remarks last winter were just part of electioneering. Surely, they thought, he would become more rationale in time, and separate himself from the leftist ideologues in his own party. Wrong. A Greek journalist friend in Brussels made an interesting observation early in the negotiations. “Too many people here think there is a difference between the ‘good’ Tsipras and the ‘bad’ hard left element of the party. They’re wrong. There is no difference at all.

            Perhaps the most surprising element of all, however, is the inability of very smart people in Greece to mount any opposition to these destructive developments. Where is the broad-based communication program pointing out to ordinary Greeks just how much they will suffer under new drachma regime? Why leave the moral high ground to Syriza? Perhaps there is a fatalistic acceptance of what is considered inevitable.

            I remember a dinner party last fall in Athens when a group of lawyers and businessmen were discussing what would happen if Syriza won the election. Most were modestly hopeful that disaster could be avoided. One former bank executive had a very succinct response to the question. “Train wreck. Huge train wreck. That’s what will happen. Perhaps from the rubble we can build a good economy.” That certainly was a conversation stopper.

            Another businessman, one who pays all his taxes and obeys the country’s labyrinthine regulations was beside himself with anger. “These liars will ruin everything! They are going to turn us into the North Korea of the Aegean. They have no idea of the damage they are causing for generations. Any young person in Greece with an IQ of room temperature will leave.”

            But again, why are these sentiments restricted to private conversations? Where is the leadership of the opposition? It takes more than dry speeches in parliament to counter Syriza’s bombardment of mis-information.

            An exasperated Greek-American who recently moved back to Greece is re-thinking his decision. “These idiots in government are ruining what could be paradise! They have succeeded in something I thought was impossible. They have made Jersey City, New Jersey look better than Greece. That takes talent.”


Wednesday, 3 June 2015

Will Sunday's Elections Challenge Tayyip Erdoğan's Dominance Of Turkish Politics?

With just three days remaining before the critical Turkish elections the noise is reaching deafening crescendo levels, the streets are blanketed in party posters, and party leaders continue their furious pace around the country trying to convince voters that they and only they can put the country on the right course. And, above all else, speculation on the outcome and post-election scenarios has replaced football as the favourite national pastime.

As we all discovered in the British elections last month polls can be misleading. They can miss underlying trends by asking the wrong question or taking at face value what people tell the pollsters. Polls in Turkey are even more useless. And the media merely takes the side of whoever owns that particular outlet. If the media owner owes his fortune to the ruling Justice and Development Party (AKP) it’s a safe bet that his broadcast outlet or newspaper will claim that Turkey without President Tayyip Erdoğan will rapidly go down tubes. And if the owner is brave enough to oppose Erdoğan you can bet his TV station or newspaper will lay all of Turkey’s present and future problems at his doorstep.

Election posters cover all available space

Nonetheless, even with all these caveats, your fearless correspondent has asked a number of people from different walks of life about their predictions for these elections.

One expat who has been in Turkey for a number of years offered one of the more cynical opinions.

“The AKP will definitely get enough votes and deputies to change the constitution to give Erdoğan what he wants. Erdoğan and his henchmen will do whatever is necessary to keep the Kurdish party (HDP) just below the 10% threshold for entering parliament. This may be a cynical reaction, but I have learned never to underestimate Erdoğan’s ability to generate, one way or another, the outcome he wants. Too many people are confusing what they hope will happen with what will happen.”

The other extreme came from another friend who admittedly has no love for AKP, but has been observing Turkish politics for several decades.

“This time AKP will get only 35% - 38%. The main opposition Republican People’s Party (CHP) will get 28% - 32%, the nationalist party (MHP) will get 14% - 17%, and HDP will get 12% - 15%. With this scenario AKP will definitely fail to get enough deputies to form a single party government. Even worse for them is that a group of 50 – 60 AKP deputies could split off and form an independent group inside the parliament.”

A Turkish cab driver in New York was more succinct. “The country has finally woken up. Those b…… won’t even get 40%. They’re just frauds and phonies.”

A London-based young Turkish professional also believes the AKP vote will fall to the low 40% level and that HDP will succeed in entering parliament. But he warns not to forget the Gülenists, referring to followers of the Islamic scholar Fetullah Gülen who are accused by Erdoğan of running a parallel government within Turkish state institutions. “They hate Erdoğan and are running as independents in many districts. Some of them will enter parliament and cause problems for AKP. Watch the post-election manoeuvring. That will be fascinating.”

An Istanbul housewife who typically supports CHP says she will vote for the Kurdish party this time. “I have been trying to convince all my friends to vote for HDP. It’s critical that they cross the 10% threshold.  I think that AKP’s vote will fall to just above 40%, still the biggest party but not powerful enough to force a constitution change. CHP could get as much as 27%, MHP around 17% and HDP could get 11% - 12%.”

The all-important ballot box

Another long-term expat who accurately predicted the outcome of last summer’s presidential election agrees that AKP’s vote share will drop sharply this time.

“They will probably get somewhere around 43%, CHP 26%, MHP 17% and HDP between 10% - 11%. The actual HDP votes will have to be quite a bit higher than the final number because of potential election fraud. They could lose a lot of votes because some of Erdoğan’s more fervent followers will try anything to make sure HDP stays below 10%. AKP will be close to getting enough deputies to form a single-party government, but won’t have enough to change the constitution.”

One of the intriguing things about this election is the persistent rumours of sharp tensions within the AKP that could lead to post-election re-alignment of alliances. One rumour gaining some traction is that Prime Minister Ahmet Davutoğlu is tired of Erdoğan’s constant interference and wants to assert his own power. According to this scenario he would not be at all unhappy if Erdoğan failed to the constitutional change allowing for a strong president. He could then put Erdoğan back into his box and carry running the government in a rational fashion with his own people. Davutoğlu has gone out his way, for example, to state that his plans for economic reform and growth are far different from Erdoğan’s.

Tayyip Erdoğan has dominated Turkish politics for more than a decade, and desperately wants to consolidate his position by changing the constitution to create a strong executive presidency enabling him to rule with no checks or balances. Even though he is not running for anything this time, this election is in large measure a referendum on him. But Turkish society has changed a great deal since 2002. It remains to be seen if Erdoğan’s old father-knows-best approach will work with an increasingly assertive group of voters. One can only hope that massive fraud does not derail the results and plunge the country into chaos.