A New Dawn: Turkey post July 2008

Now that the highly dramatic month of July has finally come to an end, the people of Istanbul can collectively turn a page and look to an immediate future, which appears considerably more certain, if not banal, in comparison to the recent past. The city's bourgeoisie will head to their summer houses in the greater Istanbul region, while the upper classes augment their social status and darker skin tones at exclusive seaside ghettos such as mythic Bodrum.


By mid-September, Istanbul and Turkish current affairs in general will most likely return to their more traditional frenetic cadence. The school year will have commenced, Istanbul traffic jams will be in full-force and the "deep state" Ergenekon trial will steadily gain momentum in the headlines. On the heels of the Turkish national team's truly remarkable and extremely lucky showing in the UEFA Euro 2008 tournament, one must also not forget the beginning of the new domestic football season; more Brazilians playing for Fenerbahce and greater promise for the eternal underdog and this observer's favorite team, Trabzonspor.

While all of the above is well-established on the country's active radar over the next three to four months, this observer is surprised by the relative lack of consideration being given to basic economic variables, which arguably hold the greatest potential to disrupt. It has been quite remarkable to observe how Turkish equities analysts, often quoted in the Western media, have been very quick point out that all of the political intrigue surrounding the country's economy has been "already priced into the market" with apparently great efficiency.

To their credit, the Istanbul Stock Exchange undertook an aggresive ascent during the hours leading up to the court's decision and barely flinched in reaction to the American Consulate shooting at the beginning of July and the more recent "double bombing" at the end of July. While both events were indeed tragic due to the loss of human life involved, both were also quite bewildering in terms of identifying a likely motivation or intended political message. Furthermore, the Turkish state's decisions to attribute the consulate bombing to "Al-Qaeda" and the Istanbul double bombing to the "PKK" were both predictable and unconvincing. The unfazed reactions of equities investors were a testament of the relative insignificance of both incidents.

The financial markets greeted the Turkish Constitutional Court's decision to not close the ruling AK Party with predictable enthusiasm. It was a highly pro-business decision, which this observer accurately predicted in April 2008. The recent sale of Akpet to Lukoil and the Istanbul Stock Exchange's rise from this year's doldrums, which have earned it the distinction of the world's worst performing emerging market exchange in 2008, will remain sparkling examples of Turkey's "new dawn" during the next few months. Nonetheless, certain extremely fundamental concerns, in addition to the slowing Eurozone economy, remain. They consequently demand adequate consideration in order to clearly assess the country's short and medium-term future.

The following are a series of economic issues, some new and others ongoing, that this observer has picked from the headlines over the past few weeks. It is highly likely that some combination of these issues will influence country's political and economic landscape through 2009.

Deutsche Bank AG, the world's biggest currency trader, raised its forecast for the lira against the dollar after Prime Minister Recep Tayyip Erdogan's Justice and Development Party escaped a constitutional ban. The currency will end the year at 1.20 per dollar, Arend Kapteyn, chief economist for Europe, Africa and the Middle East at Deutsche Bank in London, wrote in a report dated today. The bank's previous estimate was 1.41 per dollar.

Source: Bloomberg

Turkey's prime minister, defense minister and military commanders are meeting to appoint a new military chief of staff. The four-day gathering began Friday at the armed forces headquarters in Ankara...Gen. Ilker Basbug, the current commander of Turkey's army, is expected to succeed chief of staff Gen. Yasar Buyukanit, who retires this month.

Source: IHT

"Once the euphoria dies down, attention will again turn to run-of-the-mill issues, like global markets, oil prices, and the domestic macro situation," says economist Banu Tokali of Istanbul brokerage FinansInvest, citing "inflation and monetary policy, in particular, coupled with the still-gaping current account deficit."

Turkey's central bank raised rates a further 50 basis points in July, repeating identical hikes it made in May and June. The latest increase brings the overnight borrowing rate to 16.75%, with the lending rate unchanged at 20.25%. The bank has been cagey about projecting its future monetary course, given the uncertain outcome of the AKP case and the unknown duration of the recent drop in oil prices. But in its July inflation report, the bank hinted at a slowdown in rate hikes. The bank also revised upward its projected inflation rate for 2008, from 9.7% to 10.6%, and pegged next year's rate at 7.9%.

Source: Business Week

Turkey, which could find funding from global markets more easily in the past, had to increase its interest rates to cope with the squeeze. The credit crunch process in the global markets has created a dramatic change in the financing of Turkey's current account deficit.

In the first five months of the year, current account deficit rose 33.3% from $16.16bn to $21.54bn while the total of foreign direct investments and portfolio investments dipped 73.3% from $18.87bn to $5.0bn. Meanwhile, foreign borrowing of banks and companies surged 116.2% from $10.39bn to $22.46bn, an indication that there may be a problem in financing the current account deficit.

Normally, the distress in financing the current account deficit results in a narrowing of imports for investments and production. Therefore, while the current account deficit is moderated, the economy starts to shrink. When companies are unable to find resources from abroad, they are obliged to knock at the door of banks for loans. This increase in loan demand results in the further increase of loan interests.

Source: Referans

Turkey raised its natural gas prices by nearly 20% on Friday in line with a new cost-based pricing mechanism, state pipeline company Botas said, announcing a move likely to increase already high inflation.

The gas price rise was fixed at 16.88% for residential properties and 18.77% for industry, Botas said. The cost-based pricing mechanism, introduced by the High Planning Board from the start of July, applies to all state energy companies and is seen as an important step before further privatisations of power distribution and production facilities.

Before the new system was introduced, electricity prices for industry were raised by 22% effective from July. Electricity companies have not applied to set new power tariffs this month. Rises in energy prices generally have been a major component in Turkey's double-digit inflation. The central bank, which has raised interest rates this year and said it could tighten further, has repeatedly cited energy prices as an inflation risk.

Source: Reuters

Turkey Political Poll

A political poll commissioned by the Swiss bank Credit Suisse depicts a discernible level of fallout from the tumult, which has surrounded Turkey's governing AK Party. According to the poll conducted by A&G Research, support for the AKP has fallen to 39.7% from a mid-summer 2007 election result of 47%.

If there is indeed truth to the findings of this poll, their most significant message is not that the AKP is losing support among the Turkish public, but rather which political group is benefiting from this slide. Turkey's right-wing nationalist MHP has apparently improved its standing by three percentage points to 17.1%. Also of note, Turkey's mainstream secular party, the CHP, continues to lose ground.

As this Bosphorus Watch post from several months ago demonstrates, there is little surprise that Turkey is experiencing a shift toward the right and nationalism. In addition to the link between an economic downturn and nationalism, it is equally significant that the CHP has been unable fill the small void left by the AKP. The secularist party’s failure to generate traction among Turkish voters is most likely due to its particularly stale vision. There is little about the CHP that is fresh or that represents a radical departure other than its steady dose of reactionary squabbling with the AKP. In this respect, the sacking the CHP’s long-time leader, Deniz Baykal, would be a good first step toward creating momentum for the secularist cause.

Turkey's Military and its Role in Politics

Bosphorus Watch favorite, Gareth Jenkins, has authored yet another intriguing piece about Turkish society. Jenkins' most recent essay concerns the professionalization of the Turkish military. Currently, only one in six members of Turkey's military is a professional soldier. While the military's total size is 600,000, the operational effectiveness of its conscripts has been repeatedly called into question especially during the recent operations in northern Iraq. In particular, Turkish conscripts have demonstrated a penchant for being abducted by the PKK, undoubtedly causing great embarrassment to the leaders of NATO's second-largest member force.

Starting in May 2008, the army will begin to phase out the use of non-professional soldiers for its six commando brigades, which comprise approximately 10,000 soldiers. By the end of 2009, the commandos will operate as an entirely professional fighting force. Although unlikely to be accomplished in the short-term, the commandos may only be the beginning of a military-wide effort to transform the Turkish military into an exclusively professional force.

(For further details, please refer to this article in Today's Zaman.)

The strength of Jenkins' piece is his in-depth exploration of the army's past and present relationship with Turkish society. His consideration of the military's role as an "educator" is particularly important:

It is unclear, however, what impact the increased professionalization of the Turkish military will have on its relationship with society as a whole. Many in the higher echelons of the TGS favor the complete professionalization of all of the country's armed services, although they acknowledge that cost considerations make such a change unlikely in the near future. But there is also a concern that the abolition of conscription would sever what they regard as a sacred bond between the Turkish nation and the profession of soldiering.

Turkish school textbooks still portray the military as something akin to the essence of the Turkish nation, although the intensity with which it is inculcated has declined in recent decades. Indeed, until the 1960s and 1970s, when more Turks began to have access to formal education, the country's military was itself frequently referred to as "a school." It was often during their military service that conscripts from poorer backgrounds first learned to read and write and become familiar with social niceties such as the use of a knife and fork. Even today, for the mass of the male Turkish population, military service remains a rite of passage into manhood. Although it is frequently overlaid with resentment at the often haughty manner in which they are treated by the members of the officer corps, many retain an emotional attachment to the institution, if not necessarily to all of its members, long after they have completed their military service. Particularly outside the Turkish elite, the inculcation of the identification between the military and the nation, together with the personal experience of military service, undoubtedly have an impact on public willingness to tolerate the Turkish military's occasional attempts to influence the political process; especially in times of perceived risk or crisis.

The identification between the military and the nation is, however, already being eroded by the spread of literacy and developments in communications, which have meant that Turks now have access to many more sources of information than the state-controlled educational system and what they are told by their commanding officers during their military service. Similarly, the gradual professionalization of the army, even if it is initially only in certain units, is likely to weaken the emotional bond formed by military service; raising the possibility that the requirements of improved military efficiency may come at the cost of a reduction in the TGS's ability to influence the political process in Turkey.

In relation to the lower and rural echelons of Turkish society referenced in Jenkins' article, the army arguably maintains a degree of influence greater than that exercised by the country's traditional primary and secondary school apparatus. In particular, it is relatively unknown to what level this demographic actually completes traditional education. Therefore, military service can be viewed as the last opportunity for the Turkish state to create an "emotional link" among the more disenfranchised, poor or rural members of Turkish society.

The poor or rural male demographic has proven quite significant to contemporary Turkish political proceedings; the number of AKP supporters who hail from this segment of society is substantial. As a result, the Turkish military's ability to apply an emotional stamp on the "hearts and minds" of these poor or rural young men would clearly have great appeal to those in Turkey who advocate a strict secular, Western line, such as country's generals. Professionalization of the military would not only involve a stiff financial cost, but it would also eliminate an important means of ideological influence.

There would also appear to be a second approach to analyzing the military's pursuit of an entirely professional force. With his comment that, "the identification between the military and the nation is, however, already being eroded by the spread of literacy and developments in communications", Jenkins makes the tacit suggestion that the Turkish military may be coming to grips with the fact that the secular state's ideological influence is waning. There is arguably no greater proof of this fact than in the repeated democratic election of the the AKP.

By foregoing the traditional opportunity to shape the hearts and minds of young conscripts, the military could instead concentrate its resources on creating a secular elite through the ranks of a professional army. It is widely known that those soldiers who are allowed to move up the ranks of the military are able to do so as a result of both professional and ideological merit. Those who profess beliefs other than the traditional Ataturk-inspired secular Western line encounter a professional dead-end. With a completely professional army, Turkey's generals could better guarantee that the desired ideology is maintained from the high command all the way down to the troops chasing the PKK on the ground.

While such improved ideological efficiency, paired with more reliable combat training, would ideally strengthen the Turkish military's operational capabilities, it would also reposition the military's role in society as Jenkins demonstrates.

Despite its much feted "e-coup" in the spring of 2007, the Turkish military's role in politics over the course of the AKP era has been steady, but remarkably restrained compared to past eras. It is conceivable that the generals have in fact bought into the need to practice good public relations vis-a-vis the EU, the Western media, and possibly even Turkey's regional peers.

Rather than diluting its resources in order to more widely interact with the masses, the professionalization of the Turkish military would be a philosophical shift towards the strengthening of elites. Although this might be a rather unfair comparison, a more PR-savvy Turkish military philosophy may hope to develop personalities from within it ranks, who ultimately play a role in Turkish politics similar to the one played by Dwight Eisenhower, Colin Powell and now John McCain in America.

May 1stanbul

The events of Turkey's 2008 edition of May Day passed in a predictable fashion. Roughly 500 protesters were reportedly arrested, Turkish police exploded tear gas bombs in front of hospital entrances, protesters were pulverized by water cannons and beaten by batons. As is typically the case during such crack downs, the actually number of people taken into custody undoubtedly exceeded official figures. May 1st is a time for security forces to take advantage of mayhem and "clean house" among unwanted members of society whether or not they are even participating in the day's events.




For this observer, and many seasoned expatriates living in Istanbul, there was little surprise concerning the level of flagrant brutality authorized by the Turkish government. One only has to look to the events that take place in the east of Turkey, in places such as Diyarbakır, to understand the potential of Turkish security tactics.

Unlike the east of Turkey, it was quite remarkable how well the events in Istanbul were caught on camera. As an American who vividly remembers the uproar that surrounded the Rodney King affair, it was unfathomable how oblivious the Turkish security forces acted despite being under a lens for much of the day.

Equally shocking was the indifferent line that seemed to be chosen by mainstream Western media outlets. Despite the fact that Prime Minister Erdoğan provided a choice sound bite during the lead-up to May 1st - "It will be mayhem when the feet start to manage the head" - May 1st was not as widely analyzed as one would have hoped. This decision is particularly puzzling given the fact that Turkey is one of the few Muslim countries with a significant middle-class and is such a popular topic in the Western media in general.

Moreover, Turkey's May 1st demonstrations provide a rare view of less mainstream or "silenced" elements of Turkish politics. While the Turkish labor unions ultimately canceled their march on Taksim square, the day was a nationally-televised showcase for a much wider range of political distention than normally receives coverage in Turkey.

The May 1st footage also encouraged this observer to put Turkey in the context of the greater region. The events of May 1st proved that Turkey is not an exception among American neo-conservative backed governments, which are tacitly encouraged to repress political opposition. While Azerbaijan continues on its draconian path and therefore does not merit discussion, Georgia and to a lesser extent Armenia have quite recently witnessed government coordinated acts of repression. Georgian President Mikheil "Misha" Saakashvili, barely received a slap on the wrist in the West for his repression of opposition elements prior to making the decision to hold early presidential elections. Such is Misha's reward for representing the region's only stalwart against Russian imperialism.



Georgia and even Armenia are a "Wild West" in comparison to Turkey - Turkey is a much more affluent, stable and strategically important country compared to its neighbors in the Caucasus. While it therefore feels somewhat odd to compare Turkish politics and discord to that in Armenia or Georgia, the country's ceremonial May 1st repression ritual reminds one of just how easily Turkey's affairs can devolve if the circumstances are right. Despite its much greater levels of economic and democratic development, the events of May 1st remind one of the degree to which Turkey continues to be influenced by the insecurities of its corporatist core.

Considering the Likely Fate of the AKP

The drama surrounding the potential closure of the ruling AKP party acquired a significant nuance with the decision of Standard & Poor's to cut Turkey's credit rating to three increments below investment grade (BB-) last week. The credit agency attributed its sudden decision to "the increasingly challenging political and global environment that Turkey faces in the near term". Moody's, on the contrary, has decided to keep its rating unchanged, choosing to focus on more fiscal factors for its credit appraisal.

While S&P's credit rating cut was probably a bit rash, its verdict on the Turkish economy was nevertheless inevitable at some point in 2008. After multiple years of robust growth, it has become increasingly clear over the last nine months that the country's economic pendulum has begun to swing away from good fortune. Only the very brave, or ignorant, have argued that the Turkish economy could easily navigate the brewing global downturn. In this regard, S&P's announcement can be taken as the symbolic beginning of a new era of Turkish political-economic history; the good times will no longer roll like they once did.

The current economic situation is not particularly dreary for most segments of the Turkish population other than inflationary pressures on food prices. However, as growth projections are revised due to the impending slowdown in foreign direct investment (FDI), the economy will increasingly experience more unpleasant realities. The mechanics of this impending economic malfunction are largely related to the Turkish economy's need to attract FDI in order to stave off the symptoms of its looming account deficit. In addition to the usual threat posed by cheap imports from China, one of the main causes of Turkey's robust account deficit has been the AKP's legacy of generous public spending. It should also be noted that this spending has made a significant contribution to the party's popularity in certain parts of the country.

Economic issues are perhaps of highest importance to Turkish voters and may have in fact been responsible for the AKP's resounding victory in the July 2007 referendum. It is therefore the opinion of this observer that any attempt to predict how the AKP will weather the current legal storm must be considered in the context of economic factors.

If Turkey's constitutional court decides to advocate the closure of the AKP on grounds of anti-secular activities, members of every single part of the Turkish political and religious spectrum will face a great economic punishment. The reasons for such a forecast are in fact quite simple.

1.) Any legitimate sympathy Turkey in fact has in the EU political universe vis a vis its EU candidacy will vanish over night. Without even the lingering possibility of EU membership, Turkey will become a much less attractive place to a certain breed of foreign investor. Whether Turkey truly needs the EU from an economic standpoint is separate question. What is certain is that "perceptions" of Turkey among investors will be damaged if the EU has reason to distance itself.

2.) While the AKP has probably been partly responsible for the considerable amount of Arab investment from Gulf sources that has poured into Turkey over the course of its political tenure, its actual skill for "economic management" can be isolated to a single issue: stability. As an emerging market prone to natural disasters, military coups, terrorism activity, and domestic turmoil of many kinds, the AKP has been very adept at keeping a lid on Turkey's eternally boiling pot. By Turkish standards, the political scene has progressed quite smoothly over the past couple of years and this has emboldened investors to make greater financial commitments.

3.) Closure of the AKP would require new elections and the creation of a new government. Assuming economic conditions slide as a result of the political turmoil and the EU chooses to take a step back from Turkey, it is quite likely that the Turkish public would turn inward. An introverted Turkish public might very likely gravitate towards the right-wing nationalist arms of one Devlet Bahçeli, the head of the MHP or Nationalist Movement Party. Having won 14.3% of the electorate in the July 2007 vote, MHP might prove to be the biggest beneficiary of a court ruling against the AKP. The social turmoil that this gravitation to the right would entail could become extremely unpleasant and would further stall the country's economic progress.

It is unlikely that the AKP will face closure or that any of these doomsday scenarios will see the light of day. Turkey can nonetheless grasp this moment in its political history as an opportunity to evolve its democratic institution to its next possible level of development.

It may indeed be true that the AKP is at fault for transgressions against secularism. However, Turkish proponents of secularism and other supposed "pro-Western" elements of society would be remiss for decisively terminating the life of a democratically elected political party. While Turkey is a democracy in practice, it remains reluctant to emotionally embrace the kind of pluralism that characterizes the world's strongest democracies. Very few people in Turkey seem to sufficiently trust their government in order to hold the expectation that government will protect the rights of individuals on any end of the political spectrum. It is for this reason that most secular Turks consider it unthinkable for the AKP to protect the rights of women who chose not to wear the headscarf. Conversely, religiously-observant Turks continue to fight for equality in Turkish society, as evidenced by the removal of the law against women wearing head scarves on the grounds of Turkish universities. It is quite unclear whether this particular reality concerning head scarves in universities will endure beyond the era of the AKP.

If the country's constitutional court were to decide to reprimand as opposed to ban the AKP, democracy in Turkey will have taken a giant step forward. By allowing the AKP to persist, albeit under certain constrictions that force it to better "respect" the secularist framework of society, Turkish politics would have gained an important new dynamic. Such a decision would help establish an environment in which the country's emerging religiously-minded values can coexist with its traditionally secular mores and legal framework. In the long term, this is something for which both the EU and foreign investors would enthusiastically cheer.

Head Scarves and Socio-Economic Mobility in Turkey

Few individuals in Turkey or beyond lack an opinion about the AKP's proposal to give young women attending university the legal right to wear head scarves in university facilities. The mere political progress made by this reform convinces many of the country's secular citizens that their country is five years away from resembling Iran - a type of doomsday "back to the future" scenario considering the last great Islamic revolution was in 1979. Western voices, which laud the democratic or Western aspects of these impending reforms, are chastised by the secular elites for not understanding the critical threat of "politicizing" religion in such an important public sphere of Turkey's legally secular society. These elites furthermore derive a feeling of abandonment and perhaps betrayal from the West’s tendency to cite Turkey as an example of the potential for democracy to cohabit with Islam.

In addition to the rhetoric of politicians, Turkey’s secular community has made most of the headlines with flag-waving political demonstrations. There nevertheless exists a less publicly assertive portion of Turkish society, which is a less-widely reported, but is nonetheless growing in importance for the Turkish social landscape. This segment is composed of individuals who are less concerned with issues such as secularism or political symbolism. They desire equal opportunities for religiously observant woman, who want to remain faithful to the commandments of their religion while in the act of receiving a Western-style education in Turkey's universities.

Arguments concerning the validity of religious symbols have enveloped the domestic and international discussion of head scarf reform in Turkey, obscuring other extremely important and equally symbolic aspects of the political initiative. Not simply an issue of religious political symbolism clashing with the original secular values of the Turkish Republic, the crisis over the head scarf is perhaps more importantly symbolic of frictions related to the socio-economic evolution that defines modern Turkey.

As is the case in many fledgling nations, accumulating wealth, increasing one's standing in society or simply creating a sense of security have all been a function of a citizen's proximity to the state. For the first five or six decades of the Turkish Republic's economic history, the state was almost the exclusive orchestrator of economic development in Turkey. Foreign investment was non-existent, entering the economy only by way of various aid packages from the United States and other allies in the West.

The development of many of the substantial conglomerates, which currently rule Turkey's modern economy, accordingly followed this rule of proximity to the state. Vehbi Koç, the founder of Koç Holding, was a mere grocery owner in Ankara during the 1920s. Tapped by Atatürk to become one of Turkey's early captains of industry, his descendants now control an empire of 98 companies that ranks 358th in the Fortune Global 500 of 2006. While the Koç story is extraordinary, it is nonetheless indicative of an economy strongly influenced by the state. Successful participants in Turkey's private sector, in addition to generations of Turkey's armed forces and other state organizations, traditionally acquired great wealth or more moderate financial security due to their affiliation with the Turkish state. Such affiliation naturally included their adoption of state-sponsored social mores - unabashed secularism chief among them.

Free market reforms during the 1980s, which were implemented under the leadership of then Prime Minister Turgut Özal, would prove to have a dramatic, and perhaps unintended, influence on the socio-economic dynamics of Turkey. Privatization of state assets allowed the Turkish economy to develop in new ways and slowly increase its interaction with global markets. This in turn paved the way for a customs union with the European Union in the mid-1990s, greater foreign investment, and ultimately the economic conditions in which a non-state affiliated lower-middle and middle classes could emerge.

This phenomenon was marked by free market economic growth that was not restricted to the traditional Turkish industrial centers such as Istanbul, Bursa or Ankara. During the 1990s and most prominently since 2001, unprecedented levels of prosperity, which were still extremely low by European standards, were also felt in traditionally underdeveloped places like Gaziantep, Kayseri and Konya. Business Week-type clichés such as "Anatolian Tiger" were accordingly coined to describe a phenomenon that would not have been possible two decades earlier. Turkey's president and AKP leader, Abdullah Gül, started his political career in Kayseri. Much of the AKP's current domestic political punch is thanks to the influence of wealthy businessmen from Kayseri and other regions in Anatolia that had been neglected by economic development prior to the free market reforms.

From the perspective of social values, these traditionally poor areas of Anatolia had understandably not bought into the mores of Ataturk's republic quite as enthusiastically as the more economically developed centers. Moreover, the social values and political concerns that had always held sway in these areas did not necessarily evolve due to the greater levels of economic development. Rather, they gained a more prominent political voice since they no longer represented a strictly poor cross-section of society as had traditionally been the case. With the gradual economic development of a non-state affiliated middle class in interior Anatolia starting in the 1990s, values common to interior Anatolia would come to develop a stronger political voice at the national level.

The development of the poorer regions in Anatolia has been a priority of the Turkish Republic since Atatürk's time. While it is true that the state did invest in these regions, it was ultimately capitalist free market actors that would appear to have generated the greatest momentum for socio-economic mobility. While Atatürk no doubt hoped that such an "Anatolian Tiger" renaissance would some day occur in Anatolia, it is doubtful that he would have appreciated the interior Anatolian social values that it has assisted in bringing into the national political arena.

It is ultimately within this framework that one can further consider the great paranoia of the secular Turkish elites concerning the current head scarf crisis. In particular, the emergence of the head scarf issue serves as a reminder to Turkey's secular elites that conservative social-values no longer exclusively belong to the domain of the poor in interior Anatolia. Rather, these values are espoused by Turks, who are steadily growing into sizable middle classes, and who consequently have a much greater will and ability to realize their social interests through politics. While still solid, the secularist economic power base established by Atatürk maintains a weakening grip on the direction of the country.

Considering Greece and Armenia's Support of Turkey's EU Candidacy

Aside from the ongoing drama between the PKK and the Turkish military, a great deal of Turkey's most recent foreign affairs activity has been tied to its potential accession to the European Union (EU). Most observers of Turkey derive the majority of their analysis of Turkey's potential EU membership from the stoic proclamations of President Gul or the anti-Turkish rhetoric of President Sarkozy. However, an additional angle from which one can develop further understanding of the EU issue is by exploring the perspective of Turkey's traditional foes, Greece and Armenia.

This past week featured Turkish Foreign Minister Ali Babacan and Greek Foreign Minister Theodora Bakoyianni exchanging incredibly sugar-coated words concerning Turkey's EU candidacy and also on the general subject of relations between their two countries. With Greece wholly behind Turkey's EU bid, Turkey has gained a very valuable source of support given the fact that the relations between the two countries have been historically sour at best.

Some observers consider Greece's strong support for Turkey's bid as somewhat inevitable given the growing amount of humanitarian cooperation between the two countries since they were struck by the same earthquake several years ago. Cross-border investment is growing in both directions and young Turks certainly do not harbor the same acrimonious feelings about Greece that their grandparents possess. The recent inauguration of a gas pipeline between Greece and Turkey to serve European markets further highlights the growing strategic connections.

There is no question that the positive momentum that increasingly characterizes the relations of Turkey and Greece is real. While Turkey's motivations are clear, it is nevertheless important to take a closer look at why Greece has chosen to extend its support. To understand Greece's motivations in greater depth (and beyond their interest in seeing the Cyprus issue resolved at some point during this century), it is helpful to jump to Armenia in order to consult that nation's conversation concerning Turkey and the EU. Whether due to the historical issue of the Armenian Genocide or the ongoing Turkish (and Azerbaijani) economic blockade, Armenia's affairs and future are very much tied to those of Turkey.

While largely unnoticed by the Turkish media, there is a heated debate between Armenia's long-time former president, Levon Ter-Petrossian, and the current president, Robert Kocharian, concerning Turkey's future in Europe. While both are interested in greater normalization of ties with Turkey, Ter-Petrossian is much more aggressive about pursuing cooperation and dialog. Concerning Turkey's candidacy for the EU, Ter-Petrossian's views are quite logical as exhibited in the following article from armenialiberty.org.

“Isn’t it obvious that Turkey’s membership in the EU is beneficial for Armenia in the economic, political and security terms? he added. "What is more dangerous: an EU member Turkey or a Turkey rejected by the West and oriented to the East?
“Or what is more preferable? An Armenia isolated from the West or an Armenia bordering the EU? Our country’s foreign policy should have clearly answered these questions a long time ago.”

Ter-Petrossian's comments are just as applicable to Armenia as they are to understanding Greece's interest in Turkey becoming a member of the EU. In addition to the regional economic benefits of Turkey joining the EU, both Armenia and Greece are very aware of the value of the horse-and-carrot strategy that the EU has used to prompt Turkey to pursue internal changes. This EU strategy has been implemented in order to force stubborn Turkey to pursue a path that is complimentary to the Western European system of political, economic and social values. Most Turks, in turn, have become embittered by what they see as a series of false promises, which have provoked a dizzying contortion of Turkey's identity. Both Greece and Armenia could not be more pleased by this painful process and will rue the day that Turkey is no longer tempted to join the European fraternity.

It is of course irrelevant to either Greece or Armenia whether joining the EU is truly the best direction for Turkey. Both nations realize that Turkey would pose a bigger threat to their interests today if Turkey had not been under the EU microscope for roughly the past decade. As long as it continues to seek entrance, the EU will increasingly deny Turkey's ability to pursue its traditional agendas. It therefore appears likely that Greece and Armenia are hoping to use Brussels as the means for realizing their own historic interests vis a vis their greatest rival.

Turkey and Iran: Further Reading

The following article by John C.K. Daly in United Press International offers readers a nice overview of Turkey's latest string of energy dealings with Iran. Daly's article also considers the American view of these growing energy ties. He reviews the frequently referenced array of diplomatic exchanges, which have communicated Washington's aggravation with Turkey's creation of a small, yet symbolic, hole through the wall of international sanctions against Turkey's southeastern neighbor.

The second half of Daly's article documents the highly over-emphasized saga of estrangement between Turkey and the U.S. To his credit, Daly makes the very astute observation that Turkey has crossed Washington due to its practical energy needs. He also makes the rather novel argument (for a Western journalist) that it is Washington's responsibility to propose workable solutions, which do not involve Iran, if Washington is truly dismayed by energy cooperation between Turkey and Iran.

It is time for the Bush administration to realize, however belatedly, that its inattention to Turkish domestic and foreign policy concerns has produced the growing estrangement between the two nations and that Washington has nothing to offer Ankara in the energy sphere except criticism. The Erdogan government, as a necessity, has accordingly moved national energy concerns ahead of placating U.S. foreign-policy initiatives.

It is the opinion of this observer that the Erdoğan government was absolutely correct to prioritize Turkey's energy concerns over U.S. foreign-policy initiatives. Moreover, there is little evidence that closer ties with Iran are an example of the AK Party's religious agenda other than its interest and success in doing business with religiously conservative countries like Iran, as well as Gulf countries and Saudi Arabia.

While Daly should be lauded for his analysis of Turkey's rationale, he places too much importance on the cool distance that currently marks the relationship between Washington and Ankara. As George Bush and Nicolas Sarkozy have demonstrated, relations between two countries with historic ties can be repaired overnight if there exists the common interest to do so.

Pursuing energy trade with one's neighbors is a very healthy practice. In fact, growing regional energy integration breeds an atmosphere of greater normalcy through interdependence. While it is true that Iran is an exceptional case, selling electricity and other forms of energy to Turkey is absolutely the type of activity that the international community should condone. It is constructive compared to Iran's typical machinations. Perhaps this is why neither Washington nor the European community have accorded much punch to their criticisms of Turkish-Iranian energy ties.

Turkey's Foreign Affairs Blitz

While of minor importance to most Turks in comparison to their national football team's efficient victory over a weak Bosnia-Herzegovina side and the team's resulting accession to the Euro 2008 tournament, this past week also featured the Turkish government culminating an impressive flurry of foreign affairs activity. Although the Turkish national team has little chance under its coach, Fatih Terim, whose arrogance shadows his remarkable flair for dramatic dress-shirt and jacket collars, the government's latest efforts will surely give Milli Takım fans something to talk about beyond their team's early exit from the European football championship tournament this summer.

Turkey's latest foreign affairs campaign began almost a month ago. Motivated by Turkey's highly theatrical bluff to invade northern Iraq, Ankara hosted a rather awkward summit with Iraq's Prime Minister Al Maliki. This visit was followed by King Abdullah of Saudi Arabia and his delegation of 11 planes. Erdoğan and Gül would then elegantly contrast the King's visit by hosting Israel's President Peres, in addition to Palestinian National Authority President Mahmoud Abbas. Other than the usual series of forced handshakes in front of photographers, Turkey announced that it would lead the development of the Erez Industrial Zone in order to promote foreign investment to a destitute region prone to terrorist activities.

The pace did not slow during this past week. Prime Minister Erdoğan inaugurated a gas pipeline between Turkey and Greece, a key component of the Nabucco pipeline project that transports Central Asian gas supplies to Central Europe. President Gül then participated in ground-breaking ceremonies for the new Baku-Tblisi-Kars railway, which has greater symbolic importance than practical potential due to the dilapidated nature the rail networks in all three countries. Turkey's efforts to pursue peace in Palestine were ultimately awarded with an invitation to the Annapolis Summit, which was a significant acknowledgment of Turkey's (otherwise weak) presence in Middle Eastern affairs.

In December, Turkish foreign minister Ali Babacan will visit Greece to strengthen ties and promote Turkey's candidacy for the EU.

The Turkish media has been bubbling with suggestions of Turkey's emergence as a regional hegemon. These sentiments are typified by an article by Fatih University academic, Gökhan Bacık:

Turkey seeks to take concrete actions in the Middle East to move regional politics from its current abstract content to a more practical and implemental level. This is also not surprising because Turkey has the ability and capacity to achieve this. The Erez Industrial Zone, which will be constructed under Turkey’s leadership in the West Bank, is exemplary...There is one simple fact behind Turkey’s ability to offer concrete options and opportunities: that Turkey is a historical actor that has many aspects in common with all the actors of the region. For this reason, its contribution to make the devised projects operational is vital. The operational opportunities of the other actors including the EU are limited.

There is no doubt that Turkey should be commended for its recent surge in foreign affairs activity related to the Middle East. The country must do a better job of defining its modern identity in foreign affairs and this past month has been beneficial to that end.

However, this observer suspects that the ultimate success of Turkey's efforts will be tied to the true motivations for its involvement. If Turkey seeks engagement in a front-page issue like Palestine to self-promote its status as the EU's future bridge between Europe and the Middle East, it is doubtful that they will accomplish anything of note. However, if Turkey believes that it is in its own self-interest to develop such involvement in Middle Eastern affairs, with or without EU membership, then success will be much more likely. It is quite possible that Ankara is genuinely interested in forging stronger relations with Israel as a strategic advantage for the future.

However, Turkey has been making a big push of late to secure public declarations of support for its EU candidacy from multiple EU members. It is consequently the opinion of this observer that Turkey's most recent efforts, and particularly those involving Palestine, are nothing more than an attempt to pursue newspaper headlines in order to influence the opinions of Brussels Eurocrats. Gül's plan to establish an economic zone in order to address the relationship between unemployment and terrorism seems particularly inane given Turkey's own domestic problems with terrorism. Perhaps Turkey would grab even more European headlines if it first solved the unemployment problem in its volatile southeastern region.

Economic Take: The Kurdish Issue

Traveling through the southeastern regions of Turkey can be a bittersweet experience. Not only is the region's geography breathtaking at times, but so is the hospitality and incredible warmth of its people. Unfortunately, the living standard of most of the region's ethnic-Kurdish population is tragically low. While the historic economic situation of this part of Turkey has never been as robust as in the country's littoral areas, the Turkish military's reaction to the Kurdish uprising during the early 1990s was responsible for considerable regression.

Turks are understandably frustrated when they discuss the conditions of their country's southeastern region. They point to the preponderance of Kurdish families with seven, eight or more children and question why they should have such large families if they do not possess the financial means for their support.

It is very possible that there exists a degree of irresponsibility or irrationality in the family planning logic of Kurds living in southeastern Turkey. However, during the travels of this observer through places like Diyarbakır, Van and Urfa, it was apparent that there also exists a statistical rationale for having so many children. More offspring, and boys in particular, increase the likelihood that one of those children will be able to financially support the family one day. For an economy in which there are very few 9am-5pm jobs offering pensions, the family unit becomes much more important. This contrasts with urban centers, where people can literally afford to be self-focused. The reality presented is of course not exclusive to Turkey. In fact, it is relevant to many other parts of the world, including in my own country.

The Turkish economist, Mustafa Sönmez, has recently added a great deal of refreshing perspective to these issues as they relate to Turkey. His report entitled, "Increased Poverty in the East and Southeast and Solutions: Peace", is reviewed in the following Today's Zaman article. The conclusions of Mr. Sönmez are not particularly earth-shattering. Nonetheless, they highlight the fact that activity and discussion in Turkey of economic development in the southeast has been relatively superficial to date.

Turks will frequently reference the Güneydoğu Anadolu Projesi (GAP), or Southeastern Anatolian Project, as proof of the country's genuine conviction to develop the region. Ideally, this grandiose public-works project will do just that by harnessing the regions (rapidly depleting) water resources through a series of hydroelectric dams and irrigation systems. However, the execution of the GAP project has been slow and it appears that its funding has not been consistently supported by the country's politicians. In addition, this observer wonders whether the Turkish government enjoys playing God with the water supplies of its southern neighbors more than helping its Kurdish citizens.

Traveling through the southeastern regions of Turkey can be a bittersweet experience. Not only is the region's geography breathtaking at times, but so is the hospitality and incredible warmth of its people. Unfortunately, the living standard of most of the region's ethnic-Kurdish population is tragically low. While the historic economic situation of this part of Turkey has never been as robust as in the country's littoral areas, the Turkish military's reaction to the Kurdish uprising during the early 1990s was responsible for considerable regression.

It is often noted that PKK activity in the region has slowed the project's rate of completion. While the PKK is often a legitimate scapegoat in Turkey, it is truly not a viable excuse for those citizens, who fear the tide of terrorism. As NATO peacekeepers in Afghanistan or US soldiers in Iraq can tell you, people of any ideology are less likely to start shooting if they have reliable electricity and running water.

Keeping up Appearances: Turkey, PKK and N. Iraq

The feverish media atmosphere generated by the potential Turkish invasion of northern Iraq is on its way to reaching almost Cuban Missile Crisis proportions. Even Prime Minister Erdoğan has chastised certain Turkish media outlets for the manner in which they have covered the events of the past week. Having sold a lot of newspapers due to the most recent deaths and abduction of many out-numbered Turkish conscripts, there is little doubt that this type of media coverage will continue to carry the legacy of William Randolph Hearst for at least another few weeks.

It is the ambition of this observer to approach the question of a possible Turkish assault on N. Iraq in a way that touches on a number of factors and possible scenarios, which will undoubtedly influence the decisions made in the very near future. In addition, two recently published pieces about the potential Turkish invasion by Abdul Rahman Al-Rashed, the general manager of Al-Arabiya television, and by Gareth Jenkins of the Jamestown Foundation offer a number of very compelling insights for consideration.

Military: Television images of green Turkish military trucks rolling towards the border and comments by the BBC that, "Turkey has deployed up to 100,000 soldiers, backed by tanks, fighter jets and helicopters, along the border" are somewhat meaningless; it is very seldom that the Turkish military is not massing at the border with Iraq. It is likely that this most recent heavy military buildup began at the end of spring 2007 and has been reported in the media to have escalated at different times in response to PKK activity. As the saga of Abdullah Ocalan's pursuit and ultimate capture demonstrates, the Turkish military has had success in the past with bullying its neighbors (in that case Syria) by projecting military strength on their borders.

Unless they are completely gripped by hubris, General Büyükanıt and friends must have learned something from the US military's haunting experience in Iraq and even the Israeli army's most recent foray into southern Lebanon. With these two events in mind, it appears highly unlikely that the Turkish military could deal an enduring tactical blow to a very evasive and malleable guerrilla foe like the PKK. At the very least, the PKK can go underground in order to fight another day.

Furthermore, prime minister Erdoğan must be very careful about the expectations he defines for any type of military venture. As George Bush has demonstrated over the course of his tumultuous tenure as president, the military expectations of the public can have serious political repercussions when deaths and casualties mount.

Northern Iraq, domestic: A significant percentage of Kurds have probably disassociated the PKK from the struggle for an independent Kurdistan. Nevertheless, the PKK still possesses a great historical legacy that includes funding-ties to governments and organizations, who traditionally oppose Turkey. Indeed, the PKK has been of great help to Iran and Syria in destabilizing Turkey and it is widely argued that the likes of Greece and Armenia have supported the PKK in the past. It is therefore little wonder that the relatively new Kurdistan Regional Government (KRG) has never appeared to have the ability to dislodge a political dinosaur like the PKK.

While the KRG and others are probably more widely associated with the fight for an independent Kurdish state at this time, a Turkish invasion of northern Iraq would probably blur this distinction. The presence of Turkish troops on Iraqi soil would likely increase sympathy among Kurds for the PKK cause. Assuming the Iraqi government in Baghdad proves incapable of providing any support, which would most likely be the case due to their current level of frailty, the Kurds in N. Iraq would gain even more resolve to pursue their own state in order to better protect their interests.

Turkey, domestic: An invasion of Iraq would almost certainly cause a very sharp rise in PKK sympathies among the large numbers of economically marginalized Kurds living both in the east of Turkey as well as the larger numbers living in Turkey's western cities. This is a particularly scary thought if viewed in the context of the rising popularity of neo-fascist and nationalistic groups, which was most recently evidenced by the MHP gaining ground in the July parliamentary election. The AKP was a surprisingly popular choice of the Kurdish vote in July, and neither Erdoğan nor Gül would want to compromise this vote or give the country's right-wing any more reason to disrupt the social peace.

Conclusion: In the view of this observer, the numerous big-picture issues strongly rival the more widely-reported short-term political reasoning for a full-scale military assault in northern Iraq. An invasion would most likely further destabilize Iraq. It would furthermore cause social and political unrest within Turkey, which would not bode well for the political fortunes of the AKP. It is for this reason that such a large-scale invasion is quite unlikely. Like Gareth Jenkins, I believe it is much more realistic that there will be narrowly-focused commando raids and aerial strikes, if anything at all. This approach ultimately represents the safer political course for Turkey's political leadership.

Considering the Turkish Economy and the Conditions of its Success

The Turkish economy is currently moving at full throttle. Not since the privatization reforms of the venerable Turgut Özal has there been such a sustained stretch of economic progress. While the average Turk will point to the fact that unemployment, which probably unofficially hovers at 14-16%, remains a sizable dampener to overall well-being, a considerable cross-section of Turkish society would nonetheless agree that the country's economy is enjoying unprecedented prosperity.

Taxi drivers in Istanbul and even the heads of conglomerates will tend to point to the same rationale for this long period of positive growth: the political stability experienced under the AK Party. There is little dispute that Turkey's current period of economic success correlates nicely with the starting date of the AKP's leadership of the Turkish political system. In a country that is accustomed to military coups, hyperinflation and dramatic terrorist attacks, the AKP's tenure has been quite serene by Turkish standards. This point was not lost on the AKP during the July parliamentary election and Abdullah Gül's subsequent successful bid for president. Many Turks voted for the AKP simply due to economic issues and not as a result of the party's much ballyhooed portfolio of social views.

These calm conditions have given foreign investors cause to increasingly reward Turkey with much needed sources of investment. Foreign capital inflows have been quite often directed toward the very large number of government assets, which the AKP has aggressively sought to privatize. The growth of exports have also played a prominent role in the country's economic resurgence. According to the head of the Turkish Congress of Exporters (TIM), Turkey's exports exceeded $100bln during the past 12 months for the first time in the country's history. Exports of automobiles took the lead, followed by clothing and textiles and steel-iron in a distance third.

The numbers would indeed seem to indicate that AK Party is doing something correct. However, "the numbers" only tell a small sliver of the entire story as is often the case. In addition to the AKP's adept management and calming presence, one must also consider certain other factors that have equally contributed to the situation.

There has been a great prevalence of "petrodollars" in the Middle East looking for "shariah-compliant" homes for investment. Under the unprecedented political auspices of the religiously conservative AKP, Turkey emerged as a much more viable option for this capital. In this regard, the Turkish economy of the AKP era has been a direct beneficiary of the oil-crazed world and its oil market. Second, the availability of inexpensive products from China has also had a great influence on the Turkish economy. In addition to increasing the buying power of the Turkish consumer, cheap Chinese products have so far been a benefit to the non-textile sectors of the Turkish economy. This has particularly been the case for the outsourcing of component parts, which are used for goods manufactured in Turkey.

All of this should be reconsidered in the increasingly gloomy shadows cast by the foreign trade deficit, which Turkey currently maintains. In addition to considerable spending in the public sector, Turkey's great affinity for imports is strongly driven by its energy consumption needs. While this situation is more palatable during periods of reliable foreign investment, the continued strength of such inflows is certainly ephemeral.

In the opinion of this observer, it is time for the AKP to stop riding on its somewhat false laurels concerning economic management. The AKP must instead use its strong political mandate to take the types of tough measures, which are necessary to cushion the Turkish economy's inevitable descent into more turbulent economic waters. If the AKP chooses not to take such steps, it will eventually find itself in equally hostile circumstances.

Abdullah Gül's Upcoming Constitution Proposals: Looking at the Glass Half-Full

Now that the Turkish upper classes have returned from their sacred beach holidays and cool winds have at last prevailed on the torturous summer temperatures, Turkey watchers are settling in to observe what should prove to be a rather protracted debate. Turkey's man of the hour, Abdullah Gül, will drop his first bomb shell during the next few weeks. The country's secular elite is more than ready to sound the alarm while the ever enigmatic Turkish military bides its time in the shadows prepared to pounce at any moment.

The substance of this impending commotion will be directly related to Gül's plans to reform the Anayasa, which is Turkey's constitutional document. The spirit in which he plans on carrying out these reforms, as well as some of the particulars of his plan, has been neatly outlined an article from this weeks Economist.

Yet the 56-year-old former economist [Gül] hinted at a looser interpretation of Turkey's unique brand of secularism. Until now this has been defined by Ataturk's renunciation of Islamic symbols and rigid state control over all aspects of religious life. Secularism, said Mr Gul, was a precondition for “social peace” but also offered a model “for different lifestyles”. Some seized on his words as proof that he will support loosening restrictions on the headscarf and religious education.

As Mr Gul approved a new pro-EU cabinet this week, another clash loomed over a “civilian” constitution that Mr Erdogan proposes to adopt next year to replace the current text, written by the generals after their last coup in 1980. Draft clauses leaked to the media are nothing short of revolutionary: senior officers will no longer be immune from prosecution in civilian courts, military appeals courts will be scrapped, Kurdish will be taught as a second language in government schools and the definition of Turkishness will be expanded to embrace citizens from different backgrounds and creeds.

Almost all of the issues above strike at the heart of the national psyche and generally define the way any given Turkish citizen perceives their country. The idea of "social peace for different lifestyles" , whether they be ethnic or religious, is an extremely sensitive one. Particularly among pro-secular and prosperous segments of society, there exists a very strong conviction that there is a single secular, Turkish model by which all citizens of Turkey should abide. When the point is made that certain segments of the country's society, such as the Kurds, might have a different orientation toward "their country", a commonly heard refrain is that, "We are all Turkish people and there is no reason why we shouldn't live together in harmony."

From the perspective of this observer, the idea of Gül's initiative to achieve legal tolerance for other lifestyles is extremely attractive in theory. Particularly in the realms of education and freedom for cultural expression (including language), there are many segments of Turkey's population, which are explicitly denied the types of opportunities that one takes for granted in Western Europe. Indeed, one could argue that if these segments of the population, which exercise alternative lifestyles or cultures, were not the victims of a political agenda, they would cease to represent such debilitating political issues.

For example, less than a decade ago it was legally forbidden to speak the Kurdish language in public. Did not the easing of this restriction help relations between Turkey and its largest ethnic minority? Would not the continuation of this trend as proposed by Gül further augment the level of content felt by Turkey's Kurds?

Similarly, scholars have often wondered whether there is a correlation between the traditional campaign waged by the Turkish government against head scarves and the increasing numbers of Turkish women, who choose to wear head scarves as a political statement. Perhaps an easing on this issue would actually diminish the use of the head scarf as a political issue over the longer term.

These would all be positive developments if it is indeed the case that Abdullah Gül's true intention is to make Turkey a more tolerant of its multiple cultures or "lifestyles". However, it remains to be seen whether his real agenda is in fact religious in nature; a near-term goal to make Ataturk's secular nation more tolerant of other persuasions in order to fulfill a long-term goal of becoming the next Iran.

Whatever the intentions of Turkey's new president, it is the sincere hope of this observer that the Turkish military gives Gül the benefit of the doubt in the near-term at the very least. Anything short of such restraint by the military would make a further mockery of the institution of democracy in Turkey.