David O'Byrne in Istanbul -
Prime Minister Tayyip Erdogan may have ended years of speculation by finally announcing his candidacy in Turkey's first popular presidential election to be held August 10. But questions remain about what exactly he plans to do with the post if he wins, and if he takes the country toward an executive presidency, how that would affect the economy.
Three candidates will contest the election, with Erdogan pitched against a joint candidate from the two main opposition parties, Ekmeleddin Ihsanoglu, who is a former academic and diplomat, and Selahattin Demirtas standing for the mainly Kurdish People's Democracy Party. Even so, few doubt that Erdogan will emerge victorious – although possibly not with his hoped-for full majority on the first ballot.
Despite constitutional limits on the power of the president and a nominal ban on being a member of a political party or active in party politics, as well as the long-standing tradition of the president as head of state being disconnected from the day-to-day administration of the country, Erdogan has already indicated he doesn't plan to take a back seat. "I'm not leaving you. I'm not pausing to serve. I'm not going to rest. On the contrary, I'll be nominated to a higher post to better serve you, my country and my nation," he announced in his first campaign speech.
Many have seen that statement as indicating that Erdogan has plans on an executive presidency. "He has a grand design and wants to lead the country for another ten years in the style of Putin," believes Cengiz Aktar, professor of political science and senior scholar at Istanbul Policy Centre, suggesting that Erdogan will probably form a "kitchen cabinet" of advisors and bypass parliament ahead of next year's parliamentary election.
That parliamentary election will see the Justice and Development Party (AKP) trying to win an overall majority that would allow it to change the constitution for the formal adoption of an executive presidency, he suggests.
In the meantime, many analysts predict that current President Abdullah Gul may return as leader of the AKP – the party he and Erdogan founded in 2001 before sweeping to power the following year. This is a move Gul himself has apparently ruled out, but which many see as preferable to the promotion of a less powerful figure from the AKP to serve as party leader and prime minister.
Return to the past
If proved correct, the move to an executive presidency would be a somewhat ironic turn of events. It is little over three years since the "Arab Spring" was promising to sweep away the aging dictators in the Middle East and Turkey was being held up as a shining example of a Muslim country with a genuine, functioning representational democracy.
Turkey, a majority Muslim state which overcame decades of instability and military interventions to emerge with a genuinely popular government whose roots were in Islam but functioning through democratic institutions, has overseen economic growth rates that western democracies can only dream of.
Sidelining the legislature though carries its own risks, especially for the economy and especially if the AKP continues with its policy of forcing deputies and ministers to retire after three terms. This rule, recently confirmed at a party congress, will see popular and effective ministers such as the Deputy PMs Bulent Arinc and Ali Babacan, Finance Minister Mehmet Simsek and Energy Minister Taner Yildiz all stand down at the next election. "Babacan has been in the job for ten years, Simsek is well known in London financial circles. I'm not saying they are doing an outstanding job, but they have earned investors' trust," explains Emre Deliveli, economic columnist on the local English-language daily Hurriyet Daily News, adding that the same level of trust extends to the head of the central bank, Erdem Basci, and the treasury undersecretary, Ibrahim Canakci.
"I can't see anyone in the AK Party to replace them who will make investors happy," Deliveli cautions.
And for an emerging market such as Turkey still heavily dependent on foreign cash flows, confidence in the handling of economy is key, especially in a global economic environment where the "tapering" of the US Federal Reserve's money-printing operation is making more limited investment flows that much more selective in their choice of destination. "Over the past decade, most emerging markets could grow without doing much more than channel money from abroad," says Deliveli, noting that since 2007 Turkey's growth has actually lagged behind the average for emerging markets.
"The indications are that liquidity is not going to be plentiful in the next decade and emerging markets need to undertake serious structural reforms," he adds pointing to the importance for Turkey of truly independent institutions and the recent slow pace of structural reform.
That slowing of reform and continuing questions over the independence of the central bank and other regulatory bodies in the face of government intervention are issues that have increasingly troubled analysts and commentators, who question whether the current political agenda adequately reflects the country's needs. "It is not about ruling Turkey, it's not about the government, it's not about democracy – it's increasingly about the future of one person," cautions Aktar.
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