BEYOND THE BOSPHORUS: Turkey needs new elections like a hole in the head

By bne IntelliNews August 17, 2015

Suna Erdem in London -


When my son first started at primary school he would complain that he spent playtime sitting all alone on the euphemistically-named “friendship bench”, as no one would come and talk to him. A quick survey of other parents revealed that all of his friends had been saying the same thing. “Come on,” we rebuked them. “You can’t all have been alone on the damn bench at the same time!”

I was reminded of this when observing the disarray in Turkey after the June 7 election threw up the need for – gasp – cooperation among politicians. Watching the squabbling bunch fail to form a coalition, then start preparing for new elections just five months later, I was tempted to scold them: “Come on, it can’t always be the others’ fault! And if there’s another election, you can’t ALL win more votes.”

For a country that was once the region’s rising star – one that managed to survive the global financial crisis relatively unscathed – the picture is a depressing one. Deja vu seems to be the phrase du jour. Uncooperative political parties playing the blame game and failing to form the stable coalition demanded by election results; a resumption of hostilities between Kurdish separatist rebels and the Turkish military in the southeast, with the accompanying daily cricket score of deaths (military ‘martyrs’ vs Kurdish “terrorists”); attempts to lift the parliamentary immunity of Kurdish MPs and send them to jail; tourism hit by war and mayhem on Turkey’s borders. It’s all so very 1990s. And all after what now appears to have been a series of golden years when such behaviour was believed to be a thing of the past.

The one major difference today from those lost years is the economy. The lira is losing value, but not at 80% a year. The stock market is lower, but it hasn’t crashed. Interest rates are creeping up, but the 1,000% overnight rates that once appeared in the 1990s still seem a distant and somewhat incredible memory. The relative lack of panic is being taken as a sign that Turkey’s finances are in better shape than ever and that it is not expected to plunge into crisis. It hasn’t yet, but the political mess could dangerously change that dynamic.

We need to talk about Erdogan

The coalition talks never seemed to have any seriousness about them. Prime Minister Ahmet Davutoglu and his Justice and Development Party (AK) had more than 40 hours of meetings with the main opposition Republican People’s Party (CHP), to no avail. When Davutoglu had supposedly last-ditch talks with CHP leader Kemal Kilicdaroglu on a balmy evening in August, newspapers dwelled on their dinner menu (okra, rice and steak with a berry dessert, in case you’re wondering) and reported the discussions they had had about art, such was the lack of useful information or political substance. Davutoglu later claimed the parties were too far apart on education and foreign policy. Kilicdaroglu said AK never offered a proper, long-term coalition deal. The two other parties, the nationalists and the Kurds, ruled themselves out right from the start.

PM Davutoglu was at least credited with wanting to form an alliance to escape the long shadow of President Recep Tayyip Erdogan, AK’s strong-willed founder. He said he was under so much pressure that his own side called him a traitor for even talking to the CHP. The winner is undoubtedly Erdogan, who wants new polls in the hope that AK would gain 18 more seats and govern alone again. This could keep alive his hopes – dashed once already at the ballot box – for turning Turkey into a presidential republic with his good self at the helm. What the opposition parties hope to achieve with their own intransigence, nobody really knows.

Nail Olpak, the head of the normally pro-government trade group MUSIAD, is in despair. A plague on all their houses, he says. A second inconclusive election to be held in November, followed by further coalition talks, could mean 2016, as well as 2015, is lost in terms of any meaningful economic progress: “There’s no crisis but there is stagnation. The region is hardly a bed of roses. It’s unclear whether Greece will go bankrupt. I don’t think you have the luxury, as things stand, to say ‘my economy is strong so I can string things along’. We’ve told all the parties – if you drag this out, whichever government emerges will take charge of a blocked system.”

And if there was any doubt about the potential harm, veteran financial writer Zulfikar Dogan has been hard at work with his calculator. He cited a government report estimating the economic losses from the Kurdish war between 1986 and 2012 at $1.2 trillion. The government had to borrow billions to finance its growing defence budget and would have to do so again now. Dogan reckons the violence between July 20, (when Turkey responded to a suspected Islamic State-backed attack with all-out war on both the Islamists AND the PKK) and August 5 has cost the country up to $55bn because of a sharply weaker lira, higher interest rates and lower export and tourism revenues. The more the conflict escalates, the more the bill will increase.

An unnecessary second election budget of TRY600mn ($215mn) is feeding into a recently stuttering economy. The Istanbul stock market has lost 20% of its value this year. Individual and private sector borrowing is high and very vulnerable to instability, while the consumer boom that has carried AK’s economic renaissance is suffering as people shun shopping malls for fear of terrorism. The government’s desire to return to a majority could also lead to expensive election bribes. As one analyst said, Turkey needs new elections like a hole in the head.

What its petulant, childishly arguing politicians need now is a clip round the ear.

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