ISTANBUL BLOG: Turkey braces for epoch-making referendum

ISTANBUL BLOG: Turkey braces for epoch-making referendum
There is no doubt that referendum day will one way or another be “epic” for Turkey.
By bne IntelliNews April 14, 2017

It’s been relentless wall-to-wall Recep Tayyip Erdogan in Turkey for the past several weeks. Now, in the constitutional referendum on April 16, voters of this nation of 80 million will finally get the chance to ask for one of two things: the elevation of their already dominant president to a more powerful position than enjoyed even by Mustafa Kemal Ataturk, the founder of the modern Turkish Republic, or the slapping down of his grand ambitions.

Erdogan, who has been in power as premier or president since 2002, could stay in charge until 2029 if the constitutional changes are passed, with few checks on his power.

Many polls have the ‘Yes’ camp at the very least edging it over the ‘No’ campaign. Such surveys are, however, notoriously unreliable in Turkey; meaning citizens, investors and politicians can only nervously await the voters’ decision on whether parliament should be relegated in favour of an executive presidency with vast power.

President Erdogan’s ruling Justice and Development Party (AKP) and its Nationalist Movement Party (MHP) ally have been calling on Turks to back what could be epoch-making change amid the state of emergency that has been maintained since the abortive coup that was put down in July of last year. The debate on what road is best for Turkey has also taken place amid economic decline that threatens to spread and accelerate. Consumers are experiencing eroded purchasing power amid high inflation and a tumbling currency.

Then there is the perpetual threat of further waves of terrorism, which has made a painful impact on the country’s tourism industry, as well as heated rows with European Union capitals that have descended to the point where Erdogan has made “Nazi” jibes. Eating away at the population are concerns such as whether Ankara’s economically crucial relationship with Russia really can be repaired, and worries over whether a satisfactory solution to the Syrian conflict, and the associated dilemma of Kurdish separatist influence, can be found.

There is no doubt that referendum day will one way or another be “epic” for Turkey. Hence the frustration of opposition figures who complain that they have been denied the chance to make their case to the potential 58 million voters on a level playing field. Indeed, Selahattin Demirtas and Figen Yuksekdag, leaders of the leftwing pro-Kurdish People’s Democratic Party (HDP), and a number of other prominent MPs, have been swept up in the massive purge launched following the coup and are sitting in jail. Also purged are more than 100,000 civil servants perceived as in some way supportive of the failed putsch.

What’s more, amid the tense atmosphere more than 100 media outlets have been shut down, or have opted to curb their output. Jail terms of 43 years are being sought for "terrorist-supporting" opposition daily journalists, while after the incarceration of a Turkish-German journalist, Amnesty International in March warned that the Turkish free media “is in its death throes”.

The main opposition party, the Kemalist and social democratic Republican People's Party (CHP), has accused the AKP of deploying state resources to boost the ‘Yes’ vote. Little airtime has been given to the opposition to get its messages across to the electorate, the party also protests.

For its part, the government denies any suggestion of an indiscriminate crackdown on dissenters. It claims that any journalists who have found themselves imprisoned are members of illegal organisations such as the Kurdistan Workers’ Party (PKK) or are supporters of US-based cleric Fethullah Gulen, the man whom Ankara accuses of planning the coup attempt. Banned media outlets are simply mouthpieces of the PKK and the Gulenist network, ministers contend.

Despite the sound and fury, Turkey’s markets have remained relatively undisturbed in the run-up to the historic popular vote: the main stock exchange index, the BIST-100, has risen more than 16% since the start of the year. It grew 2.1% between March 1 and April 11.

The lira, which lost 17% of its value against the dollar last year, has weakened a further 5% so far this year, but it has firmed a little in recent days. The currency was trading at 3.66 by the end of trading on April 13, having been at 3.73 two days prior.

Ironically Erdogan himself has helped destabilise the market by insisting, in the face of economic orthodoxy, that banks open the credit taps, despite the difficulties posed by high and growing inflation.

Perfect president or impostor?

With so little clarity over what a vote one way or the other will bring, despite the round-the-clock media coverage, great numbers of voters feel that their decision will necessarily amount to a gamble. Mevlut Ickedal, a 52-year-old appliances merchant from the tiny Anatolian town of Keskin, is perhaps a typical example of the swathes of voters a little overwhelmed by the decision. He told Bloomberg on April 11: ““Sometimes I say Tayyip Erdogan is the perfect man and sometimes I feel he’s the ultimate impostor. I’ll vote ‘Yes’ because I don’t see anyone else who can govern this country. Either Tayyip will get us out of this mess and take us to the top, or Tayyip will bring us down."

The president himself certainly betrays no hint of self-doubt in offering to lead Turks to the promised land. Banners with his face hang from mosques, bridges, construction sites and all manner of buildings across the nation.

The ‘Yes’ camp promises a “New Turkey”, with a new constitution that gives Erdogan the chance to rapidly and effectively address the nation’s woes. Reflect, Erdogan and the party urge voters, on the numerous shaky coalition governments that have undermined Turkey, resulting in poor economic growth. Their contention is that an executive presidency, amid torrid times, will help those in office take firm control and implement policy decisions much faster to unleash the country’s economic potential.

Erdogan has long argued that Turkey’s poor and pious majority have suffered for decades at the hands of the country’s secularist elites – the military, the judiciary, the bureaucracy, and the business community. The way he tells it, the people will be newly empowered if they vote for the proposed new constitution.

If adopted, the executive presidency would do away with the office of prime minister. The president would appoint ministers and he would be allowed to retain ties to a political party of his choosing. In the past, the presidency was merely ceremonial and the head of state was obliged to cut any links to political parties.

Under the new system, the executive president would draft the budget and would have the power to issue decrees. Parliament’s contingent of MPs would rise to 600 from the current 550 and the national assembly would have the legal authority to investigate the president for any alleged crimes. At present, the president can only be prosecuted if he commits treason.

The new constitution would also mean parliamentary and presidential elections being simultaneously held every five years, and the president would assign and dismiss senior public officials.

The president would be limited to serving only two terms in office but he would not be exposed to facing any potential vote of no confidence.  The ruling party, however, claims this won’t be a problem because “the nation’s will shall be directly reflected in the government”. “With the people electing the president, he/she is given the vote of confidence to form the government for the following 5 years,” the AKP adds in a pamphlet published on its website.

Yes, unless there’s a hidden No

Online betting sites are giving the ‘Yes’ camp the edge. According to betbreakingnews.com, it has a 76.92% chance of winning. Sportsbet.com gives odds of 1.30 (‘Yes’) and 3.16 (‘No’).

But, Erdogan, a skilful political strategist adept at pressing the right buttons to rally support, takes no chances when it comes to elections. He has sharpened his nationalist rhetoric and the strategy seems to have turned the tide in favour of a positive outcome for him.

Anar, a well-known polling company, puts ‘Yes’ at 52% and ‘No’ at 48%. Metropoll, another respected pollster, has the race exactly neck and neck at 50% to 50%. Konsensus puts ‘Yes’ on 52%.

Perhaps more interestingly, Gezici, a polling firm seen as close to the opposition CHP, revealed that its latest survey - conducted over April 1 and April 2 - gave ‘Yes’ 53.3%.

“Nationalist sentiment has gained traction after the failed coup attempt last year. But the opposition has not benefited from this nationalist environment as it has failed to create a convincing narrative,” Gezici suggested.

The guessing game over the likely result remains in full swing, nevertheless, because the opinion polls have yet to indicate anything like a landslide victory for Erdogan and the AKP.  The ruling party took nearly 50% of the vote in the November 2015 general election while the nationalist MHP, AKP’s ally in the initiative to change the constitution, garnered 11%. The assessed support for ‘Yes’ thus remains below their combined vote of 61%.

It looks like Erdogan has managed to consolidate AKP’s supporter base but Devlet Bahceli, the leader of the MHP, has singularly failed to achieve that among his party’s grassroots. The MHP has been embroiled in an internal feud since the last general election. And many pollsters suggest its traditional voters remain deeply divided over how to vote in the referendum.

The other key element that will determine the outcome of the popular vote is the undecided voters, usually estimated at between 4% to 10% of the electorate but put as high as 20% by some surveys.  It remains to be seen whether the undecided will turn out at the polls on Sunday or instead opt to stay at home, at the risk of a fine for not voting. Given the nervousness pervading society amid the huge purge, analysts have also not written off the chance of there being a substantial ‘No’ vote which is not recorded in the polls.

“It’s difficult to have a very strong view about the results, but 'Yes' looks more likely,” Morgan Stanley said in a report published on April 5.

William Jackson at Capital Economics agrees that it is difficult to predict the outcome but that a win for ‘Yes’ looks more likely.

“On balance, our view is that ‘Yes’ is better positioned to prevail (60% chance),” Jackson wrote in an emailed commentary on April 7.

Defeat not fatal

With tens of millions of Turks set to vote this weekend, one group of people will have their own particular set of anxieties: investors.

The government is arguing that under the new presidential system it will be able to deliver long-delayed economic reforms that will address the country’s key problems, such as the current account deficit, inflation and unemployment.

“We will accelerate the reforms by May,” Deputy PM Mehmet Simsek said on April 10, Hurriyet Daily News reported.

“We have prepared these reforms but we have not had the chance to implement them systemically. These reforms will improve the investment climate and will include tax and judicial reforms,” he added.

Once the referendum removes political uncertainty, Turkey's long-term outlook will clearly turn positive, according to the minister.

But some observers remain less than sure that the political uncertainty will dissolve. “Most of the other powers envisaged by the constitutional changes will come into force only in November 2019, after simultaneous presidential and parliamentary elections. This long transition period raises the risk (currently at 30%) that Erdogan could push for snap elections with the aim of shortening this interval and increasing the AKP’s parliamentary majority,” wrote William Jackson at Capital Economics.

“A victory for the ‘No’ camp would represent a humiliating but not fatal defeat for Erdogan. Nevertheless, it would trigger further political turbulence as a cabinet reshuffle and, most importantly, a snap parliamentary election would likely be on the agenda,” Jackson added.

The local wisdom is that it is very unlikely that the government would collapse or that the AKP would disintegrate if ‘No’ turns out to be the people’s verdict. Erdogan, it is thought, would stand steadfast.

Moreover, the AKP would be reluctant to call a snap election in a nation suffering from election fatigue and less likely to provide it with the desired result.

“What we know at this stage is that politicians from both camps have already expressed their intention to move for an election [after the standard time cycle] in November 2019. Although the level of our conviction has fallen recently, we still think that an early election is less likely in the 'Yes' scenario,” concluded Morgan Stanley.

 

 

 

 

 

 

 

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