Home Research Briefings 9 September 2014 News Round-up
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9 September 2014 News Round-up

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Photo credit: International Business Times, www.ibtimes.com

This week Turkey’s new government has set out next 10 months’ political agenda ahead of general elections next year. PM Davutoglu reaffirmed President Erdogan’s priorities with regards to the fight against ‘the parallel state’ whilst concerns over independence of judiciary remain and detentions of several senior police officers who were involved in December 2013 graft probes against the previous government have been criticised. A possible coalition and Turkey’s position against Islamic State (IS) have topped the agenda in the NATO summit in Wales to which President Erdogan attended and met US President Obama. Inflation has remained much higher than the Central Bank’s target of 6.7% – 8.5% and Purchasing Managers Index (PMI) increased to 50.3 in August and indicated an expansion in manufacturing sector after two months of contraction.

[tabby title=”Domestic Politics”]

PM Davutoglu announced new government programme

New government’s agenda for the next 10 months ahead of general elections have been announced. The AKP’s ‘New Turkey’ vision highlighted the following;

  • The Kurdish resolution process; The Kurdish resolution process is said to carry on and a new road map will be set out in the coming months.
  • Presidential System; the current constitution will be changed to install a presidential system to boost the powers of the presidency
  • Accession to the EU; The government will also concentrate on Turkey’s accession to the European Union with further reforms and improvement in relations with the EU.
  • ‘Parallel State’; The government’s battle against the ‘parallel state’ and determination to purge the allegedly Gulen followers of state bodies remained as a priority of the government.

December 2013 Graft Probes and the ‘Parallel state’ in the judiciary and the police force

Erdogan’s son and 95 other suspects of corruption probes that were instigated in December 2013 have all now been ‘acquitted’ although the suspects have not been tried by a court. Prosecutors’ Office declared that there is no legal ground for prosecution of these suspects as the intial prosecutors named Erdogan, the then PM, as a head of an illegal organisation. This, current prosecutors added, demonstrated the corruption investigations were only an attempt to overthrow the government. The former prosecutors and a judge who had issued court orders on these probes have been investigated by Minister of Justice himself. 

Judicial independence occupies the government’s agenda due to concerns over presence of Gulen affliated judges and prosecutors within judicial bodies. Recently appointed PM Davutoglu and Minister of Justice, Bozdag, met a group of judiciary officials to discuss the threat of ‘parallel state’ within judiciary. President Erdogan who had not attended the opening ceremony of the new judiciary year stated that the independence of the judiciary is important, however, impartiality of the members of the judiciary matters highly. The Head of Constitutional Court, Hasim Kilic, urged the government to leave the judiciary in peace for it to correct its own problems. Kilic claimed that the members of the judiciary have been charged without adequate evidence in the last months.

Several senior police officers have been detained for allegations of wire-tapping and plotting against the government. The first detention took place on 22 July 2014 and two more sets of detentions followed. The detentions are considered to be part of a greater attempt to thwart the ‘parallel state’ of alleged Gulen followers within the police force and the judiciary. These police officers were involved in the above-mentioned graft probes against some members of the government, former PM Erdogan and his family.

The CHP’s extraordinary convention has kept KIlicdaroglu in power

The main opposition party, Republican People’s Party (CHP) has held an extraordinary convention where the party members voted to conclude Muammer Ince’s challenge to the existing leader of the party Kemal Kılıcdaroglu. Muammer Ince was the party’s parliamentary group deputy chairman until he resigned to run for the presidency of the party. After the voting, Kilicdaroglu remains to be the leader of the CHP winning more votes than his opponent. The extraordinary convention came about after CHP’s unsuccessful election results first in the local elections in March 2014 and the Presidential Election in August 2014.

HDP’s Demirtas suggested sending arms to the PKK

Co-leader of the People’s Democratic Party (HDP), Demirtas, suggested that Turkey should consider sending arms to the Kurdistan Worker’s Party (PKK) in their fight against Islamic State (IS), formerly known as ISIL in Iraq and Syria. The PKK is, however, recognised as a terrorist organisation by the Turkish state as well as the US and Europe. Demirtas commented that his party expects further constructive steps by the government in the Kurdish peace process.

[tabby title=”Foreign Policy”]

NATO summit and IS

President Erdogan attended the two-day NATO summit in Wales where the main topics of discussion were the Russian involvement in Ukraine and the advancement of Islamic State (IS) in Iraq. Turkey’s role in the international coalition against IS has been a big question mark, and no concrete decisions regarding Turkey have been made. According to President Erdogan’s statement to the media;

  • The details of the NATO international coalition against IS is not clear yet;
  • Turkey has deported certain individuals who wanted to pass through its borders to Iraq and Syria. Erdogan himself was not accused of allowing Turkey to become a “jihadist passage”;
  • Erdogan demanded the deportation of Fethullah Gulen from US to Turkey. Currently, Turkey is providing all the evidence and reports on Gulen to US authorities;
  • Erdogan has also brought to the attention of the German Chancellor Angela Merkel the recent claims that the German intelligence organisation has been eavesdropping on Turkey. Both leaders have decided to consult their intelligence organisations regarding the subject.

American Defense Minister Chuck Hegel visited President Erdogan and Prime Minister Davutoglu. The meetings centred around the role that Turkey can and will play in the international effort against the IS advancement. The situations in Libya, Ukraine and Syria were also discussed.

According to the British Prime Minister David Cameron’s statements, Turkey is concerned about the cross border activity of fighters operating in Syria and Iraq and has asked for assistance and cooperation from the UK in ensuring the security of its borders.

Negotiations with China over missile system fell through

Turkey has been negotiating with China to buy long-range missile defence system from the country. However, after these talks fell through, Turkey is turning to France for the purchasing of these items. It is said that US and NATO officials were not comfortable with Turkey’s collaboration with China in this matter, due to concerns over compatibility of weaponry and security.

For more information on the accusations against Turkey regarding the passage of extremist fighters to Iraq and Syria, wait for the soon to come out CEFTUS Insights special report on “Islamic State (IS) in Turkey”

[tabby title=”Economy”]

Inflation on the rise

Headlines in Turkey featured the inflation figures that have been resilient against the monetary policy of the Central Bank of the Republic of Turkey (CBRT). According to data released by the Turkish Statistics Institute (TURKSTAT), consumer prices increased by 0.09% and producer prices by 0.42% in August, compared to the previous month. In contrast to traditional trends of lower inflation levels during the past summers, this year inflation kept its course of high levels and further increased in August to 9.54% annually. In this sense, annual increase in inflation remained much higher than the CBRT’s target of 6.7% – 8.5%.

The CBRT also released the minutes of its Monetary Policy Committee (MPC) meeting, which was held on 27 August, in which the benchmark rate was kept at 8.25% and upper corridor of the overnight lending rate was cut down to 11.25% from 12%. The significance of this rate cut was conceived as the result of improvement in external funding and volatility in the exchange rates by the market, the CBRT narrowed down its space for a maneuver in case of an external shock in the financial markets. However, it should be reminded that the credit rating agency Fitch warned emerging markets for increasing market volatility if FED (Federal Reserve) increases its interest rates from mid-2015 onwards. In its base scenario, Fitch expects that FED will increase the rates up to 3.75% towards the end of 2017 and this might impact the credit ratings and external financing of emerging countries including Turkey, Mongolia, Lebanon, Hungary, Jamaica and Ukraine.

The CBRT also noted in the minutes that the negative effects of exchange rates on inflation are gradually fading away as such effect decreased from 3 points in April to 2.5 points in July. The committee emphasised the increasing food prices due to draught this year and its impact on inflation.

Equally important as inflation, data related to production must be addressed as well. According to date released by Markit, Purchasing Managers Index (PMI) increased to 50.3 in August and indicated an expansion in manufacturing sector after two months of contraction. However, PMI still remained lower than the annual average of 51. The limited increase in the index is mainly due to increasing exports. The head of the Turkey Exports Chamber, Mehmet Buyukeksi, also confirmed the increasing export demand from the EU and improvement in the countries that were previously under high geopolitical risks. Accordingly, exports increased annually 5.2% to USD 111.1 billion in August.

[tabby title=”On a different note”]

  • The police officer Ahmet Sahbaz who killed Ethem Sarisuluk during the Gezi Park protests in 2013 has been sentenced to 7 years 9 months imprisonment. According to Sarisuluk’s lawyers, the evidence shows that Sahbaz shot Sarisuluk who was unarmed three times to defend himself from stones thrown at him.
  • 10 workers were killed in an accident in a construction site, which caused outrage with regards to safety regulations in place. Several unions protested the deaths outside the construction site, the police responded with water tanks and tear gas.
  • According to the Assembly of Workers’ Health and Work Safety, 272 construction workers died in the past 250 days. 57% of these men died because they fell whilst working. Almost all of these workers were employed as subcontractors.
  • Women all over Turkey protested against the actions of Islamic State (IS). Protests were held in Ankara, Adana, Antalya, Artvin, Batman, Bodrum, Bursa, Dersim, Diyarbakır, Eskişehir, Hatay, İstanbul, İzmir, Kocaeli, Mersin, Samsun, Sakarya, Sinop and Sanliurfa condemning the conflicts in the Middle East and the crimes committed against women. The protests were bannered under “Women in the Middle East are not Alone”.

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