4 February 2014 News Roundup

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This week restrictions on internet freedoms have occupied Turkey’s agenda before debate on draft bill in the parliament on the 4th February. The trial of Ali Ismail Korkmaz, a 19 year old who was beaten to death during the Gezi Protests, has begun amidst high-level state security. Conflict between PM Erdogan and Gulen continues to escalate. Foreign policy has again been concentrated on Syria, with the Turkish army attacking a rebel convoy outside its borders. In terms of the economy, fluctuations in the value of the Turkish Lira and the Central Bank’s decision to increase interest rates have dominated the agenda. High-level official visit from Turkey to Iran marked the importance of relations between the two in terms of economic and political interests.

Freedoms regarding online activity have become a significant point of contention, as accusations of increased authoritarianism attack the government’s proposed law.

Turkish Law No. 5651 concerning internet content in Turkey, which came into force in 2007, has been under debate in the parliament and proposed amendments had caused protests in Ankara and Istanbul in January. It emerged this week that the law would enforce every broadband provider and internet cafes keeping records of internet users and applying a strict filtration system. Such legislation would provide new penalties on authors, users and content providers.

Meanwhile, a website, vagus.tv, was blocked for five days without a rule of court by TIB although the proposed amendments have not come into force yet. The website founder stated that the blockage was due to the news regarding the corruption probe on the website.

Recently, amid scandalous investigations, National Intelligence Organization (MİT) official Ahmet Cemalettin Çelik was appointed to become the head of Turkish Telecommunication Directorate (TIB) in charge of regulating internet in Turkey. Soon after, TIB officials received special immunity against any criminal investigation unless TIB president and concerning ministers gave permission. Daily Radikal reports that TIB staff has doubled in the last month.

In relation to this debate, a Republican People’s Party (CHP) MP, SezginTanrukulu, submitted a parliamentary question to PM Erdogan on the closure of soundcloud.com and the number of websites closed since 17th December graft probe. Similarly, CHP Deputy Head Umut Oran published a parliamentary question on his personal website regarding phone records between PM’s son Bilal Erdogan, some ministers and businessmen on the sale of ATV-Sabah. Turkish Telecommunication Directorate (TIB) sent a warning to Oran to remove the question off his website. TIB, on 3 February, apologised for sending off a censorship warning.

All eyes turned to Kayseri, as the trial of 8 defendants including a policeman associated with killing the 19 year old Gezi protestor, has begun.

Governor of Kayseri prepared for the trial by bringing in 2000 police officers with two TOMAs (riot control vehicles) and police helicopter, conducting strict security checks as well as closing off streets to the courthouse.

Members of Parliament for the main opposition Republican People’s Party as well as the pro-Kurdish parties Peace and Democracy Party, People’s Democratic Party and the leftist Freedom and Solidarity Party were present at the trial.

Developments regarding the corruption probe continued to dominate the agenda.

Two prosecutors of the 17 December graft probe case as well as some other high profile cases such as Ergenekon coup plot case have been relegated in the last week. The current prosecutor of the graft probe case stated that he would scrap his predecessor’s indictment which demanded heavy sentences and rewrite the indictment by himself at the end of investigations. 90 out of 192 prosecutors at the Istanbul Caglayan Courthouse have so far been relocated.

800 police officers in Istanbul, Ankara and Izmir and 120 in Bolu have been reassigned or sacked last week, which makes over 6000 police officers have been relegated across Turkey since 17 December.

The US based preacher Fettullah Gulen, who has been targeted as the leader of ‘parallel state’ by the government following the 17 December operation, files libel suit against PM Erdogan for ‘derogatory and insulting remarks’ about Gulen and sues Interior Minister Efkan Ala for his remarks implicating that Gulen attempted to stage a coup against the government.

Former Minister of Environment and Urban Planning Erdogan Bayraktar, who had called on PM Erdogan to reside alongside him, implicating the PM in the corruption allegations, has now withdrawn his resignation. Deciding to remain with the AK Party, Bayraktar has announced he will participate in election campaigns.

Ahmet Hakan reports on the Hurriyet Daily News an opinion poll conducted to find out people’s perceptions regarding the recent corruption probe. Click here for results of the poll.

Significant legal developments have occurred regarding the pro-Kurdish movement and the Sledgehammer case.

Constitutional Court approves right to defence in mother tongue. Translators will be provided by the state on the expense of defendants.

The Sledgehammer coup plot case can now be taken to retrial following court decision against an earlier rejection of retrial. Turkish Minister of Science, Industry and Technology Fikri Işık stated that the key evidence report on the Sledgehammer case was not prepared by TUBITAK, but the individual expert working at the institution.

PM Erdogan has announced that the maximum period of detentions without verdict will be brought down to 5 years. The government had previously brought the 10 year permission to 7,5 years. He also notified the public of three legal reform proposals. Erdogan said they were preparing a change in the laws for the Ministry of Justice and the Ministry of Internal Affairs. Thirdly, he stated that they were working on a proposal to incorporate the controversial Anti-Terror legislation into the Criminal Code.

The Turkish government’s relationship with the Islamist has become hostile, as the military attacked a rebel convoy in Syria.

The Turkish army has attacked a convoy of the Al Qaida affiliated Islamic State of Iraq and the Levant (ISIL) in Syria. According to information obtained from military sources, during clashes between the Free Syrian Army and the ISIL, a mortar shell thrown by the ISIL landed near a Turkish police station. Apparently, arms were also fired at the station. Turkish army responded with tanks and artillery fire to destroy a van, a truck and a bus belonging to the ISIL. No information has been released about casualties.

Minister of Foreign Affairs Ahmet Davutoglu defended the attack to the convoy. Saying that the threat in Syria has been intensifying, he underlined the need to increase security in the region. He identified three main threats to regional security; extremism, sectarianism/ethnic-nationalism and chemical or nuclear weapons of mass destruction.

On a different note…

  • The jailed leader of the PKK Abdullah Ocalan has sent a letter to the newspaper Agos, addressing the Armenian community. Stating that they are fighting for the freedom of all peoples, including the Armenians, Ocalan attempted to ameliorate the effects of Bese Hozat’s speech. Hozat, who is the co-president of KCK had said that the Armenian and Greek lobbies were parallel states alongside the Israeli lobby.
  • It was reported that TRT, the state’s radio and TV channel, particularly requested a male engineer for one of its programmes on TRT Diyanet. When this request became public a Free Democratic Party (HDP) MP put a question in the parliament. Government spokesman Bulent Arinc responded that a male expert is a natural choice for a programme on food engineering as opposed to programmes on psychology, children, cooking and marriage.
  • Northern Cyprus has repealed a colonial-era law in order to decriminalise same-sex relationships and protect LGBTs against hate speech. 

The Central Bank announced an increase in interest rates, attracting diverse reactions from politicians and economists.

The expected but disappointing rate decision from the Central Bank of Turkey solidified foreign investors’ concerns over Turkish economy as well as the independence of the Central Bank from the government. This was exacerbated when the Central Bank did not announce enough of extra tightening days despite the market expectations. The evident result was steep depreciation in the currency where the market saw 3.95 against the British Pound.

It was not long after this steep loss of value in the currency and obviously the credibility of the Central Bank that the Central Bank announced an extraordinary monetary policy meeting on the eve of 27th January. The result was a hike in the interest rate, where lending rate was increased to 12 percent, borrowing rate was increased to 8 percent and the one-week repo policy rate was increased to 10 percent. Furthermore, the Bank announced that they simplified the monetary policy and would lend from the policy rate only (which means single rate now) and removed the concept of extra tightening days until further notice.

The decision placed Turkey as the second in the rate league after Brazil, which has the highest rates (10.5) at the moment. The reactions were various:

  1. The immediate effect on the currency was a retreat back to 3.65 against the sterling.
  2. PM Erdogan announced that they have plans B and C, yet no one knows what they are. 
  3. The business world’s initial reaction was that the decision on rate increase was too late.
  4. And yet the relative appreciation in the currency triggered the corporations to close their foreign exchange positions. Hence, the domestic demand on the foreign currency pulled the lira back to the same levels before the rate decision.

In addition, the FED’s decision to taper further 10 billion USD of its asset purchasing has undermined the move from the Turkish Central Bank and brought the currency to the similar levels before the rate decision. Financial Times named the concerns over fragile economies as tropical storms in an article where it brings a comparative analysis on the rate increases in the emerging markets including Turkey. Accordingly FT warned investors against the inflation, volatility and the involvement of politicians in the monetary policy decision of central banks in these countries.

Turkey’s high level visit to Iran marked increased cooperation between the two countries in terms of energy, trade and political relations.

Meanwhile, PM Erdogan, Minister of Economy and Minster of Energy visited Iran to heal the wounds and re-boost economic relations. The talks resulted in a tariff agreement in which Turkey will allow a reduced tariff for agricultural products from Iran and Iran will execute a reduced tariff for industrial products from Turkey, ranging from cleaning products and pharmaceuticals to iron and steel products and electrical and electronic wares. The talks, however, were not limited to trade only. Turkey is pushing for a reduction in the price of natural gas. There was no final agreement yet but the Minister of Energy Taner Yildiz stated that Iran agrees with Turkey that the price should be decreased. It seems the talks with Iran presented a rosy and hopeful picture between the two countries for the future that used to have close trade relations.

It is not possible to stay as optimistic when it comes to oil and gas talks with Iraq. Despite several attempts from Kurdistan Regional Government (KRG) in Iraq and the Turkish government to start the flow of oil, Iraqi government persistently resisted the decision between the two and stopped the deal on many occasions. Finally, the central government closed a deal with a law firm that is going to watch closely where Turkey receives oil. Private businesses, the KRG and the Turkish government are all in favour of activating the pipeline except the central government of Iraq. Yet, none of them seem ready to boldly challenge the central Iraqi government on the issue. This raises questions and concerns over the viability of the project.

On a different note…

  • Inflation rates for January have been released. The consumer price index has been within expectations with a monthly increase of 1,72% and an annual increase of 7,48%.  However, the producer price index has been far above expectations, with a monthly increase of 3,32% and an annual increase of 10,72%.
  • Data on employment in the industrial sector has been released. Despite the doom and gloom over the last week, the data on employment in the industrial sector came out of nowhere like an oasis in the desert. Accordingly, compared to the employment in 2012, the number of employees in the industrial sector increased 9.43 percent and reached to 2,663,764 people in 2013. This increase was led by Food and Beverages and Metal Products sectors.

 

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