4 March 2014 News Roundup

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The reverberations of the wiretapping scandal of PM Erdogan dominated the news this week. The new bills on HSYK, Turkish National Education and the National Intelligence Organization (MIT) caused various reactions within the country. The Human Rights Association revealed shocking statistics regarding human rights violations in 2013. While Turkey’s energy dependency is expected to increase to 14 trillion USD, its trade deficit has decreased. Also, the economy’s long-term outlook is not projected to be as volatile as its short term instability.

Developments related to the wiretapping of Prime Minister’s conversations continued to dominate the agenda.

Alongside the PM, it had been revealed that thousands of people’s phones were tapped into. The chief prosecutor of Istanbul said there was no reasonable ground to execute such massive tapping. The High Council of Judges and Prosecutors announced that they would investigate the recordings.

Regarding the tapping scandal, the Prime Minister accused a “robot lobby” for plotting against the government. As he blamed a number of lobbies for attacking the government through Twitter, he also blamed Fethullah Gulen for the recordings calling him and his movement “the preacher’s lobby”.

The phones that were tapped were actually encrypted. The PM blamed TUBITAK (Scientific and Technological Research Council of Turkey) that developed these phones for the recordings. The Science, Industry and Technology Minister Fikri Işık initiated an investigation into the council. Soon after, five people working in TUBITAK were removed from their posts. According to the minister TUBITAK had become infiltrated by what the government now calls “the parallel state”.

Two American companies were accused of assembling a fake recording of the conversation between the PM and his son. However, both have denied the allegations. John Marshall Media Inc. rejected the accusations on their Facebook page. Meanwhile, Kaleidoscope Sound made a statement relieving themselves of the responsibility for identifying the authenticity of the recordings.

1000 were removed from their posts within the judiciary.

The new bill reforming the High Council of Judges and Prosecutors (HSYK) had been approved by President Gul last week. With the confirmation of the bill, 1000 people within the judiciary have been removed from their posts. This group includes everyone apart from the members of the council that were voted into their positions; the General Secretary of the council, vice general secretaries, head of the inspection committee, vice heads of the inspection committee, inspectors, investigation judges and administrative personnel. This group also includes the entire administration of the Justice Academy. The Minister of Justice will appoint the new members within two weeks.

Corruption scandal suspects including sons of former Interior Minister and former Economy Minister as well as businessman Reza Zerrab were released pending for trial.

Suspects of 17 and 25 December corruption cases are all released.

A new bill has been approved that brought controversial reforms to the education system.

A new education bill was deliberated and later approved in the parliament. Two unions went on strike for one day in protest of the new bill, which includes the following changes;

  1. Deputy undersecretaries in the Ministry of Education, all general directors, all directors of national education in the 81 cities will be removed as well as all school directors that have been working for 4 or more years.
  2. The description of ‘dershane’ (private university preparation institutions) was removed from the relevant law, de facto eliminating the concept as well. The time given to the institutions to transform themselves to private schools was extended for one more year to the academic year of 2018/2019.

Numerous protests continued to bring people out to the streets this week.

Students protested the completion of the road that threatened the green space of their university campus.

The road that was to be built through the campus of the Middle East Technical University has now been completed. The decision to destroy a substantial section of the campus’ green space had been protested by the university students before. Again, there were protests during the opening ceremony of the road. The police used tear gas, water cannon and rubber bullets to disperse the crowd.

In face of fierce resistance from the students, the Ankara municipality had managed to cut down the trees by entering the campus at night during a public holiday in October. Only 600 of the 3 thousand trees that were threatened due to the project, could be replanted.

Leaked phone conversations between the Prime Minister and his son that incriminated both of corruption led to numerous protests across the country.

Protests occurred in more than 10 cities including Istanbul, Izmir, Eskisehir, Ankara, Kocaeli, Antakya, Bursa, Trabzon, Antalya, Çanakkale, Sakarya and Mugla. The police responded with tear gas and water cannons.

During a rally in Balıkesir, the PM called those protesting across the country “atheists” and “terrorists”.

The deliberations regarding the new bill reforming the National Intelligence Organization (MIT) have been postponed until after the local elections.

The bill has already been approved by the Internal Affairs Commission.

The European Court of Human Rights has ruled the Turkish government guilty of violating a citizen’s right to life.

13 year old Ahmet Kaymaz was killed in Mardin by a police officer. The killing of two citizens including Kaymaz was announced in the media as “two terrorist killed” in the east of Turkey. However, the ECHR has ruled that the family of the victim receives in total of  140 thousand in compensation.

The Human Rights Association in Turkey has released a report for 2013.

According to the report, 15 thousand 706 people were subjected to torture, maltreatment, and offensive punishment. The report recognized an improvement in the treatment of the Kurdish population, however also underlined the activities of the government during the Gezi Protests and after the December 17 corruption probe. The report stated that the government was no longer transparent nor could be held accountable. The following are some of the facts revealed by the report;

  • The government intervened against 1134 gatherings and protests, 774 of which were related to Gezi.
  • Access has been removed to 1679 web sites.
  • 19 associations were sued for closure.
  • 19 people (including 2 children) were killed for not responding to the police’s calls.
  • 69 soldiers committed suspected suicides.
  • 33 people died in prison. 7 of them died due to health reasons. One died for burning himself while protesting the conditions in the prison. 25 prisoners committed suicide.
  • 269 women were killed. 556 were subject to sexual abuse and rape.
  • 233 claimed that they were subjected to torture and maltreatment while under custody. 843 prisoners including 39 children claimed they were subjected to torture and maltreatment in prison.

EU Commission is investigating the usage of funds under previous Minister for EU Affairs Egemen Bagis.

It has been revealed that the EU commission is investigating the budget of the EU Ministry under Egemen Bagis AKP MP, looking into accusations of irregularities in the spending of EU funds and hiring new staff. Emails were revealed of a conversation that took place in March 2013 between Bagis and the Head of the Centre for European Union Education and Youth Programmes, Musa Ceylan. Mr. Ceylan was telling Mr. Bagis that he “would not be executing any budget decisions that were suspicious and contrary to the centre’s charter.” While the centre itself is now the focus of the investigations, which might extend the Ministry.

On a different note…

  • KA.DER the association that works to support the candidacy of female politicians has announced its campaign for the upcoming local elections. It has prepared a “Local Authorities Pact” that includes steps to make the cities safer and more convenient for women. The pact has been sent to all candidates in the local elections. Names of the candidates who would not sign the pact will be announced in the media.
  • Consumer Confidence Index hit the bottom of four years with a 4.3 % decline from 69.2 points in February from 72.3 points in January. 
  • The industrial employment increased 3.4 % in the last quarter of 2013 on a year-over-year basis while hours worked increased 1.2 %. The gross salaries also increased by 15.8% according to TUIK. 
  • A grieving mother committed suicide a year after her son killed himself due to traumatic experience in police custody. Onur Yaser Can who was detained for suspicions of selling drugs claimed that he was tortured physically and verbally by the police.

The Turkish Lira depreciated further in the week.

Investors of Turkey experienced an unexpected development in the currency. Over the past weeks we saw the currency fluctuate due to the domestic political risks and uncertainties. We also observed that the volatility in the currency developed some sort of immunity to the vibrant domestic politics. The possibility of Russian intervention amidst the political unrest in Ukraine depreciated Turkish Lira more than the discontent and tape wars in domestic politics. On Thursday the lira saw the peak in three weeks at 2.2525 against USD. However, it seems the government is confident with the corporate sector against the foreign exchange risks. The Minister of Finance, Mehmet Simsek, announced that;

  • 63% of corporations in Turkey do not hold debts nominated in foreign exchange currencies,
  • 25% of corporations are indebted in other than local currency and yet their income is mainly from exports,
  • Only 12% of corporations who do not have any export income are exposed to debts in foreign exchange.

Turkey’s long-term economic outlook is stable.

The qualities of Turkey’s economy differ between the short term and long term. The volatility in the short-term is absent in the longer-term foreign investment. Investment Support and Promotion Agency announced that during 2013 before Gezi protests, Turkey received USD 5 billion foreign direct investment as opposed to 8 billion after Gezi protests. The head of the agency, Ilker Ayci, commented that the long-term expectations on Turkey has not deteriorated. Of the USD 12.7 billion of foreign investment in 2103 was USD 9.5 billion new investments with an increase of 8%.

Ayci also noted that the share of Europe in investment to Turkey decreased to 52% from 68% a year ago, reflecting a diversification.  On a sectoral basis, foreign investment was led by banking and insurance sector. Ayci also noted that they are expecting investments from two major banks in the world, possibly from China.

Turkey Statistics Institute (TUIK), on the other hand, announced the foreign trade statistics regarding January 2014. The USD 6.8 billion of trade deficit surpassed the market expectations of USD 7.3 billion. The decline was basically backed by the increase in exports. Exports increased 8.6% as opposed to 2.6% increase in imports on a year-over-year basis.  The countries Turkey exported the most was listed as Germany, Iraq, United Kingdom, Italy, France and the USA, respectively. In terms of imports, the top four countries are Russia, China, Germany, and the USA.

Tourism boosted exports.

Tourism occupied a special place in USD 151.8 billion of total exports in 2013. Tourism has left behind the most exporting sectors by recording an increase to USD 32.3 billion exports. The most exporting sector was again manufacturing on an aggregate level with USD 141 billion exports in 2013.

On a disaggregated level, however, the performance of “Tourism” is crystal clear compared to traditionally dominant exporting sectors. For example, “Transport Vehicles” recorded USD 18.2 billion, “Basic Metals Industry” recorded USD 17.5 billion, “Textile” recorded USD 14.8 billion and “Wearing Apparel” recorded USD 12.7 billion.

We also need to emphasize this week an emerging and promising sector in Turkey. Organic agricultural production increased to 1.2 % of total agricultural production. The number of different organic products increased to more than 200 from 8. This placed Turkey as the 12th country in the world and increased its share in the market to USD 300-350 million. Turkey is promising great profitability and investment in the market if the East of Turkey can be incorporated into the organic agriculture market.

Turkey’s import dependency on energy is expected to increase to USD 1.4 trillion.

Turkish Electricity Transmission Company announced the level of electricity production. The level was released as 61, 984 MW as of October 2013 and the major part of this production was based on natural gas and LNG. One project that contributes reducing this dependency is the recently agreed transmission project, TANAP. The Minister of Energy and Natural Resources, Yildiz, shared the details of TANAP, Trans-Anatolia Natural Gas Project. The project is expected to go through 21 cities from East to West, to bring about USD 45 billion of investments and approximately 5000 jobs.

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