8 April 2014 News Roundup

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The recounting of votes in many cities and districts has been increasing the tensions on the streets, as well as the rivalry between the parties ahead of Presidential elections. The uncertainties regarding the first presidential elections have started creeping into the media, with multiple scenarios being discussed for the PM Erdogan’s promotion to the presidency. The removals of the bans on YouTube and Twitter by the judiciary have left the Prime Minister discontent. Meanwhile the detailed verdict of one of the most controversial cases in the history of Turkey, Ergenekon have been released. As the volatility of the Turkish Lira continues, and consumption via credit card installments fall, inflation has been rising. Despite the recently released statistics the Minister of Finance and the head of the central bank foresee a fall in inflation in the second half of the year.

One week after the local elections, votes are being re-counted as candidates object to the results.

After the re-count in Yalova, where the Justice and Development Party (AKP) was designated as the winner, the city’s municipal mayor has been announced as the People’s Republican Party (CHP).

In Ankara, although the AKP candidate and 5th time winner Melih Gökçek has received the mandate to become the municipal mayor, the CHP candidate has declared he will object to the results and request annulation of the elections in Ankara. Although his appeal to the first instance court has been rejected, he will continue with the legal appeals to the Supreme Electoral Board, the Constitutional Court, as well as the European Court of Human Rights.

Riot police used water cannons and tear gas against the people who gathered outside the Supreme Election Board after CHP’s objection to municipality vote in Ankara. There was no sign of violence to justify the police’s action.

After 15 recounts of votes in Agri which is in the northeast of Turkey, the dispute on the winner between the Peace and Democracy Party (BDP) and the AKP continues. Both parties have requested annulation of the elections although the BDP came out as the winner after each recount. Elections will be repeated in the city.

Following to clashes with the police, the government banned demonstrations in a district of southeastern city Sanliurfa, Ceylanpinar which borders Syria’s Kurdish controlled region Rojova. Many protested against electoral fraud in the district to which the riot police reacted with tear gas, plastic bullets and water cannons leaving many people injured. The BDP supporters claimed that they were not allowed to observe counting of the votes and they found ripped and burned ballots. However, the district’s Electoral Board did not accept the BDP’s objection to the vote. A de facto state of emergency was declared in the district, said a People’s Democracy Party (HDP) affiliated lawmaker.

A child was hit by a gas canister and lost sight in his left eye in southeastern city, Sanliurfa, whilst protesting election results.

The HDP Bayrampasa, Istanbul office announced that CHP votes were registered onto the HDP’s, as an official document showed.

Antalya’s new mayor accused his predecessor for burning official documents of the Antalya municipality and for covering corruption. The AKP’s candidate and the CHP’s candidate had run a close race in the elections and the AKP’s candidate won the race by a tiny margin. CHP officials filed complaints to the Electoral Board as they claimed that there were irregularities during counting of the votes. EU Minister and Chief Negotiator, Mevlut Cavusoglu, was photographed during the counting.

According to Hurriyet Daily News, an opinion poll conducted by a social research centre, Ipsos, soon after the closure of ballot boxes on the electors’ motives for voting for the AKP and the opposition parties. It demonstrated that the corruption allegations, the leaked tapes and the ban on social media did not have any influence on the AKP voter, instead such claims against the government increased solidarity with the party. Similarly, PM Erdogan as a charismatic leader played a substantial role in these elections. Some others voted the CHP and the MHP mainly because of the corruption allegations.

Here are the women municipal mayors of the 2014 local elections.

According to the data provided by the Women’s Coalition, only 3,3% of the candidates were women in Turkey’s 2014 local elections. Here are the female candidacies according to parties;

AKP: 1,1% of the 1394 candidates were female

MHP: 2,5% of the 1394 candidates were female

CHP: 4,3% of the 1180 candidates were female

BDP: 13,8 of the 224 candidates were female

The women candidates who won municipal positions at the end of the elections are as follows:

  • Women candidates won the municipal mayor position in 4 of the 81 cities. This was the first year that women were voted to become the municipal mayor.
  • Due to the BDP’s strategy 9 women became co- municipal mayors in the eastern cities of Turkey.
  • 33 women were voted into mayor positions.
  • 46 women share the mayor position with another male candidate.

Here are the only four LGBT friendly mayors of the 2014 local elections.

The LGBT Friendly Municipality Protocol was signed by 40 candidates in the March 30 elections. Of the 40 candidates, 4 have been elected as mayors in Istanbul and Mersin.

The CHP’s Aykurt Nuhoğlu in Kadıköy, Murat Hazinedar in Beşiktaş and Hayri İnönü in Şişi (all Istanbul provinces) are among those LGBT friendly mayors.

The BDP’s co-candidate Yüksel Mutlu, who was also a signatory to the protocol, was elected into office in the Akdeniz district of Mersin.

The Minister of Energy’s explanation for energy cuts did not satisfy a significant proportion of the public.

Over 20 cities were affected by power cuts on the election night. However, no reasonable explanation has been provided by any government officials.

Minister of Energy Taner Yıldız had pointed to an unwelcome cat in the power distributor unit as the reason for the electricity shortages throughout the country. However, an investigation into the electricity providers in the cities that experienced the blackouts revealed interesting information.

Courts ruled to lift the bans on Twitter and YouTube.

The ban on Twitter has been lifted after the Turkish Constitutional Court’s decision.

The Constitutional Court (AYM) found that twitter’s closure was a violation of rights of freedom of expression and that it has no legal foundations in Turkish laws.

Deputy chair of the AKP, Mustafa Sentop, suggested unblocking Twitter for only three people who individually filed complaints against the Twitter ban in the Constitutional Court. Sentop claimed that the government only exercised the constitutional duty to protect citizens by blocking Twitter and this court ruling should only affect these three people. Sentop added that it was impossible to block individual pages / URLs on Twitter. However, Twitter was unblocked in the following hours.

PM Erdogan declared that he did not respect the ruling as the decision, he stated, was against the national values whilst an American company was protected by Turkish courts.

The head of the Turkish Constitutional Court Hasim Kilic responded to PM Erdogan’s claims that the lifting of the ban on Twitter was not “national”, meaning not in the interest of the nation. Kilic stated that the decision to lift the ban was based on universal principles rather than national, religious or sectarian ones. 

The latest status of access to YouTube is unclear.

The details of the decision to ban YouTube have been announced. Access has been blocked to the website due to content that was ‘disrespectful’ of Ataturk.

Foreign Minister Davutoglu, on the other hand, had claimed that the social media website was blocked for national security reasons after a tape of a high security meeting at the ministry. The website was blocked on March 27th by the Telecommunications Authority (TIB) without a court order.

However, no legal basis exists for blocking a website due to national security concerns. Moreover, the recent internet law does not allow blocking websites, but individual pages if the illegal act is insulting Ataturk.

Nonetheless, the latest status of YouTube is not clear. After the Ankara Bar Association objected to the ban, the Golbasi Criminal Court of First Instance had granted access to YouTube. However, the same court decided for the continuation of the ban due to the fact that the content deemed illegal was not removed from the website.

FM Davutoglu asked the EU’s Enlargement Commissioner Stefan Füle not to make claims or statements on Turkey, especially the Twitter and YouTube bans before consulting Turkey.

YouTube has made an application to the Constitutional Court, asking for the cancellation of the ban on the website.

On a different note…

  • An elderly woman who sat in front of a bulldozer managed to stop a construction of a commercial building in a park which had been used as a playground for the last 18 years in Edirne.  The new mayor took on the case and wowed to keep the area off construction although his predecessor had issued the permit for construction in the park.
  • NGOs and associations cannot use words such as ‘platform’ or ‘council’ in the name of their organization. Such words are outlawed by the authorities.

The detailed verdict of the Ergenekon case has been released. Details are as follows:

The Ergenekon case, which has lasted for 4 years, 9 months and 15 days was concluded in 2013. However, the detailed verdict had not been revealed for 8 months. After the elimination of the special courts, the 13th Istanbul High Criminal Court was designated in charge of the case and the verdict.

The detailed verdict is 16,600 pages long. The most significant crime of the suspects was the attempt to remove the government of the Turkish Republic with force and violence. The suspects were charged with being a member of the terrorist organization Ergenekon. The verdict states that the Ergenekon became highly active during the rule of Bulent Ecevit and Recep Tayyip Erdogan.

Regarding the aggravated life sentences given to many of the suspects, the court commented; “while the population has an awareness of petty offenses, their awareness of crimes committed against the legislative and executive branches of the government is quite low. Since such crimes were not brought to trial before, it is understandable that the population may find these sentences too heavy.”

The lawyers will have 15 days to appeal to the decision.

The Independent Commission on Turkey  has highlighted rising authoritarianism in its third report entitled “Turkey in Europe: The Inevitability of Change”.

Formed in order to monitor Turkey’s negotiation process with the EU, the commission stated that the distance between Europe and Turkey was increasing. The report saw the re-allocations of hundreds of policemen as a response to the December 17 corruption allegations as an attempt to hide facts. The report has also criticised the EU for not valuing the accession process with Turkey and its discouraging attitude towards Turkey’s accession.

Not a single day passes without excessive volatility in the Turkish Lira.

The aftermath of the elections has seen an appreciation of the Turkish Lira against the USD to the levels of 2.24 on Tuesday.  And yet it did not stop there and appreciated for further 6% to the levels of 2.1185. Despite the recent appreciation and the confidence that the general elections will end up with a single government one more time, according to the Reuters’ survey the markets expects a depreciation in the value of Turkish lira to 2.2260 in 3 months, and 2.2450 in 6 months.

The volatility was also confirmed by the Fitch Rating on macroeconomic basis. The credit rating agency has kept the sovereign rating as “BBB-“ and the outlook as stable but warned that the economy is increasingly volatile. The agency warned that compared to similar economies predictability in Turkey’s economy is much worse but commented that the current account deficit is expected to narrow down sooner than before.

The Minister of Finance, Mehmet Simsek, commented in his presentation during his visit to Kuwait for the investors on the strength of the Turkish economy.

He emphasised that the depreciation in the currency increase the competitiveness of Turkish corporates and added that the open foreign exchange position of the real sector is within the comfort zone.

Simsek stated that they are expecting a downward trend in the inflation from the second half the year onwards.

The cautions against the consumer credit growth seem to yield results.

Banking Regulation and Supervision Agency (BDDK) limited the installments for credit card balances on 1st February. The past two months have seen a sharp decrease in the consumption in installments by credit card. The decrease reached to 8 billion TRY according to the statistics of The Central Bank of the Republic of Turkey (CBRT).

Meanwhile, the governor of CBRT made a presentation to investors in London. In his presentation the governor sustained the tight monetary policy and argued that the persistent increase in the inflation is due to fx pass-through effect.

The governor of CBRT, Erdem Basci, responded to Prime Minister Erdogan’s calls for rate cuts in his press conference.

PM Erdogan had urged CBRT to convene and lower interest rates before leaving for his trip to Azerbaijan last week.  The main headlines from Basci’s speech are as follows:

  • Underlining that only the Monetary Policy Committee can determine the interest rate, the governor said “a cut in the interest rate can occur however this will not be a significant decrease.” He added that the timing of this cut is extremely important.
  • In this regard, moderate steps shall be expected from the Central Bank. The governor stated that long term rates will always be higher than short-term rates.  He emphasised that we should be ready as if the FED will increase interest rates.
  • The front-loaded tightening policies have supported the strong stance of the Turkish Lira. Therefore, the later the interest rates increase, the higher the costs will be. Whereas, cuts in the rates will come gradually.
  • Consumer loan growth is decelerating. Growth in consumer loans is expected to be around 15% while growth in corporate loans is estimate to be 20%.
  • There will be significant improvements in current account deficit. Import growth is decreasing when excluded from gold imports.
  • GDP growth is expected to approximate to the medium-term targets of 4%. Part of this growth will be supported by net exports. This suggests that external demand will support the growth figures this year. The fall in domestic demand, on the other hand, is not as concerning as expected.
  • Purchasing Managers Index is expected to grow more than 2.5%, which suggests that industrial production will be in alliance with GDP growth.
  • Unemployment rate has been decreasing in the past months.
  • Past-due loans are below 3% and there seems to be no problem with that.
  • 63% of corporates do not have any foreign currency open positions. 43% of large companies  and 66% of SMEs do not have any borrowings denominated in foreign currencies.

The tightening measures on loan growth, in order to control the loan growth and current account deficit, continue to shrink the banking sector’s profitability. Profits in the banking sector decreased by 26.3% to TRY 3.18 billion.

Latest statistics show inflation is on the rise.

Inflation increased a further 1.13 % in March and reached 8.39 % on annual basis. The governor of CBRT added that in the second half of the year CBRT expects the inflation leaning downward, but an upward pressure from food prices and foreign exchange rates were expected. He also underlined the bank’s estimations for better GDP growth than the expectations of the market.

The automobile sector is performing the poorest, according to quarterly statistics.

As the quarterly statistics are being released, one of the worst data came from the Automobile sector. The market shrank 24.5 % in the first quarter compared to the same period last year. This corresponds to a 32% decrease in the sales for the first three months of 2014.

 

CEFTUS Insights Editors

 

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