Guest article by Mina Toksoz: Erdogan has used coup attempt to crack down on perceived opponents but may not be as strong as it may appear

It was the army that stopped the military coup

The majority of the coverage of the failed Turkish military coup, and the rhetoric from Turkish political leaders suggested it was defeated by the Turkish people on the streets in support of democracy — some responding to the call from the minarets others to their reason. But that was not really the case. It was the Turkish army that stopped it just as it was General Umit Dundar, commander of the first army in Istanbul, who advised President Erdogan to leave his Marmaris hotel which was attacked soon after.

The top ranks of the Turkish army “stayed loyal” to the President as relations between them has improved over the past year as the President’s policies came in line with military’s objectives: hard line on the PKK in place of the peace process, policy of defeating ISIS replacing the previously ambiguous attitude, making up with regional ally Israel and toning down the hostility to Russia for a more constructive stance on Syria. With the exception of differences over the Kurdish issue, this is also in line with Europe and US thinking. Hence came the statements of Western government support for the elected government of President Erdogan and against the coup attempt despite the subsequent dismay over the deep purges taking place. EU in particular needs Turkey to ensure the refugee deal that is critical to maintain political stability in Europe. That President Erdogan is prepared to accommodate to EU demands despite the instability caused in Turkey by the 3million (and rising) Syrian refugees shows that the two sides need each other.

But President Erdogan’s position is not as strong as it may appear. The curt statement published hours after the General Chief of Staff had contained the coup pledged allegiance to the “demokratik hukuk devleti” –  democratic state based on the rule of law. This may not be empty rhetoric as the army still sees itself as the guardian of the secular Turkish Republic.

Turkish Parliament put on rare show of unity

President Erdogan’s authoritarian direction is also set to continue to clash with the democratic aspirations of the Turkish people and the defence of democracy by its political institutions –parliament, media, political parties, business associations, that were amply illustrated during the coup attempt. The Turkish Parliament (Turkiye Buyuk Millet Meclisi) showed a rare show of unity on the weekend pledging their allegiance to the sovereignty of the people vested in the Meclis. As the coup unfolded Friday night, MPs from all parties rushed “to keep the lights on” in Parliament and stayed put even when the building was bombed releasing a joint statement condemning the coup. However, the debate in the special session next day revealed the deep polarisation in Turkish politics. While Prime Minister Yildirim of the ruling AKP (Justice and Development Party) blamed “foreign interests who try weaken Turkey” with the nationalist-right MHP (Nationalist Action Party) Chairman Bahceli pointing to the Gulen movement as orchestraters of the coup, the centre left focused on domestic issues. The chairman of CHP (Republican Peoples’ Party) Kilicdaroglu called on MPs to work harder to strengthen democracy while the deputy head of Kurdish-left HDP (Peoples’ Democracy Party) Baluken warned that without a political solution to the ongoing conflict in the south-east, threats to democracy remain high and more military coups cannot be ruled out. These divisions were reconfirmed two days later in the debate on the 3-month emergency rule the government proposed which was passed with the support of the MHP despite CHP and HDP voting against.

Although inspiring, the scene in the Meclis was overshadowed by the action on the streets where President Erdogan spoke to his supporters. He now sees the opportunity – a Godsend, as he put it, to try to push forward the constitutional changes for an executive presidency. The government has rapidly instigated wide-ranging purges of the army, judiciary, the bureaucracy and even academia to increase its grip over the country that could further weaken the checks and balances of Turkish political institutions.

Turkish people have seen all this before, especially after the 1980 coup that had split the country between right and left. Now it is more complex. A left-alternative has only a faint echo in the CHP and HDP who –given the electoral system in Turkey, are unable to win elections, although some 40% of the electorate vote for them. On the right the vote is split between the MHP, which is in crisis as its politics has been increasingly appropriated by the AKP. Supporters of AKP are mostly people who had been left behind by the Kemalist regimes. They have been given voice by President Erdogan whose politics is a Turkish/Islamic version of Trump, Farage and other present day populist figures who thrive on crises.

Politics to drive economics

The political developments of last weekend have economic consequences. The living standards of the AKP political base improved significantly over the past decade as the Turkish economy grew rapidly. But incomes have largely stagnated since their 2008 levels. The coup attempt and the ongoing political purges is seen as increasing risks for international investors and the terror attacks are discouraging tourists. This will reduce the vital foreign exchange inflows to meet Turkey’s big external financing needs – the economy’s Achilles heel. This could continue to weigh on the lira increasing refinancing risks for the highly indebted corporate sector. The rating agencies Fitch and Moody’s warned of risks to Turkey’s investment grade rating if institutions are further weakened.

The treasury—with bureaucrats having the experience of the 2001 debt crisis, have kept a tight grip over fiscal policies. But there is a major risk that the budget discipline is loosened in order to stimulate growth to bolster political support for President Erdogan’s bid for executive presidency. Monetary policy was already suffering from political pressure for easing, although the sharp fall in the lira since the coup attempt and the inevitable uptick in inflation, led the Central bank to cut interest rates less than had been expected.

The Turkish economy is still strong with a resilient banking sector, a dynamic and diversified manufacturing, and is supported by the low oil prices and rock-bottom international interest rates. The economic authorities responded swiftly and decisively to the political shock with emergency liquidity measures and Economics minister Zeybekci promised to push on with measures to raise Turkey’s low savings rate and reduce its vulnerability to external shocks. Business welcomed the emergency rule with the Istanbul Chamber of Commerce stating “exceptional times require exceptional measures”. Domestic investors are so far standing firm. As the lira collapsed, retail depositors rushed to sell foreign exchange (some $6-7bn since the beginning of the week) and buy lira providing a domestic hedge and containing the depreciation. The weaker lira could help rebalance the Turkish economy to reduce its dependence on imports. But for currency movements to have lasting impact, they must be accompanied by deeper reforms with a longer term horizon and a business environment based on the rule of law to attract investment. However, increasingly, policy is having to focus on the short term and fire-fighting repeated domestic and international crises in the context of weakening rule of law. Meanwhile the purges are likely to trigger a major brain drain from the country. This will deplete expertise in the economy and the bureaucracy, and risks weakening policy flexibility in response to changes in global conditions. Hence the outlook for the country has become more fragile. But for 22-hours, the Turkish people and its battered institutions held together to defend democracy and showed an alternative way forward for the country away from coups and authoritarianism.

 

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