Monday, 9 January 2017

Could Turkey Make Northern Cyprus Its 82nd Province?

Negotiations to end the decades-long partition of the critically-located Mediterranean island of Cyprus are set to enter a new and theoretically critical stage this week in Geneva. There have been many ‘final stages’ since the island was divided between Turks and Greeks following the intervention of the Turkish military in 1974. But there are great hopes, at least by international negotiators, that this ‘final stage’ just might work.

Much has happened since 1974, including the internationally recognized Republic of Cyprus – the Greek part of the island – joining the European Union. The northern, Turkish part of the island, remains internationally isolated, recognized only by Turkey. The Turkish part of the island survives on hundreds of millions of dollars of subsidies from Turkey. The Greek part of the island has recovered from its financial meltdown and is buoyed by the promise of natural gas in its territorial waters.

Will the island re-unite or be split completely?
The rough outline of the Plan A solution to the island has been well known for decades. It would involve the Turks giving up some land, compensation for people on both sides who lost property, keeping some sort of local autonomy for the Turks, and ending years of economic and political isolation by joining the southern part of the island in the EU.  Sounds logical – to the outsider. But the deep, underlying distrust and dislike between the two communities have always been major barriers to this settlement.

Furthermore, there is the very sticky issue of ‘guarantors’ – those three countries of Greece, the UK, and Turkey who were supposed to ‘guarantee’ the stability of the island. This guarantor system failed spectacularly in 1974 when the Turkish army landed to protect the Turkish minority – and in the process left several thousand troops on the island who remain to this day. If there is a settlement what happens to this guarantor system? Will the Turkish troops leave the island? Will the Turks accept the security of the European Union instead of the security of their own troops?

Will they actually leave the island?
            However, beyond all these island-based issues there is a real elephant in the room that could scuttle all hopes of a deal. That elephant is the political maneuvering in Turkey to change the governing system of the country to give President Tayyip Erdoğan unfettered, unchallenged, unchecked power. Turkey's prime minister and parliament would be reduced to feeble rubber stamps with this change.

            In order to get the votes he needs in parliament to pass the constitutional changes Erdoğan needs the support of the Nationalist Party – a party who not only hates the Kurds but loathes the very idea of a settlement on Cyprus that includes the reduction or complete withdrawal of Turkish troops from the island. Even with the support of the Nationalist Party the issue is a near run thing. Several members of the Nationalist Party have balked at supporting changes reducing parliament to an afterthought. And there are even reports, nothing more, of ruling party AKP members who don’t like the idea of an all-powerful president.

            Assuming the bill passes parliament, there will be a national referendum to approve or reject the change to a presidential system. While Turkish polls are unreliable at best, a leading poll shows support for the referendum falling short of the required 50% + 1. Failure at the referendum stage would be a disaster for Erdoğan by puncturing his aura of invincibility and denying him the power he so blatantly wants. This he cannot allow.

            Thus, the elephant in the room of the Cyprus negotiations. Erdoğan could easily whip up nationalist sentiment in Turkey (not hard to do) by stonewalling any change in Cyprus. The brilliant Turkish journalist Metin Munir – now reporting from the safety of Cyprus because no paper in Turkey has the nerve to publish his work – says there is a Plan B being actively discussed in Ankara. That plan is simply to annex the breakaway Turkish Republic of Northern Cyprus making it Turkey’s 82nd province if negotiations fail. Such a move may bring international condemnation, but would be immensely popular among the nationalist Turks.

He would sell himself as the great savior of our valiant Cypriot brothers and win the referendum in a landslide. Any opposition would be drowned in cries of national traitors, tools of foreign powers seeking to destroy Turkey. Such a campaign would be ugly but effective.

            International condemnation of such a move would have no impact whatsoever. It would only strengthen the deeply ingrained feeling that a Turk has no friends but a Turk. Erdoğan would loudly point out that the world did nothing to stop Russia’s annexation of Crimea. Therefore, why should he even listen to any criticism? The European Union would howl and scream. But so what? Turkish/EU relations were already at a dead-end. How much worse could they get? Greece would complain bitterly. But Greece is in no position to do very much. What would the United States do? That’s a very good question. No one has a clue at this point about Trump’s foreign policy which so far has been limited to 140-character tweets. Besides, right now most Turks think that America is behind every problem that Turkey is facing. Russia? Who knows? Putin is currently manipulating Erdoğan brilliantly. But will that manipulation extend to allowing dismemberment of Cyprus?

            Threatening Turkey with harsh economic sanctions won’t work. The Turkish people will gladly suffer mere economic hardship to preserve what they see as national honor. And furthermore, Putin will simply move into any vacuum created by Western isolation of Turkey.

            Any possible settlement on Cyprus is going to have to pay as much attention to political fine tuning in Ankara as it does to developments on the island itself.

Tuesday, 3 January 2017

Turkey Starts 2017 On A Steep Downhill Slide

More terror, more bloodshed, more tears, more hollow official condolences. After all the attacks we have seen in France, Belgium, Germany and especially Turkey these past several months what is left to say? Our reserves of shock and horror have almost run dry. In this age of rigid sectarianism and deep, self-righteous, unyielding social/political divisions we have come to expect these terror attacks as the new normal.

The fanatical Islamic group ISIS has claimed responsibility for the deadly New Year’s attack at an exclusive Istanbul nightclub. Turkish authorities have rounded up several of ‘usual suspects’ without managing to catch the actual gunman. Thousands of extra police were on duty in Istanbul on New Year’s Eve, yet somehow this gunman was able to take a taxi to the nightclub, calmly get out and retrieve his automatic weapon from the trunk of the car, shoot a policeman in front of the nightclub, go in the club, kill more than 30 people, and then escape into the night. His harsh image was caught on CCTV cameras, but now one suspects he is ‘in the wind’ and will never be found.

Gunman firing in the Istanbul nightclub
 This attack has ignited furious debate in Turkey about government incompetence and the consequences of its attacks on the secular lifestyle followed by millions of Turks. They claim the government has been promoting an Islamic agenda while actively suppressing secular reforms instituted by modern Turkey’s founder Kemal Atatürk. Indeed, government-approved sermons delivered in mosques in the Friday before New Year’s included sharp warnings about the illegality and immorality of New Year’s Eve celebrations.

Even Santa Claus was not safe. Long considered by the Islamic press as merely an agent of perfidious Christian and Western values Santa Claus was always on tricky ground in Turkey – despite Turkey being the birthplace of St. Nicholas. This year things got a little out of hand as armed thugs held a gun to the head of someone dressed up as Santa Claus. And no one from the government had anything to say about this incident despite their vacuous claims of tolerance and respect for other religions.  No wonder secularists are worried about the steady erosion of their lifestyle in an increasingly intolerant Turkey.

Even he is not safe in Turkey
In a broader context, the nightclub attack is an another stark symbol of the overall incompetence driving the country straight over the cliff. As a close friend put it, “What do you expect from a government that refuses to recognize the serious economic and social problems staring it in the face. As far as they are concerned this is the best possible of all worlds.”

Forget the incompetence for a minute. The policy U-Turns should leave the ruling AKP-supporters scratching their heads. Then: We hate Israel. Now: We love and need Israel. Then: We hate the evil Assad. He Must go. Now: Assad will play a key role in the reconstruction of Syria. Then: Russia is a real threat. Now: Russia can balance the malignant influence of the hypocritical West and protect Turkey’s real interests.”

By now the economic tail-spin has become apparent to almost everyone – except the one person who counts. Inflation is up, the currency is way down, unemployment is up, investment is down. President Tayyip Erdoğan still maintains that everything is going smoothly, and there is no need for any change. When the Turkish currency was sliding faster than a bob-sled he and his entourage made a very big show out of telling the hapless man-on-the-street to Be Patriotic and sell evil foreign currency. Sadly, a few naïve citizens actually believed him, and are now suffering losses as the Turkish Lira continues its disappearing act. One bank CEO recently told me there would be several large bankruptcies in 2017 as private sector companies find it impossible to repay foreign currency debt taken out when the Turkish currency was much stronger and semi-stable.

On top of the terror attacks a Turkish policeman, a highly-trained policeman, gunned down the Russian ambassador at a photography exhibition in Ankara. Apparently, the gunman waltzed around the metal detectors by showing his police ID. The Turkish government’s only response was to blame the now hated Fetullah Gülen who lives in the United States. So much for background checks for security officials charged with sensitive political protection duty.

Erdoğan can twist and turn and spin anyway he wants. But the empty shopping centers and hotels tell a different story. People are staying home, not going out.  Besides having less and less money to spend, no one wants to be in the wrong place at the wrong time and get caught in yet another terrorist attack.

Does he really understand what's happening around him
The Turkish army is now bogged down in Syria trying to take the small town of al-Bab from ISIS. The army entered Syria ostensibly to fight ISIS, but the real objective is to stop the advance of the Syrian Kurdish fighters along the southern border of Turkey. The president has declared that al-Bab is about to be taken any day. So far, the town remains in ISIS control and Turkish losses are mounting.  

Erdoğan and his flunkies have now resorted to ludicrous claims that the reason for the army’s difficulties in Syria is that the Americans are not giving enough support to Turkey's anti-ISIS fight. What utter and complete nonsense. What are they saying? The huge Turkish army can not defeat a rag-tag bunch of jihadis?? That should be embarrassing. But then, no degree of foolishness seems to embarrass this government. The U.S. and the Kurds have been fighting ISIS for a long time while Turkey only recently decided that ISIS was a real threat. Welcome to the real world. But then, these claims fit a usual pattern. None of the problems confronting Turkey are caused by the incompetence of government officials. Those problems are all caused by ‘outside influences.’

And now Erdoğan wants to change the constitution to give himself unlimited, unchecked power. It seems improbable that anyone would call today’s Turkey enough of a ‘success’ to warrant giving the president unlimited power. But maybe there are enough fervent Erdoğan supporters to give him what he wants despite the wreckage surrounding them. Turkish citizens might want to ask themselves the following question. If Turkey can suffer so much under limited presidential power, how much more will it suffer if the president has unlimited power?

Wednesday, 7 December 2016

The Opponent Who Refuses To Do What It Is Told

          Has Turkish President Tayyip Erdoğan finally met his match? Does he now have an opponent he cannot intimidate, he cannot fire, he cannot shut down, and he cannot throw in jail? So far, the dreaded opponent foreign currency , also known as the U.S. Dollar, is resisting all his usual tactics.

            He has resorted to the familiar yelling, stamping his feet, blaming foreign interests, and threatening dire revenge. Oh, he can rant and rave about the ‘tyranny of the dollar’, but this particular opponent pays no attention. Just this year the Lira has lost about 18% of its value against the dollar.  Over the last three months it is the worst performing currency in the world against the US Dollar. The standard remedy for this is to increase interest rates to make the Lira more attractive.
The 'enemy' that refuses to be intimidated

Not a pretty picture. Red line is the TL vs the USD since September 2016

But Erdoğan refuses to allow that. The Central Bank is nominally independent. The bankers may know better, but like every other bureaucrat in Turkey they are powerless to counter the president’s wishes. He believes that high interest rates limit economic growth. What he fails to appreciate is that a disappearing currency does more damage to the Turkish economy than higher interest rates could ever do.

How bad is situation getting? “We’ve totally lost it,” despaired one former senior official. “We have no monetary policy. Where’s the Central Bank? Where’s the Ministry of Finance? Ultimately, he’s going to have to raise interest rates to stabilize the currency. But I’m getting really tired of seeing the same movie over and over again.”

Exchange bureaux are the busiest places in Turkey these days
A leading economist put it even more bluntly. “We have a current account deficit and have to roll over $170 billion of short term debt every year. Our only strength is being globally integrated in trade and finance. Right now, we have reasonably smooth access to foreign capital. If he wants to destroy that . . .”

Any one over the age of 50 in Turkey can easily finish that sentence. All they have to do is recall the horrible decade of the 1970s. In addition to rising political violence there was a shortage of foreign currency which led, among other things, to frequent power cuts and lack of fuel oil for heating. People remember wearing overcoats in their offices because there was no heat. There was no electricity to run elevators. A friend was working in a school where they resorted to burning hazel nut shells for warmth.

            All that changed in the 1980s with a new currency regime that allowed easy access to much needed foreign currency allowing the Turkish economy to grow rapidly. That access is now under serious threat. And that threat has very serious consequences for the Turkish economy. Why? Because every facet of the economy – from manufacturing, retail, tourism, agriculture, to energy has become tied to the hated foreign currency.

            Turkey has a strong manufacturing base, but almost all the equipment in those factories is imported. Raw material for much of Turkish industrial and retail sectors is imported. One company, for example, makes fine woollen fabric, much of it for export. Where does the raw wool come from? Australia and New Zealand. Every drop of oil, every cubic meter of natural gas, every ounce of petrochemicals is imported. Turkish officials boast of the export numbers. But the vast majority of those exports contains goods, like the wool, that were first imported.

           In recent years, Turkish companies have borrowed billions in foreign currency to fuel their growth. Why foreign currency? Because in a world of zero interest rates it was cheaper than borrowing in Turkish Lira. That was a good plan . . . as long as the Turkish Lira remained stable. Now, however, these companies are faced with the massive problem of finding much more Turkish Lira to buy the foreign exchange with which to repay those loans.

            The president now resorts to ‘jaw-boning’, lecturing everyone to change their carefully hoarded foreign currency into Turkish Lira. The only problem is that every time he does that the value of the TL sinks even further. Then he says he is negotiating with Russia, Iran and China to change their trade with Turkey from foreign currency into local currency. Tough to see this working out well. Russia, for example, depends on exports of its massive natural resources – all priced in US dollars by the way -- to get vital foreign currency. The Turkish Lira does not qualify as a one of those vital foreign currencies. Even if Russia did agree to accept Turkish Lira, the value of those Lira would be tied to the US Dollar for every payment. So what would be gained?

Is he really going to accept TL for his precious natural gas?? Not too likely.
            He does have some ‘nuclear’ options that would certainly stop the Lira’s slide. But they would also stop everything else. About 50% of the deposit accounts in Turkey are in foreign currency. He could force conversion of those accounts into TL. Drastic and very, very painful for average Turkish citizens.

            He could also institute some sort of capital controls, limiting the movement of currency into and out of Turkey. Disastrous for Turkish companies who rely on free movement of currency to run their businesses. And what about those foreigners who invested hard currency in Turkey?  Can’t imagine them being very happy receiving bags of Turkish Lira when they sell out.

            Before inflicting ‘nuclear’ options on the long suffering Turkish public the president might want to share just where he and his ministers store their wealth. But no one should hold his breath for that bit of transparency.

            These steps are unlikely. But if the currency continues to weaken and his rants about ‘evil foreign manipulation’ and the ‘interest rate lobby’ fail to stem the tide there is, unfortunately, no telling what the president will resort to.

Saturday, 3 December 2016

The Joys Of Enforced Immobility

I have been more or less house-bound for the last two months while recuperating from an operation to repair a torn Achilles tendon. The operation itself only takes about 45 minutes, but the recuperation is long and tedious – filled with sharp warnings from the doctor about slipping and winding up back on his table. “It’s not that I don’t want to see you again, but . . .” Time outside has been necessarily limited because of the difficulty of manoeuvring first with a plaster cast and then with a cumbersome ‘walking’ boot and crutches. Just as well, because one doesn’t want to incur the wrath of one’s surgeon by tripping on London’s uneven sidewalks and tearing the tendon again. The thought of an acid “I told you so” was enough to keep me indoors.

            Your wife meanwhile picks up the slack by doing all the normal chores of shopping, cooking, washing, house cleaning, etc. plus sorting out all the bits of equipment that seem to accompany this recuperation and doing all the fetching and carrying I used to do. All you can do is smile sheepishly and make sure you've booked two tickets to the finest hotels in Paris once the whole process is over.

This would do very nicely, thank you
The period started with the best of wholesome intentions. The ‘Great Novel’ was going to get finished. That lasted about a day-and-a-half. Putting aside notes for the novel, the next great idea was to improve my French. First, listen to various French programs on-line. Next, hire a French teacher to come once a week. Alas, this is continuing, but the mysteries of French irregular verbs still confound me. As for the accent? Well, very polite Frenchmen nod their heads as if following every word before turning to a friend asking if they understood just what I was trying to say.

OK, so out come the Great Books on topics I should have read in university many years ago. Time to catch up. Then there are on online lectures. I eagerly sign up for one or two of those only to find that the professor giving these particular lectures was a high-school classmate of my daughter. How to feel simultaneously old and dumb. That’s OK. On to the books. Mary Beard’s entertaining history of ancient Rome, SPQR, a new book on Byzantium and Philip Mansel’s book on the sad fate of Aleppo. Then a real door stop called Moscow 1937. Actually, much more interesting than the name implies. All well and good, but after a couple of hours of Cicero’s problems, the innumerable plots and counter-plots of Byzantium, or Stalin’s endless purges my mind starts to turn to tapioca.
With the best of intentions . . .
Time for a little light entertainment. So, we crank up the Kindle and order a long list of international murder and mayhem books that pass for entertainment. That’s fine, but after a while the plots sort of meld into each other and it’s easy to lose track of just who is good or bad, or who is being targeted by yet another dysfunctional super assassin. They’re also a bit like Chinese food. You finish them quickly and are still hungry.

My next cunning plan to pass the time was to tackle that long list of ‘useful’ DIY tasks that every home has. What better time than during my enforced immobility?To be polite, my DIY skills were somewhat lacking when I had two good legs, and probably hadn’t improved with the cast and crutches. Nonetheless, we soldier on.  Fortunately, after a few abject failures, a very clever and skilled Slovenian plumber/electrician was able to repair the damage.
Weapons of mass destruction
Oh well, there’s always daytime television. Settling back in a comfortable chair armed with the remote control and a cup of tea I start to graze through the daytime TV offerings. Not an enlightening exercise. I used to think that nothing in this world could equal the utter wasteland of American daytime TV. I was hoping that in the UK, where they are always trying to set cultural examples for the colonials, things might be a little better. Wrong, very wrong. Nothing but mindless game shows, equally mindless talk shows and idiotic, so-called ‘celebrity’ shows, programs about people looking for real estate in unlikely locations, and re-runs of programs that should have been declared dead a very long time ago. 
The Sahara desert has more life
Do British TV stations have nothing better on offer than yet another re-run of WW II with the likes of Dam Busters, Battle of Britain, and other epics revealing British valour and genius against the evil Nazis? The war ended more than 70 years ago. Surely there is something more timely on offer. Forget the war, how about endless re-runs of ancient detective shows like Columbo, Miss Marple or the same cowboy shows over and over again. John Wayne is OK. But morning, noon, and night?  Time to move on. Then there’s the always reliable BBC 4 that mercifully stays off the air until early evening. Then you’re bound to be riveted by worthy shows detailing things like the sex life of the anchovy. This is enough to drive anyone back to Stalin’s Moscow. By the way, it’s not just British TV that is fixated with World War II. Shelves in book shops groan with books on the Hitler period, but you will look in vain for anything about post-war Germany, the transformation from pariah to powerhouse.

The ultimate remedy 
After all this, plus the exercises one is supposed to do plus the slimmed down menu your wife has diligently prepared you’re completely knackered by the end of the day. Then you drift off to sleep with sweet dreams of Jimmy Buffet’s Cheeseburger in Paradise.

Wednesday, 30 November 2016

Ghosts From The Past Have Much To Teach Us

The growing number of leaders around the world wanting to turn their countries into stagnant ponds filled with frightened xenophobes should take a careful look at two of the two of the longest-lived empires the world has ever seen. They would learn that one of the main reasons for the 1,600-year collective longevity of the Byzantine and Ottoman empires in what was then, as now, a very troubled part of the world was their willingness to incorporate outsiders into the very fabric of the empire.

Unlike today’s leaders they saw the value, the necessity, of bringing fresh ideas, different experiences into the empire. Not for them the narrow-minded fear of ‘Johnny foreigner.’

The Byzantine Empire lasted about 1,000 years from the mid-4th century AD to the mid-15th century. During that time, it was surrounded by threats on all sides such as Persians, Avars, Russians, Bulgars, Latins, Visogoths, Arabs, Mongols, Turkic tribes, and finally the Ottoman Turks. The Byzantines are too easily dismissed in much of today’s history books as effete, unreliable, and more obsessed with bloody palace intrigue than true statesmanship. That simplistic characterization obscures their ability to adjust to rapidly changing circumstances. The 1,000-year run didn’t happen by chance alone.

Byzantine Emperors Justinian and Constantine presenting Haghia Sophia and city to the Virgin Mary

When strong enough, resort to military measures. When weaker, resort to diplomacy and what we call today ‘soft power.’ Compared to much of the rest of the region the Byzantine Empire, more particularly the glories of Constantinople, was so splendid that many foreigner rulers were gladly co-opted into that splendour and, in some cases, the Orthodox faith. The period was highlighted by strategic inter-marriages, alliances, financial tribute, trading privileges and much more. Jonathan Harris put it very nicely in his recent book The Lost World of Byzantium.

Thus if Byzantium has one outstanding legacy it is not perhaps Orthodox Christianity or its preservation of classical Greek literature. Rather it is the lesson that the strength of a society lies in its ability to adapt and incorporate outsiders in even the most adverse circumstances.”

            The Byzantine Empire finally and totally collapsed one spring day in 1453 when the Ottoman Turks succeeded where so many others had failed and breached the formidable walls that had protected Constantinople since the 5th century. The Byzantine Empire may have disappeared as a political and military entity, but the early Ottoman leaders were smart enough to maintain the essential characteristics of religious tolerance and using talent wherever they found it. Far from being frightened by religious or ethnic diversity these Moslem leaders valued the strength that diversity gave the Empire.

            In a new book, Aleppo, The Rise and Fall of Syria’s Great Merchant City, Philip Mansel recounts some advice that Suleyman the Magnificent gave to his council that was considering expelling Jews from the province in the mid-16th century.

“The more sorts of nations I have in my dominion under me as Turks, Moors, Grecians, etc. the greater the authority they bring to my kingdoms and make them more famous. And that nothing may fall off from my greatness, I think it convenient that all that have been together long hitherto, may be kept and tolerated so still for the future.”
Suleyman, perhaps the greatest of the Ottoman sultans
            The Jews stayed put in Aleppo and continued to contribute to Suleyman’s greatness. It is no coincidence that the ultimate decline of the Ottoman Empire was hastened when its rulers ignored Suleyman’s advice on the value of diversity. The greatest of Ottoman sultans must be looking on modern Turkey with great despair as the current rulers do their best to eradicate all traces of that tolerance and diversity.

            But Turkey is far from being alone in its headlong retreat from those two values. One need only to look at some of the countries in the European Union where walls and barbed wire have replaced Welcome signs. And then there’s Donald Trump in the United States. He not only has pledged to build a gigantic wall along the Mexican border but to expel more than 10 million immigrants now living in the U.S. The famous Statue of Liberty must be blushing at the thought of that happening.

            The shameful immigration ‘debate’ in Britain is so far a debate without any facts or even a real discussion. The anti-immigrant rantings of UKIP and many Tory members of parliament are taken at face value without a shred of proof that foreigners – specifically those from the European Union -- are taking over the country. The actual, official, numbers on immigration into Britain tell quite a different story – one that demonstrates clearly that crust-less watercress sandwiches and tea are not about to be replaced by kielbasa and vodka. But bringing this reality into the debate would require an act of statesmanship and political courage – two qualities completely lacking in the entire Brexit discussion up to now. Those two long-gone empires have a great deal to teach modern politicians.