Tuesday, 23 September 2014

Reality Is Beginning To Hit Home

I doubt very much that Turkish President Tayyip Erdoğan has had much time to read about Voltaire’s ever-optimistic character of Pangloss in Candide or to learn about the young girl Pollyanna in Eleanor Porter’s famous work of the same name. But if he did he would learn that he shares the same basic trait as these two characters. Everything is rosy and fine in Erdoğan-world where reality is seldom, if ever, allowed to penetrate.

            But now, cold, hard, unyielding reality is finally beginning to challenge Erdoğan’s rose tinted vision of Turkey’s unstoppable economic growth and rapidly developing political importance. And he, as usual, is not happy about this. Only the total sycophants and house-broken media can continue to maintain with a straight face that black is white – that the economy is still growing strongly or that the country’s erratic foreign policy has not created a huge problem on its southern border.

            Rather than focus on the reality of Turkey’s economic and political challenges the president prefers to focus on the superficial status symbols of his so-called ‘New Turkey.’  Forget the reality, how better to prove Turkey’s importance – at least to himself – than to buy a large new presidential plane or to build a 1,500-room presidential palace to the replace the more modest, historic presidential residence.

            Why grapple with difficult, real problems like rising unemployment, declining growth and an alarming increase in industrial fatalities when you can use mere symbols of power like a fancy plane and a new palace to disguise the darkening reality? It would have taken a very brave adviser to show him the story in Forbes about Turkey’s growing problems.

            As usual Erdoğan’s default response to any bad news is to blast the bearer of that news. When the rating agencies warn of looming problems for the economy and possible downgrades, the president yells that they are nothing but tools of Turkey’s enemies trying to ‘keep Turkey down.’ This type of school yard response used to play well in the hinterlands. But I wonder how it continues play when increasing numbers of young people can’t find jobs or prices in the market place keep spiralling upward?

            Despite the rapidly depreciating currency and the country’s continuing need for at least $200 billion of foreign inflows every year to cover debt service and the current account deficit, Erdoğan and the comical minister for industry continue to demand lower interest rates. They demand growth regardless of damage to the country’s delicate financial balances.   The president is annoyed with the semi-independence of the Central Bank and has proposed moves to make it subject to its political masters

            A friend in London put it very well. “Erdoğan has consistently mistaken favourable global financial conditions for his own supposed economic genius. Turkey is now one of the countries most exposed to potential changes in those conditions. For the time being we remain invested in Turkish debt. With global interest rates so low you can still make money borrowing dollars and buying that debt. But, my finger is on the trigger. At the first whiff of change I am out of there.”

            The New York Times is the latest to make his ever-lengthening enemies list with a story about the radical Islamist group ISIS recruiting in the middle of Ankara. In addition to presidential insults the author of the piece, who happens to be a Turkish woman, was subjected to vicious abuse from all the flunky media. One of the papers published her picture and encouraged ‘loyal’ Erdoğanites to teach her a lesson. I couldn’t figure out if they were challenging the accuracy of the story or simply angry that someone had the nerve to show what was really happening. The loyalist media also made a big deal out of Erdoğan’s refusal to meet with The Times when he was in New York. I’m not sure if the Times editors were upset or relieved with this development.

            The timing of the Times story was particularly delicate because it came shortly after another column in the Wall Street Journal suggested that Turkey is no longer much of an ally, and perhaps the United States would be well advised to move its large airbase in southern Turkey to friendlier places like Kurdistan.

            The whole sorry situation on Turkey’s southern border with Syria and Iraq has the feel of ‘chickens coming home to roost.’ Turkey bet heavily on the overthrow of the Syrian regime and did its best to supply the Sunni opposition with weapons and other logistical support. The fact that much of this support went to radical Islamist groups didn’t seem to bother too many people in Ankara. Refugees from the fighting poured into Turkey creating serious social problems in the south.

Syrian refugees desperate to enter Turkey

            Then the radical Syrian opposition morphed into a powerful armed group called ISIS that swept into Eastern Syria and Iraq like a fire-storm. The group even captured the Turkish consulate in Mosul and took 49 hostages. The Turkish government now had a real problem. Its supposed Sunni friends were running amok and exposing Turkey’s helplessness. Hundreds of thousands of additional refugees were pushed across the non-existent border into Turkey.

            Out of deference to its own hard-line Sunnis or genuine concern about the hostages Turkey refrained from joining the growing anti-ISIS movement led by the United States. Then the hostages were suddenly released for reasons still not clear. Was Turkey’s abstention from the anti-ISIS coalition the quid-pro-quo? Did Turkey agree to release a number of radicals held in its jails? What is clear is that Turkey’s far south is in complete turmoil, and the government has yet to decide just what to do about it – if anything.

            It is obvious why Erdoğan would love to continue denying reality and, like Voltaire’s Dr. Pangloss, convince his countrymen that ‘this is the best of all possible worlds.’ There is a critical national election next spring, and he needs his party to score an overwhelming victory. If he gets enough seats in the next parliament he can force a constitutional change to create the strong executive presidency he has always wanted. If reality continues to puncture his self-created dream world it will be difficult to secure that victory.

Sunday, 7 September 2014

Time To Come Up With A New Idea On Cyprus

Cyprus is one of those issues that illustrates clearly the difficulties facing any well-meaning envoy trying to solve the long standing political/social problems in the Eastern Mediterranean and Middle East.

The envoy starts off by making one fatal assumption -- that either side actually wants any sort of a reasonable solution.That, in the immortal words of Sportin’ Life in Gershwin’s Porgy and Bess, Ain’t Necessarily So. The key word here is reasonable, i.e. any solution that involves that dreaded concept of compromise. Neither side sees any need to budge. All parties to these conflicts are absolutely convinced of the ‘self-evident’ religious or political righteousness of their cause and the ‘obvious’ perfidy and heresy of their opponents. Sunni, Shiite, Palestinian, Israeli, Turkish Cypriot, Greek Cypriot. It makes no difference.

They will swear they want a solution and are perfectly happy to bury the hatchet – as long as that hatchet is buried deep in the head of their opponent. A compromise is where one or two of their opponents is left gasping for air in a ditch by the side of the road.

Cyprus has seen a great deal of conflict in its long history, and the latest chapter started in 1974 when Turkey landed troops and occupied most of the northern part of the island. The Turks maintain they were protecting the beleaguered Turkish minority against marauding Greek Cypriot gangs. The Greek Cypriots maintain this intervention was an invasion, pure and simple. You can be excused for thinking this sounds ominously like the current stand-off between Russia and the Ukraine. And there we stand, 40 years later. The Turkish troops are still there. And the island is still divided between the Turkish Republic of Northern Cyprus – recognized only by Turkey – and the internationally-recognized Republic of Cyprus in the south. It must be somewhat galling to the Turks that a hold-over from the Middle Ages -- The Sovereign Military Hospitaller Order of St. John of Jerusalem of Rhodes and Malta – that does not have one square meter of territory has diplomatic missions in more than 100 countries while Northern Cyprus has just one.

There was one abortive attempt at a settlement in 2004 with the much-criticized Annan Plan that the Turkish Cypriots overwhelmingly approved and the Greek Cypriots overwhelmingly rejected. Now that Cyprus, at least the Greek controlled part of Cyprus, is in the European Union, it has very little, if any, incentive to compromise on any point. And the Turkish Cypriots will accept nothing that treats them as a minority in a Greek Cypriot controlled island. However, the native Turkish Cypriots even now don’t have that bad a deal. Among other things, they can get Cypriot passports and are thus de facto members of the EU, something their cousins on the mainland see as a rapidly receding dream.

The United Nations has recently dropped a new envoy, a Norwegian with an impressive CV, into this mix. Good luck to him at squaring the circle. Actually, one of the best ideas I have heard on this issue came from a brilliant Greek friend of mine during a recent lunch in London. His plan was strikingly simple, and therefore most likely doomed at birth.

Under my friend’s plan the Turkish controlled part of the island would become a separate state with the full acquis communautaire of the European Union with full freedom of movement and settlement. In return the Turks would remove their remaining troops from the island. In addition the three guarantor powers – Turkey, Greece, and the United Kingdom – would give up those powers. In theory, a member of the EU does not need any external guarantees. Again, in theory, the Greek and Turkish Cypriots would be free to live and work anywhere on the island.

Britain, always nervous about a solution that changes the legal status of Cyprus and thus calling into question the legality of its bases on the island, would require separate guarantees protecting those bases. In addition, there would have to be agreement on the issues like the exact borders and the compensation for those members of both communities whose property was lost during the military intervention. Here I would anticipate typical EU legerdemain where there is quite a bit of EU money disguised in such a way to persuade the average German taxpayer that he is not footing the bill – again.

Before the Greeks throw up their hands and starting loudly whinging about ‘rewarding’ military intervention they should think carefully about the benefits of this plan. They get rid of the Turkish troops, both sides are governed by EU regulations, the threat of future Turkish intervention is removed, and the island’s moribund economy might start to grow. Furthermore it becomes much easier to develop whatever natural gas lies offshore. Instead of building a hugely expensive liquefied natural gas terminal on Cyprus they could take the easy route with a pipeline to nearby Turkey and then onto Europe.

The Turks should also welcome this. The isolation of northern Cyprus is ended, Turkey no longer has to provide hundreds of millions of dollars it doesn’t have to subsidize the Turkish Cypriots, and a major hurdle in its own EU quest is removed. Essentially it can bow out of the Cyprus quagmire with honour maintained.

Is something this simple in theory likely to happen? Very doubtful. Given all the history and entrenched attitudes I’m afraid the new UN envoy, Espen Barth Eide, will have his hands full getting the two sides to agree to a lunch menu much less a realistic solution. It would be nice, though, for once to see common sense prevail in a part of the world that sees precious little of that valuable commodity.