Turkish Companies Are Expanding Rapidly -- Outside Turkey

 

The good news is that many of Turkey’s leading companies are making major investments and creating thousands of jobs. The bad news is that a great many of these investments are outside Turkey. At a time when Turkey desperately needs major industrial investment and increased employment these companies have found greener pastures elsewhere.

             They represent a wide cross section of Turkey’s large industrial base – textiles, glass, white goods, automotive, pipe manufacturing, and many others. This export of investments and jobs is explained in part by the simple fact that many of these companies are no longer just good local operators. They have outgrown the confines of Turkey as their skilled managers have grabbed growth opportunities spanning the globe. Turkish construction companies have long been active outside Turkey but now they have been joined by mainstream, large job-creating industries.

             The additional bad news for Turkey is that a number of global companies have taken a look at investment opportunities in Turkey and have decided to go elsewhere. This list includes Tesla, Volkswagen, and LG. There can be many reasons ranging from size of the market, labour quality and costs, distribution, etc. for deciding not to invest somewhere. I don’t know the specific reasons for these companies deciding to pass on Turkey, but in my experience of cross-border investments two of the major factors are rule of law and freedom from arbitrary regulations limiting movement of capital. In both cases Turkey comes up short. Exporters, for example, are required to sell their hard-earned foreign exchange revenues to the cash-strapped Central Bank.

             According to a report in the German news service Deutsche Welle, Egypt has been one of the major beneficiaries of the expansion of Turkish companies. One factor is, of course, the lower wage costs in Egypt. In Turkey the average monthly labour costs – for industries in the regulated part of the economy – are about $500 per worker. Monthly labour costs in Egypt are just $150. In addition, fuel costs are much lower in Egypt. This might explain in large part why Turkish companies like Arçelik, Şișecam, Temsa and Yıldız Holding have moved production there.

Beko has become a leading European brand

             Temsa makes buses and vans in Egypt and exports them to the rest of the world. Yeșim Textil operates factories in Cairo, Alexandria and Ismailia and supplies goods to world-famous sports brands. The giant white goods company Arçelik, known in Europe for its brands like Grundig and Beko recently invested $100 million in a new Egyptian factory. Many other companies like Iskefe Holding, LC Waikiki and the Eroǧlu Group have also announced additional investments in Egypt.

             At last count about 70,000 people in Egypt already work for Turkish companies. About one-third of all textiles and clothes in Egypt are now produced in Turkish-owned factories. By the end of 2023 investments by Turkish companies in Egypt could total $3 billion.

             This wave of outward investment by Turkish companies is by no means limited to low-wage countries like Egypt. Borusan, the country’s major pipe producer, recently purchased a pipe company in the United States for $160 million and now has four plants in the US that generate annual revenues of about $1 billion. Arçelik alone has 30 production facilities in nine countries.

Borusan pipe plant in Texas

            The huge, very successful Koç Group –  parent company of Arçelik and many others – has been in a partnership with Ford for decades. In 2001 the Ford/Otosan JV invested more than $2 billion in Turkey to build a greenfield plant to manufacture light commercial vehicles for the European market. Interestingly, in 2022 Ford Otosan acquired Ford’s plant in Romania for €700 million. The Romanian plant has now become the global manufacturing hub for Ford’s to light commercial models.    

Ford/Otosan added a Romanian manufacturing plant

            Şișecam has long outgrown Turkey and is now one of the top five glass manufacturers in the world. It is planning to invest more than $5 billion to develop two soda ash mines in the United States – not exactly a low-wage country.

             While Turkey can take pride that many of its companies have graduated to the major leagues of global industry, the country is hard pressed to find similar high value-added, job creating inward investment to equal the outward flows. Turkey’s official unemployment rate is just over 10%. However, few things are as misleading as official unemployment figures. Leading economists adjust this number sharply upward for huge marginal employment – several people at a petrol station doing nothing and getting paid less, significant seasonal employment, and the large unregistered segment in the so-called grey economy where wages are low and infrequent and benefits non-existent.

             Turkey’s new financial management team has made an impressive start in turning around the disastrous economic policies that led to spiralling inflation and a disappearing currency. But in order to attract significant inward investment and stop Turkey from becoming the Rust Belt of Southeastern Europe much more has to be done in areas like the rule of law to convince global companies that Turkey is a safe place to invest.

Erdoǧan Proves - Again - That The Medium Really Is The Message

 

    Once again Turkish President Tayyip Erdoǧan has proved the accuracy of Canadian communications theorist Marshall McLuhan’s statement that ‘the medium is the message.’

     In the recent Turkish presidential election, the medium was Erdoǧan himself who succeeded in obscuring the real message that he is the one responsible for driving the country near economic collapse and creating wide social/political divisions. The winning margin was not huge, less than 5%, but demonstrated clearly that his dominating presence on the campaign trail, generous use of economic handouts, and domination of the media made all the difference. He succeeded in identifying himself with just enough of the struggling sectors of society and painting the opposition as gray men in gray suits who want to solve Turkey’s economic problems on the backs of the poor. ‘I’m one of you. My social/cultural values are the same as yours. I’m not some distant westernized elitist who treats you like merely like wooden, unfeeling pieces on a chess board.’

Winner and still champion

    Erdoǧan was clever in acknowledging the economic problems of the average citizen but then strained all credulity by adding he alone could solve them. It’s a bit like an arsonist saying he is the best person to put out a fire. He backed up these statements by supplying things like free natural gas, discounted electricity bills, and increased free internet usage for students. ‘Forget the actual situation. Look at me. I’m helping you. The other bunch just wants to take away everything you enjoy in the name of economic orthodoxy.’ The fact that such steps make a bad situation worse is conveniently ignored.

 The government’s abject failure on the deadly earthquake – from amnesties for substandard construction to slow emergency response – was obscured by promises of rapid re-construction. Whether such rapid re-construction actually happens is another question.

 Will Erdoǧan’s personal popularity withstand a further drop in the economy? There is already speculation that he will try to recall the former deputy prime minister Mehmet Şimșek to help run the economy. Şimșek used to work as a financial analyst in London and at least understands the rudiments of conventional economic management.  For his sake I hope he turns down the offer to return. It would be a no-win situation. If, by some miracle, the economy improves Erdoǧan would take all the credit. If Şimșek is forced to continue Erdoǧan’s unorthodox policies and the economy crashes he would take all the blame and quickly be forced out.

 Much of the western media is moaning about the ‘end of democracy’ in Turkey and the return to dictatorship. It’s not that simple. By most accounts the result of the election really does reflect the will of 52% of the people. We might not like the result, but it does no good to blame the voters or the alleged failure of democracy in Turkey. Erdoǧan may have bent most democratic norms almost out of shape with his patronage and bombast, but the superficial norms of democratic elections were maintained. Rigging the outcome began years before the actual election as the institutions of the state were moulded – legally -- in Erdoǧan’s favor. He recognized that the simple truth that the person who controls the process controls the outcome. The only surprising thing for me is that his victory margin was not larger.

 Therein lies hope for the future. The fact that nearly 48% of the voters saw through Erdoǧan’s charade is encouraging. Tayyip Erdoǧan deserves a victory lap because this victory was his and his alone. The message was nowhere near as popular as the medium. I doubt that anyone else in his party could have pulled this off. Just look at the municipal elections when Erdoǧan was not on the ballot. Almost all his surrogates in major cities lost. Even in this election the opposition won majorities in all the major cities except Bursa.

 It will be interesting to watch the political manoeuvring within the ruling AKP party as well as the opposition coalition. There is already speculation on post-Erdoǧan leadership of the AKP. Will Erdoǧan try to insert one of his sons-on-law or will the very ambitious minister of the interior Suleyman Soylu make a run for the top spot? I doubt very much that any of these replacements can equal the sheer political magnetism of Tayyip Erdoǧan.

Is Ekrem Imamoǧlu a credible challenger?

 What about the opposition? Will the coalition hold together or will the charismatic mayor of Istanbul, Ekrem Imamoǧlu, make a run for leadership? He clearly outshone the opposition candidate Kemal Kılıçdaroǧlu during the campaign, but he was a good soldier and worked hard for Kılıçdaroǧlu. Turkish politics is a very rough sport and I hesitate to make any predictions. Nothing creates enemies faster than an early claim to leadership. There is very little that Erdoǧan would not do if he sees Imamoǧlu as a serious threat to his own plans.

 There will be many candidates claiming to be the only ones able to repair Turkey’s economy and torn social fabric. For outsiders it will be fascinating spectator sport. For frustrated, disheartened people inside Turkey it will be far more serious.

Turks Got Their Strong Leader. But Where Will He Lead Them?

    A good friend from Istanbul succinctly summed up his feelings about the recent election results. ‘Welcome to Venezuela without the oil.’

  Turkish President Tayyip Erdoǧan is on track to defeat his opponent Kemal Kılıçdaroǧlu fairly easily in the second round of the Turkish elections If he does indeed win there will be much gnashing of teeth in the large urban areas of Istanbul and in the Western media. How could this happen? How could this nightmare come again and again? There must have been massive fraud.

     Unfortunately, not. He didn’t need to resort to much fraud for several reasons. When you control all the security services, the judiciary and almost all the media you make sure yours is the only narrative that gets heard by people every day and night. The message that all of Turkey’s well-documented problems can be blamed on others, particularly foreigners, is pounded home again and again. Instead of being the problem you become the only solution.

    

What will he do with his latest victory?

        Turks abroad, especially in Germany with its 1.5 million Turkish voters, were fed a daily diet rich in resentment and alienation where many Turkish workers were portrayed as second-class citizens.  The sub-text was simple. Only AKP can restore your sense of pride and welfare in this place where most people regard you merely as something they scrape off their shoes. The reality that the vast majority of Turks and other immigrants in Germany are usually treated well is glossed over.

             Underneath these messages lies another reality. Over the years AKP has built a formidable political organization capable of turning out the vote. AKP apparatchiks are very good at the nuts and bolts of successful politics. Voters can shrug off the deafening rants filled with lies and distortions if the local AKP official can help them slog through the bureaucratic quagmire that plagues everyone’s life. None of this work is glamorous but it is the glue that binds voters to leaders.

While it’s obvious that overall economic conditions have deteriorated, much of the blame has been shifted to vague, impersonal – often described malignant foreign – forces beyond any reasonable person’s control. Abstract issues like independent judiciary and human rights that resonate so loudly in European and American media count for very little against the quality of local services.

Nice guy, but still in second place

             It also helped that Erdoǧan is a much more seasoned, charismatic campaigner than any of his opponents to date. He is very skilful at doling out patronage while blaring a simplistic, distorted message to voters. Essentially, he is telling them that he is their only hope against the forces of atheism, foreign intrigue, pernicious liberal influences and others who would deny Turkey its justified place at the High Table of powerful nations. The reality that his policies have driven the country into bankruptcy is conveniently swept under the rhetorical onslaught of populism and nationalism. The fact that he has turned an old saying, a Turk has no friends but a Turk, into a reality is presented as a matter of pride, a badge of honour. Us vs. Them!! Turkey vs. the World!! Against this tsunami of conspiracy theories, pride, and lavish handouts the country can’t afford it would take someone much more charismatic than the mild-mannered Kemal Kılıçdaroǧlu to survive.

     One knowledgeable friend said the mayor of Istanbul, Ekrem Imamoǧlu, would have been a much stronger candidate. But then, she added, ‘Erdoǧan would have cut him off at the knees once he became a real threat.’

             So what happens now? Given the victory of populism and intense nationalism the country will undoubtedly slide further from the West whose liberal ideals are not welcome in Erdoǧan’s Turkey. But it is not clear where it will slide to. The country has no natural allies (Azerbaijan, maybe) and its relationship with Putin’s Russia is purely transactional. The Arabs? How much are they really willing to help Turkey besides buying up valuable assets?  The security services will be strengthened and any sign of dissent will be ruthlessly stamped out. Unfortunates like Selahattin Demirtaş (leader of the Kurdish HDP party)  and Osman Kavala (a philanthropist  thrown in jail on some vague charge related to the Gezi Park protests in 2013) will probably remain behind bars. The country’s economy will continue to sink with yawning budget deficits and a rapidly depreciating currency. The Central Bank is beyond broke. I would not be at all surprised to see some sort of currency controls, however disguised, to slow the depreciation of the Turkish Lira. Such controls will be sold to the people as an act of economic nationalism. ‘Let’s free Turkey from the evils of foreign influence.’  

     Erdoǧan may occasionally sound bellicose on the international front, but in reality there’s not much he can do. Foreign military adventures cost a great deal of money, which he doesn’t have. Media barons will breathe a sigh of relief at their continued financial well-being and continue to fill the airways and papers with pro-Erdoǧan propaganda. Why bother with anything resembling real news when that pays so well?

       I am reminded of what British Prime Minister William Pitt the younger said when he learned of Napoleon’s crushing victory against the Russians and Austrians at Austerlitz in 1805. ‘Roll up that map of Europe. It will not be needed these 10 years.’ The same sense of sadness and weary resignation permeates people who had hoped for a change in Turkey. It will take time, but sooner or later a strong alternative to Erdoǧan will emerge.

 

 

Who Will Be The Lucky (?) Person To Win The Turkish Election?

 

One can get a headache focusing on all the conflicting Turkish election polls. According to various polls President Tayyip Erdoǧan or his main challenger Kemal Kılıçdaroǧlu is a) going to win easily, b) lose in a tight race in the first round, c) win handily in the second round. Take your pick.

 Meanwhile headlines scream about election alliances being formed and broken. Little-known  politicians who will soon sink into their well-deserved obscurity claim their support is crucial for anyone who wants to win. This is their moment in the sun, and they are milking it for all it’s worth. These fringe party candidates can only hope that even though they will be lucky to get 3% of the total votes that will be enough to deny either Erdoǧan or Kılıçdaroǧlu victory in the first round where the winner has to get 50%+1. Then their small votes become extremely valuable and can be sold at a high price in a run-off vote.

 In reality, I doubt anyone has a clue about the outcome. While it’s clear that Erdoǧan is facing severe headwinds – economy, earthquake response, voter fatigue with his bombast, etc. – it is not at all clear that the alliance of six parties backing Kılıçdaroǧlu can generate enough excitement to beat him. There’s no doubt that a large part of the voters would be happy to see the end of Erdoǧan’s 20-year rule that has seen the once-promising economy crumble and concepts like the rule of law casually thrown out the window. But is that enough to get them to vote for Kılıçdaroǧlu? No doubt he is a nice, honourable person. But, sadly, such people have a hard time in the full contact sport of Turkish politics. Can Kurdish voters push him across the finish line? Will the Kurdish support push the nationalists back toward Erdoǧan?

 

Who knows which way their votes will go?

What about fears that Erdoǧan will try to rig the elections if he thinks he is losing? More easily said than done. The usual ‘retail’ method of vote rigging by stuffing the ballot boxes is difficult because of all the observers at each polling place. Also, it’s difficult to stuff enough votes at that level to make much of a difference. If Erdoǧan does anything it will likely be at the ‘wholesale’ level of forming alliances with some very strange partners. He is already doing this with Hezbollah look­-alikes and other stray cats and dogs. He certainly has enough money to buy additional support. There are many, many businesses – mainly construction – who made billions during his reign and are nervous about their future contracts should Erdoǧan lose. They would gladly contribute whatever is required to keep the good times rolling.

One of these two will face severe post-election challenges

 A scenario that is discussed only in hushed, fearful voices is the possibility of staged violence disrupting the elections. While the chances are slim that mobs inspired by whatever candidate appears to be losing could ruin the election some observers think those chances are not zero. It is unfortunately fairly easy to organize a rent-a-mob in Turkey, and some people will be anxiously holding their breath on election day and its immediate aftermath.

 One big problem Erdoǧan faces is the changing nature of the Turkish electorate. He used to rely heavily on votes from rural areas and smaller Anatolian cities to help him overcome the so-called urban elite he claimed was closer to Paris than to the ‘authentic’ Turkish homeland of Anatolia. Now rural Anatolia has largely disappeared after waves of migration to Turkey’s largest urban areas like Istanbul, Izmir, Ankara, Adana, Mersin, Eskișehir, Bursa, and many others. As we saw in the latest municipal elections most of these huge urban agglomerations are now firmly in the control of Erdoǧan’s main opposition, the Republican People’s Party. Erdoǧan may have retained the loyalty of the first generation of Anatolians who moved to the cities, but their children and grandchildren have become used to big city life and are less impressed by Erdoǧan’s rants and raves than their elders.

 Then there is the question of what Erdoǧan will do if he, by some chance, actually loses. Will he and his desperate supporters go quietly into the night? Will he go Full Donald Trump and say the election was stolen from him? Will the winner -- aware of troubles a resentful, angry Erdoǧan could cause – make some sort of deal with him?

 If Erdoǧan wins the post-election political scenarios are clear. Anyone, within his own party or without, who showed the slightest reluctance to re-elect him will be cast into the political and financial wilderness.

 Less clear is the post-election outlook for the country regardless of who wins. Unfortunately, it will be extremely difficult to restore the economic balances easily. How do you bring interest rates, the currency and inflation to acceptable levels without further disruption? How do you restore issues like the real rule of law, transparency, and, perhaps most important, hope for the thousands of young people who now believe their best opportunities lie outside Turkey. One doesn’t know whether to congratulate the winner or commiserate with the challenges he will face.

 

 

 

Is The Erdoǧan Era in Turkey Drawing To A Close? Maybe. Maybe Not.

 

Maybe, just maybe, after more than 20 years in power Tayyip Erdoǧan’s iron grip on the Turkish presidency could be slipping. While the opposition parties may yet find their usual way of snatching defeat from the jaws of victory, current signs indicate a major change in Turkey after the presidential and parliamentary election on May 14. The stakes are very high for both sides.

Even if the opposition wins, however, it might discover that the election was the easy part. Then what? Given the enormous domestic and international challenges facing Turkey regardless of who wins the victor will enjoy a very short ‘victory lap’ before dealing with decades of economic, administrative and judicial mismanagement.

         Beset by a weak economy, high inflation, and Central Bank with only enough money for a couple of glasses of tea, Erdoǧan was already facing a restive, angry electorate before his problems were compounded by the disastrous earthquake in southeastern Turkey that claimed about 50,000 lives and destroyed hundreds of buildings. Stories of shoddy, sub-standard construction, amnesties for contractors and abysmal emergency response from the central government have fuelled growing anger and fury among key sections of the population.

     The opposition parties have for once learned something from their multiple defeats over the years. Rather than enter the elections as individual parties – none of which would ever get enough votes to topple Erdoǧan -- they have opted to form a coalition, albeit an awkward one, of six parties and unite behind a single candidate. The candidate they have chosen is long-time head of the CHP – Republican People’s Party – Kemal Kılıçdaroǧlu whose mild appearance and manner belie his surname – Son of Swordsman.

Can Kılıçdaroǧlu pull off the biggest win of his career?

    Some say the 73-year-old Kılıçdaroǧlu lacks the charisma and forceful character that draw many to Erdoǧan. Others opine that many in the country are sick and tired of Erdoǧan’s bombast and hope for quiet competence over aggressive incompetence. Whether that long-desired competence would be forthcoming with new leadership remains to be seen.

     However, and it is a huge ‘however’, one should be very careful about writing Erdoǧan’s political obituary. The political waste land is filled with people who underestimated him. He is a formidable campaigner and his party, AKP, has proven to be a well-oiled election machine. He has an intensely loyal voter base including thousands who are desperate to hang onto the positions and favours they have gained over more than two decades. The vast majority of the media is in Erdoǧan’s control, and they face financial disaster if he loses and their lucrative subsidies disappear. The security services and courts are also firmly in his hands. He will also throw vast amounts of money at key blocks of voters to keep them on his side.

One should never underestimate Erdoǧan's political skills

 In short, he has all the tools to try and bend the results in his direction. This doesn’t necessarily mean simply stuffing ballot boxes. For example, Kılıçdaroǧlu is an Alevi – a distinct type of Islam considered by some orthodox Sunni Moslems to be similar to the despised Shiites. Erdoǧan or his acolytes could fan those differences in an attempt to keep the hard-line Sunnis from voting for Kılıçdaroǧlu. There could also be a manufactured international event to keep the secular nationalists on his side. But with less than two months to go until the election Erdoǧan’s room for maneuver is beginning to shrink.

Kurds, the largest minority group in Turkey with about 15% of the population, make up the absolutely critical block of voters – literally the king makers. If they stay unified – always a question – they have the ability to swing the election to their favoured candidate. Conventional wisdom is that they will support anyone who opposes Erdoǧan and who promises to make their life a little easier. However, the opposition coalition is not united on this issue. For example, one of the coalition parties contains hard-core nationalists who tend to view the Kurds as a threat to the unity of Turkey. You can be sure that Erdoǧan will do everything in his power to fracture the opposition coalition and he is not above using the Kurds to do just that.

Selahattin Demirtaş, imprisoned leader of the Kurdish political party

 Let’s assume for a moment that the opposition wins and Kılıçdaroǧlu becomes president. A first, millions will be thrilled that Erdoǧan is gone. When that wears off things very quickly get interesting and unpredictable. The opposition coalition has promised to change the governing system from a strong president and weak parliament and return to the previous system where parliament was supreme and the president had little power. The ability of the new government to implement major changes will depend on the make-up of the new parliament and which party has the most seats. I anticipate ‘vigorous’ bargaining among the parties and a constant series of changing voting blocks depending on the legislation being considered.

 Spare some pity for the person put in charge of the economy. His in-box will be overflowing. What will he do with interest rates? How will the currency react? How, exactly, will he tame inflation without hitting living standards even more? Where will he get the money for all this economic restructuring? Will he turn to the IMF? And on, and on, and on.

 What about international relations? My guess is that there won’t be much change. Probably a little less confrontational, especially with the West. After all, that’s where most of the economic assistance could come from. But the underlying delicate balancing act with Russia will most likely continue. Who knows what Putin will do if his buddy Erdoǧan loses. He could demand immediate payment for the previously delayed gas payments. Russia is rumoured to have deposited more than $20 billion in Turkish state banks. That could be quickly withdrawn. Sweden would probably, somewhat grudgingly, be allowed to join NATO – especially if the Americans go ahead with upgrades to the F-16 fighter jets. The volume and tone of the exchanges with Greece could change. Turkey would still harbour a grudge about issues involving maritime territorial rights or exploration rights for natural gas, but the temperature of those complaints could be dialled down.

 I have followed Turkish elections for more than 30 years, and this is by far the most interesting, as well as the most important, one. The pieces of the puzzle are constantly moving and only a fool would try to predict the outcome at this point.

Will The Disastrous Turkish Earthquake Also Cause A Political Upheaval?

 

In addition to the thousands of personal tragedies following the recent disastrous earthquake in southeastern Turkey the catastrophe has also stripped away the carefully constructed mirage of competence and progress that President Tayyip Erdoǧan has tried to create. Laid bare in one horrible morning were the consequences of replacing the painstaking, difficult task of building solid economic and social foundations with glittering, weak façades.

Grieving father holds the hand of his deceased daughter

As we discovered in a recent trip to Istanbul, the façade is apparent the minute the plane lands. The airport is huge and filled with modern conveniences, roads leading into the city are wide (and usually jammed with cars), decaying warehouses along the old port have been replaced with super modern shopping areas and hotels with astronomic prices, a modern, clean metro system speeds you around the sprawling city and under the Bosphorus. Alas, the financial foundations of all these developments are as weak as the building foundations in the earthquake zone. Most of these projects were financed with foreign currency loans guaranteed by the Turkish government. With inflation at more than 60% and the currency steadily losing value repayment of these loans is becoming more and more difficult.

A cursory look at the country’s finances reveals a completely misleading picture. Central Bank reserves, for example, have been propped up by short-term borrowings (Swaps). Russia has deposited a large amount of foreign currency – the exact amount is unknown – into Turkish state banks. Russia has also told Turkey it can delay payment for the natural gas received from Russia. Turkey does not recognize EU or US sanctions and happily trades with Russia and Iran. All this helps in the short run. But peel away the gloss and a different picture emerges.

 Even without the horrors of the earthquake the country was in dire financial shape. Without all the short-term financing the Central Bank is left with minus, I repeat, minus $45 Billion. As if this were not bad enough the Central Bank is spending – wasting, really – up to $40 million a month in a fruitless effort to defend the Turkish Lira. The government will do everything it can to keep the Lira from spiralling out of control downward– again – before the presidential elections scheduled for this spring. On top of this already shaky foundation estimates of the economic cost of the earthquake range up to $100 billion. No one is quite sure where this money will come from. Even Erdoǧan’s new best friends in the Gulf might hesitate at giving this much.

 But the real questions – questions that will dominate the political landscape – surround the squalid construction that cost so many lives. As survivors crawled from the rubble, they blamed all the destruction on sub-standard construction. ‘Earthquakes don’t kill people. Badly built buildings do,’ was the constant refrain. Reports quickly emerged of contractors using substandard cement, substandard steel reinforcing rods, and, worst of all, building on or near well known fault lines. This picture was dramatically reinforced with pictures of properly constructed buildings that suffered little or no damage next to others that had completely collapsed.

 People are understandably furious and raising questions Erdoǧan wishes would stay buried in the rubble. He has relied on construction to fuel economic growth during his long stay in control. In return for winning projects contractors supported the ruling party and took over the vast majority of broadcast and print media in Turkey. Turkey has many zoning and construction regulations concerning building in the country’s many and well-known earthquake zones. To say these were ‘overlooked’ is putting it mildly. What is worse, and could come back to haunt Erdoǧan in the election campaign, is that this incestuous relationship with contractors was reinforced in 2018 when the government passed a comprehensive amnesty for these same contractors. (Click on this link to see a video of collapsing buildings. Since this video was taken the death toll has reached almost 45,000.)

 While it is clear that the earthquake and revelations about the government’s lax treatment of building codes will hurt Erdoǧan during the elections no one should assume that the opposition has an easy road to victory. After more than 20 years in power Erdoǧan controls every facet of Turkish government. The judiciary, security services, mass media, education, health, etc. are in his complete control. In the early years of his rule there were many qualified, hard working bureaucrats in key ministries. Over the years they have all been driven out and have been replaced with non-entities whose only qualification is complete loyalty to Erdoǧan. Their personal power might extend to ordering a cup of tea. Beyond that they won’t lift a finger before clearing it with Erdoǧan. Whatever independent thought they may have is wisely left at home.

 Despite this level of control the fact that the opposition has a real chance is a huge credit to the Turkish people and demonstrates vividly the difference between Turkey and other countries in the Middle East. Can you imagine Syria allowing independent legal teams into the earthquake zone looking for evidence of negligent construction? Not too likely. Turkey is extremely fortunate in having a large, well educated, well-travelled middle class that shows every sign of rejecting Erdoǧan’s dogmatic rule. The Turkish economy is open to the rest of the world and many of its companies span the globe. In addition to the angry middle class, many in the lower economic strata are also fed up with high inflation that makes it extremely difficult to make ends meet.

 It is much too early to predict the outcome of the presidential election that will probably take place in May or June. Despite the current anger about the earthquake Erdoǧan holds immense power and can shower favoured segments of the population with money. With votes for Erdoǧan and the opposition fairly close it seems the Kurds will be the kingmakers. The Kurdish population is about 12 – 15 million (out of a total 85 million) and if they vote in a bloc they can tip the outcome in any direction they want. While they have no reason to like Erdoǧan there is no guarantee they will vote for the opposition. There will be a lot of hard bargaining.

 As one young Turkish friend put it, ‘This is the most important election in the history of the Republic.’ I think he is right. But spare some pity for whoever wins. He will face a mammoth reconstruction job that will tax the skill and energy of everyone in Turkey.

To Really Understand America Look Beneath The Bad (Very Bad) Amateur Theatrics in Washington

 

Social media as well as the regular press and broadcasters are outdoing themselves in proclaiming the unbridgeable chasm in American social, cultural and political life. According to the blaring headlines the country is about to break out in yet another civil war – Red vs. Blue, Urban vs. Rural or any other opponents one can think of. How much of this hysteria is based on some semblance of reality and how much is merely overblown self-important rhetoric from observers who need to spend more time outside Washington, D.C.?

 Yes, political representation on the national level is evenly balanced between the Republicans and Democrats. That balance in and of itself is not necessarily a bad thing. And each party has its fair share of loons who forgot to take their medication. They yell and scream in front of any media outlet they can find in a vain effort to seem relevant. And the Republican agit-prop nonsense going on now as they try to elect a sane Speaker of the House only strengthens this image of total ungovernable confusion.

 And the media, for its part, is just as guilty. It loves the noise and pseudo-excitement. Instead of bothering to investigate and report on serious trends in American life they focus on the low hanging fruit of the ridiculous antics of some of our elected representatives. Just look at the front pages of national newspapers or banners screaming across many websites. Their whole focus is on superficial politics – who is gaining in the polls, which congressperson was found in unnatural acts with a goat, who is proposing that his or her opponent should take a one-way trip to Mars? And who – hold your breath – was caught in a lie? Who needs the sports pages or comics when we have this entertainment on a daily basis?

 Listen to this cacophony long enough and one can be forgiven for thinking the country is on the brink of disaster. A lot of this noise is due to what I call the ‘Trump Effect.’ Narrowly elected by the revulsion against ‘politics as usual’ Trump soon revealed the truth of the saying by journalist H.L. Mencken more than 100 years ago. ‘On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.’ Now it appears that the worst of the Trump effect may be passing. His faithful, the same ones who have followed every loud-mouthed huckster throughout American history, may cling to him but as we saw in the midterm elections normal Republicans are looking and voting elsewhere. There will be deeply conservative candidates in the future but most of them will not manifest the same deep personality disorders that plague Trump.

 If those Washington-obsessed observers would take the trouble to look beneath the surface they might find something interesting, counter-intuitive – the country tends to work. What the observers miss is that the American federal system means that the individual states, counties and municipalities actually control most of the things ordinary people care about – schools, public safety, transportation, public works, planning permissions, zoning. Unlike most of Europe, almost all the expenses related to those issues are raised through state and local taxes - not from the federal government. Folks in Washington can yell and scream and dominate the headlines, but if you want a road repaired or school improved you talk to local administrators. It really doesn’t matter if you’re in deep red Wyoming or electric blue Massachusetts. The local issues are pretty much the same. The solutions may vary from state-to-state but that’s the strength of the federal system. One size does not have to fit all.

Town meetings work much better than Washington

 If the UK is serious about giving the regions more power the first thing it could do is give those regions more power to raise local taxes.  The much-discussed devolution in the UK is toothless without local taxing power. I once asked the mayor of Atlanta, Georgia how much of the city’s budget comes from municipal and/or state funds. ‘More than 90%,’ he answered. We were seated next to a council member from a large English community. He sighed in envy at his Atlanta counterpart and said those figures were reversed in his town where more than 95% of funding came from the central government.

State Houses like this have as much clout as Congress

 Years ago, I covered local towns in Connecticut as a very junior reporter. I learned first-hand just how much people in those communities cared about town meetings where taxes were determined, school board meetings where difficult budget decisions were made or – most heated of all – zoning board meetings where issues like green space, industrial or commercial space were discussed often until the wee hours of the morning. No one cared that much about what happened in Washington, D.C.

 So the next time some blaring headline hollers about America coming apart at the seams just take a deep breath and find a story about local citizens coming together on a local project. Those stories don’t often make the front page, but they’re much more important and affect many more people than what passes for so-called news these days.