Islamist upturn threatens reform

The IMF has disbursed $13 billion to Tukey this year and claims to see widespread support for economic reform in the country. But the summer’s political crisis has raised the prospect of electoral success for the Islamists.

       
Recep Tayyip
Erdogan

Turkey looks set to have an assembly dominated by two extremist parties, the Islamists and ultra nationalists, after the November 3 general election.

Opinion polls in mid-August unanimously confirm that the Justice&Development Party (AKP) is in the lead and stands to gain around 20% of the vote – nearly double that of its closest rival. But the peculiarities of the election law means it is uncertain that this will give the AKP a majority or even enough seats in the legislature to be a part of the government.

Under the election law only parties that get more than 10% of the vote gain seats in the 550-member Meclis. The only other party definitely above this threshold is deputy prime minister Devlet Bahceli’s ultra right-wing Nationalist Action Party, which is forecast to receive around 11% of the vote.

The five other mainstream centre-left and centre-right parties are on the borderline and may or may not make it into the Meclis.

The percentage of the vote won and the percentage of seats gained in the Assembly are not proportional, the latter being greater than the former. This is because all the votes cast for parties that fall below the 10% threshold are divided among the parties that are above the threshold. The distribution is not even. The bigger the vote the more seats a party wins. Thus, there is the possibility that the Islamists might win an outright majority and form a majority government with only around 20% of the popular vote.

“This is an outcome that the markets would find very disturbing,” writes Marco Annunziata, economist at Deutsche Bank. In an unorthodox move, the bank has created what it has called its election weathervane, commissioning a polling company to conduct periodic surveys until the elections.

It is not only the markets that are averse to a government dominated by Islamists. The Islamists are mistrusted by many sections of the Turkish establishment, not least the army, which plays a dominant role in politics and is strongly secular. Since 1974, when the Islamists first became part of a government, their parties have been closed down and their leaders jailed on many occasions. In 1997 the generals forced Necmettin Erbakan, Turkey’s first Islamist prime minister, to resign after only a year in power. This was not Erbakan’s first brush with the army. He was also a partner in the government that was toppled in 1980. Erbakan’s party was closed down and he spent time in jail.

The prospects of an Islamist-dominated government are also worrying Turkey’s western allies, not least the US, which is counting on Turkish support for the planned invasion of Iraq.

“It would be appalling if the Islamists were to be a part of the government,” says a western diplomat.” I don’t trust these people one millimetre.” A coalition between AKP and the ultra-nationalist MHP, which is opposed to economic reform, would be equally unwelcome. In 1980, when the Turkish generals seized power amid near civil war, two of the parties in coalition were the predecessors of AKP and MHP.

       
Bulent Ecevit

Kemal Dervis, the popular former economy minister, has tried to put together an alliance of centre and centre-left parties in order to forestall an electoral victory by the extremists. Although in theory this made sense, in practice it was futile because Turkish politicians have little inclination to put aside their differences for a common cause. Not surprisingly, Dervis failed partly because he was politically naïve and partly because the task he set himself was almost impossible. Dervis spent all of his adult life abroad, most of it at the World Bank, and has little first-hand experience of Turkish politics. If anything, his intervention has made matters worse by deepening the hostility between the three parties that make up the Turkish left.

All three parties on the left of the spectrum have said they have no plans to join any alliance. Each will gamble on the chance of its being the only one to scrape through the threshold.

Although AKP’s number-one position seems to be certain, changes in the line-up are likely to take place. Already one of the left-of-centre parties, which started off with great hopes, seems to be hopelessly doomed. This is former foreign minister Ismail Cem’s New Turkey Party, which was formed by deputies who recently broke away en masse from prime minister Bulent Ecevit’s Democratic Left Party. Originally Dervis was also a part of this group but, in a surprise change of mind, condemned them as “right wing” and deserted them, depriving them of any chance they had of entering the Meclis.

Even AKP might lose ground, depending on whether its charismatic and popular leader Recep Tayyip Erdogan is allowed to enter the elections. Like most Islamists he is in trouble with the law for mixing politics and religion.

Erdogan, 48, has been dabbling in politics for more than 30 years and rose from the bottom. He went to religious school and joined an Islamist party when he was a secondary school student. In the 1970s he was elected chairman of the National Salvation Party (NSP) Youth Organization, which was closed down after the 1980 coup. Erdogan was elected mayor of Istanbul in 1994 but his tenure ended prematurely four-and-a-half years later when he was handed down a jail sentence for inciting the public against secularism by reciting a fiery poem at a rally.

After being released from jail Erdogan was greeted as a hero and made a bid to take over the leadership of the Islamic fundamentalist Felicity Party. He failed when the old guard told him to step aside and “wait respectfully for his turn”. Erdogan quit last year and together with a large group of breakaway Felicity deputies founded and was subsequently elected chairman of the Justice&Development Party. Days after its formation, polls started predicting that AKP would win a plurality of the vote and might be able to govern alone.

But it is not clear if this jail sentence will bar him from leading the party. It will not be a surprise if the generals, with whom the final decision rests, decide to obstruct him. Deutsche Bank’s survey indicates that 15% of those who said they would vote for AKP would change their decision if Erdogan were not allowed to run. This would lower AKP support to 16%.

The crisis, which led to early polls, was triggered by mass resignations from Ecevit’s DSP, which deprived the prime minister of the parliamentary strength he needed to remain the three-party coalition’s dominant partner.

But the coalition had begun to crumble long before this owing to Ecevit’s failing health. Ecevit is suffering from Parkinson’s disease. He is too weak to work for more than a few hours a day, his attention span is getting shorter and his short-term memory has been badly impaired.

At an EU reception meeting in Rome several months ago Ecevit was approached by a tall, boisterous man who shook his hand vigorously and expressed the hope he was enjoying the party. When the man left Ecevit turned to a well-known Turkish journalist standing next to him and asked: “Who the devil was that?” The journalist replied: “Silvio Berlusconi, sir, the Italian prime minister.”

Such stories, which could fill a book, were for long suppressed by the mainstream Turkish media to protect the prime minister from ridicule either out of fear of reprisals or in exchange for favours. Television footage was carefully cleared of anything that showed Ecevit’s forgetfulness and physical frailty. One such occasion was that last DSP party congress where Ecevit had to be led from his seat to the polling booth three or four metres away when it became obvious that he would not be able to make it on his own.

With the tacit consent of his coalition partners, most of Ecevit’s work was done by Husamettin Ozkan, the deputy prime minister, who enjoyed the prime minister’s full support. Ozkan, a former businessman who shuns the limelight, was like a son to the childless, reclusive Ecevits. But he fell out with Ecevit’s wife, Rahsan, who is notoriously jealous of anyone who gets too close to her husband. “She will not allow even a cat to get close to him,” says a seasoned journalist who has been following Ecevit’s career for more than 40 years.

Rahsan cut off Ozkan’s access to Ecevit, who was becoming increasingly housebound, putting pressure on Ecevit to sack him. Ecevit succumbed and publicly accused Ozkan of being a traitor. A few hours later Ozkan resigned and the party began to unravel.

Ecevit’s frailty had led to growing calls that he quit and allow someone younger to take over. These calls increased when it became publicly known that the prime minister was so frail that he had not had a bath for months and had been suffering from a broken rib that had not been reported to his doctors. But although he was clinically unfit to rule, Ecevit did not yield.

When Ecevit forced Ozkan to resign, the powerful media barons who were conducting their business through the deputy prime minister turned against Ecevit. They launched a ferocious and concerted campaign calling on him to step down for the sake of the country. DSP deputies who realized that the party stood no chance with Ecevit urged him to resign or at least appoint an heir. Ecevit disdainfully ignored these calls, sparking off a rebellion. The mutiny was led by foreign minister Ismail Cem, Ozkan and Dervis, who sided with them but initially did not resign his cabinet post.

Bleak prospects for dream trio

This group, dubbed the “dream trio”, tried again to get Ecevit to hand over the reins of the party but the prime minister, incensed, refused to step aside. Cem and his associates quit and formed the New Turkey Party (NTP). Contrary to their expectations two-thirds of the DSP deputies stayed put.

NTP enjoyed a burst of popularity because it was assumed that Dervis would officially join it.

“Contrary to some pundits’ belief that the New Turkey Party was just a theoretical construct dreamt up by the business community or international investors, the new party is already a very solid reality in voters’ minds,” rejoiced Deutsche Bank’s Annunziata. “It secured 7.5% support in our poll, taken shortly after its official launch, notwithstanding its limited organization and the fact that Dervis had not fully committed himself to the party.”

While 7.5% is short of the minimum 10% required to gain seats, it places New Turkey quite close to well-established parties such as Motherland and the True Path Party.

But Dervis did not join the party. He had quit his cabinet post together with the others but the president and Ecevit, who feared a market collapse, asked him to stay on. Instead of forcing Ecevit to resign, the rebellion forced the coalition partners to call an early election.

MHP leader Devlet Bahceli sided with Ecevit because he was afraid that a DSP minus Ecevit would dump him for another coalition partner. Bahceli proposed an early election. Increasingly out of touch and under attack, Ecevit went along. The assembly was recalled from recess and voted for a November 3 poll.

Ecevit asked Dervis, who had remained an independent and did not have an assembly seat, to join DSP or resign his cabinet seat. Dervis resigned and tried to put together a pre-election alliance between the left-of-centre and liberal parties including Mesut Yilmaz’s Motherland Party.

Alone none of these parties is assured of winning 10% of the vote, being, as Deutsche Bank put it, “borderline cases” which could be either above or below the threshold. Together, they might have a sporting chance of winning an absolute majority. Equally important, together they constitute the only alternative that would ensure the continuation of the IMF-supported economic programme and EU convergence.

Dervis quickly discovered that such alliances are not in the Turkish tradition. The hatred between such people as Ecevit and Baykal and Yilmaz and Tansu Ciller is almost pathological and none of these politicians has a record of putting the interests of the country above their own.

The fact that AK and MHP stand to win the elections does not mean that the number of extreme nationalists of Islamic fundamentalists has increased dramatically. Many of their backers would be people of moderate views who see these parties as less corrupt than the others and more likely to deliver economic prosperity.

“It may seem that the Turkish elector is voting for Islamic fundamentalists or the extreme nationalists but this is false,” says Can Paker, chairman of Turk Henkel. “The Turks ask: ‘Who will use power most for my benefit?’ before they vote and then vote. This is why there are always unexpected landslides: because the notion of who will deliver most changes all the time. They will vote for Erdogan because they think: ‘He is one of us, he will work for us, he won’t steal’.”

Holding to the IMF line

The markets reacted remarkably calmly both to the early election and Dervish’s resignation. “The prospect of early elections at least saves the economy and financial markets from the prospect of a slow death via speculation over the health of Ecevit and the coalition’s survival,” says Tim Ash, emerging-market strategist at Bear Stearns. Fitch Ratings welcomed the decision, saying: “The earlier fresh elections are held, the greater the potential for avoiding an economic and financial crisis.”

The new economy minister, Masum Turker, promised to stick with the IMF-endorsed economic programme and not to yield to pressure from the parties for populist spending. If he is true to his word the treasury should have no trouble holding the debt financing issue together until the end of the year, by which time a new government will be in power.

But the temptations may be intolerable. Turker will be in this high-powered job for only a few months and is unlikely to be re-elected. According to polls the chances of Ecevit’s Democratic Party passing the 10% threshold are small. Yilmaz’s Motherland Party is on the borderline. Therefore the temptation to yield to profligacy might be overwhelming.

However, to digress from the IMF path is not as easy as it used to be: the central bank is independent, the treasury no longer compliant and the state banks, whose funds politicians used to plunder, are out of bounds. Furthermore, all hell would break loose at the first sign of deviation from the economic programme. The withdrawal of IMF funding, an unlikely outcome at this stage, would be calamitous.

Restructuring the foreign debt is neither an option nor a likelihood. In any case, Eurobond obligations make up less than a quarter of the total outstanding debt stock and are mostly held by rich Turks who keep their money in overseas accounts. The same is true for the domestic debt. This being so, in the unlikely case of the situation deteriorating beyond anyone’s expectations, the government might achieve a voluntary restructuring as happened last summer.

If the election result undermines confidence, the financing outlook is likely to deteriorate. Because about 85% of the domestic debt is indexed to floating interest rates or the exchange rate, any weakening of the Turkish lira will push interest rates up and raise debt-servicing costs. In such a case, the government would quickly run into serious liquidity and rollover problems.

State of the parties

Turkish political parties are like feudal fiefdoms and party leaders more like life peers than elected politicians. A Turkish party leader is more secure than a politburo member would have been in the Soviet Union.

Once chosen, leaders are virtually impossible to bring down because the law governing parties offers them dictatorial powers. They handpick delegates to party conventions, in effect choosing people who will in turn choose them. They also select the candidates who will stand for parliament. This ensures that party ranks are filled mainly with servile flatterers and the ruling Meclis is subservient to the executive.

Masum Turker, who replaced Kemal Dervis as minister in charge of the economy, got the job for his loyalty rather than any demonstrable ability to run the economy. The former accountant was one of the most brazen supporters of prime minister Bulent Ecevit and his wife Rahsan, who value loyalty and submission above all else.

Any politician who dares to raise his voice is doomed. Erkan Mumcu, the former minister of tourism, was kicked out of the cabinet when he spoke out publicly against the way deputy prime minister Mesut Yilmaz was running the Motherland Party. He is the most recent of many politicians to discover that there is no alternative to total obedience.

Failure at the polls or indeed any kind of failure is not relevant to a party leader’s survival. Yilmaz was elected party chairman in 1991 when Turgut Ozal, the reformist prime minister, resigned to become president. The Motherland Party was the biggest party in the Meclis and had won the previous two elections. Since then Yilmaz has lost three elections and the Motherland has got smaller and smaller. Polls predict that it might disappear altogether for being unable to garner the minimum 10% vote needed to win seats (see main story). Nevertheless, Yilmaz has been re-elected almost unanimously at every party congress and his position as party chairman is unassailable.

The same is true for Tansu Ciller, Turkey’s first female prime minister, who is known to her supporters as Braveheart. Mrs Ciller was a professor of economics at an Istanbul university when Suleyman Demirel, the grand old man of Turkish politics, invited her to join the True Path Party. Demirel was under pressure to change the hidebound image of the party by conscripting young, urbane and attractive-looking people.

He has since conceded in private that choosing Ciller was one of his biggest mistakes.

Ciller rose without a trace, as the expression goes, but did not take the True Path Party with her. After a year in politics she was elected deputy and became minister in charge of the economy in 1991 when Demirel became prime minister. Two years later Demirel quit to become president and Ciller became chairwoman of the DYP and prime minister in 1993. She caused the catastrophic 1994 economic crisis, from which Turkey never recovered, lost two elections and was forced out of power by the military when she angered the generals by forming a coalition with Islamic fundamentalists.

The biggest loser of all is Deniz Baykal, under whose leadership the country’s oldest party, the Republican Peoples Party, disappeared in the 1999 general election. He was booed out of politics and quit. He sulked for a few years, made a new bid for the party’s chairmanship, won and is now back as if nothing had happened.

The irony is that if the polls are right the Republican Peoples may emerge as the third-biggest party after the Islamists and the ultra nationalists.

Parties are dominated by personalities rather than ideas. Although they parade under different names they are basically right of centre. Ecevit’s Democratic Left Party, for instance, is as nationalistic and right wing as the ultra right-wing Nationalist Action Party and would not be considered either democratic or left wing in any European parliament. Similarly, the so-called “left of centre” Republican Peoples Party is as anti-privatization and foreign investment as the Nationalist Action Party.

It’s my party and I’ll lose if I want to

Despite their ideological similarities, parties continue to splinter because the only way a young and ambitious aspirant can rise to the top is to break away and create his own fiefdom in the company of those who are loyal to him.

This gives the Turkish electorate more and more parties to choose from without increasing the choice.

Ciller’s True Path and Yilmaz’s Motherland are identical twins. The Republican Peoples Party gave birth to Ecevit’s Democratic Left, which splintered to create New Turkey, which has gathered around Ismail Cem, the former foreign minister. But these three parties are almost identical, like rebadged cars of a similar model – only the drivers are different.

Among the Islamic fundamentalists, the Justice and Development Party AK was created last year by a group that broke away from the Felicity Party. There was no ideological reason for the break. Those who broke away under former Istanbul Mayor Recep Tayyip Erdogan had had enough of Necmettin Erbakan, who has dominated the Islamic fundamentalist party for more than 30 years.

Erbakan, 75, is barred by a court verdict from leading an active political life but that has not prevented him from pulling strings behind the scenes.

The last time a party dumped its chairman against his will was 30 years ago when Bulent Ecevit, the prime minister, overthrew Ismet Inonu, one of the founding fathers of the Turkish republic. But that could only happen because in his 80s Inonu was stone deaf, housebound and no longer entirely compos mentis. Ironically, Ecevit is now in similar physical shape but is as reluctant as Inonu was to call it a day.

The 77-year-old politician, who entered parliament in 1957 and got his first cabinet seat in 1961, seems to be determined to leave politics feet first. His democratic Left party, DSP, which won the plurality of seats in the previous elections, seems to be as sick as its boss. Ecevit’s conduct of economic policy has dealt a severe blow to his reputation and that of his party. His popularity sank further when he refused to step down to allow a younger politician to take over. In a poll conducted on behalf of Deutsche Bank, 40% blamed the government for the economic crisis and 26% also blamed Ecevit. DSP’s support has dropped to 2%.

Ecevit will take DSP to the grave rather than appointing a successor or entering a centre-left alliance. In this he is no different to any other politician. This seems to be the Turkish way.