ANALYSIS
Report: "Weaponizing Financial Systems Erdoğan's Transnational Repression to Muzzle Dissidents Abroad" by Mayra Russo, Sara Kezia Heinonen, and Dr. Yasir Gökçe, The Institute for Diplomacy and Economy
The Erdoğan administration has employed a range of repressive tactics to silence dissent. These measures include abductions, enforced disappearances, and extraditions, often through controversial and extrajudicial means, as well as utilization of international and bilateral mechanisms to distress them and tarnish their reputation.
Anti-money laundering and terrorism financing regulation is one of the mechanisms exploited by the Erdoğan government. Part of these checks are performed under Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols, which include watchlist screenings. By feeding false, manipulated, and politically biased information about critics into these lists, the Erdoğan government prompts financial institutions to label these individuals as "risky."
By manipulating open-source platforms, asset-freeze orders, INTERPOL systems, and directly influencing banks, the Erdoğan government has weaponized financial services and international cooperation to suppress opposition and dissent. The experiences of victims underscore the systemic discrimination and marginalization perpetuated by governmental directives and risk-averse financial institutions.
The repression against Erdoğan's dissidents is significantly amplified by the integration of AI systems. When AI systems are fed biased or false data, particularly from authoritarian regimes like Erdoğan's, they can perpetuate and exacerbate these biases. Dissidents can be unfairly labeled as high-risk customers based on manipulated data, leading to unjust account closures and financial exclusion.
Financial data providers, whose information banks rely on for risk assessments, often disseminate inaccurate or politically motivated data. This not only results in financial discrimination but also furthers the victimization of individuals targeted by regimes for their political beliefs. Despite regulatory frameworks like the GDPR and the upcoming AI Act, significant gaps in compliance and accountability persist.
As these manipulative practices of the Erdoğan administration and likeminded governments continue, there is an urgent need for robust safeguards and increased scrutiny within financial institutions to protect the integrity of personal data usage and uphold the rights of individuals against authoritarian misuse.
"Turkey’s New Origin Myths" by Hasim Tekines, The Institute for Diplomacy and Economy
The 953-year-old Battle of Malazgirt (Manzikert) between the Byzantine Empire and the Seljuk Turks was the most important agenda item in Turkey this week. This year's ceremonies were more spectacular, with Erdoğan's coalition partners, leaders of various religious groups and, of course, generals in attendance. In Malazgirt, Erdogan found a new myth of origins for the Turkish state that better suits his worldview, political message, and foreign policy perspective.
Erdoğan offers alternatives for national days. Just as the 2016 coup attempt is commemorated every year on July 15, the Battle of Malazgirt is one of these alternatives. The Malazgirt Victory marked the beginning of a long period of Turkish conquests in Anatolia and the Balkans. Malazgirt says a lot about the AKP's worldview, identity construction, understanding of the national role, mission and foreign policy vision.
In contrast to political Islamism, nationalism is an ascendant ideology in Turkey, both within the government or the opposition. The Malazgirt celebrations exemplify Erdoğan's use of Turkish nationalism in his myth-building efforts. This latest incident was a show of strength, demonstrating Erdogan's unity with his coalition partners, but beneath this show of unity lies a growing tension between Islamism and nationalism.
"The West Should Look Past Erdogan and Deal With Turkey" by Marc Champion, Bloomberg
President Recep Tayyip Erdogan and his government have been gradually dialing down tensions with the US and Europe in some areas, even as they raise them in others, for about two years now. This week, unconfirmed Turkish media reports suggest another olive branch might be on the way: the offer to settle a long-running dispute with the US by crating up the S-400 air defense battery it bought from Russia seven years ago, and allowing US inspectors to ensure it stays that way.
Just as rampant inflation has forced Erdogan’s return to international financial markets, so the war in Ukraine has served as a reminder that Turkey has no viable security alternative to NATO; not Russia and not China.
“We’re entering a new era,” as the veteran Turkish foreign policy analyst Soli Ozel puts it. “The US, no matter who comes to power after November will be less invested in Europe, so the EU and Turkey will have to work together more on both hard and soft security issues.”
There are things that all sides can do to improve the relationship. In Europe’s case it could ease tightened visa restrictions that are making travel difficult even for businesspeople visiting EU countries for work; Turkey is an EU customs union member. It should also encourage rather than block arms transfers like the Eurofighter that imply long-term commitments that could help tie Turkey’s security interests to those of the EU. The US, meanwhile, could take another stab at getting that S-400 issue resolved.
POLITICS
New Constitution Debate to Start in October 2025
Turkish Parliament Speaker Numan Kurtulmus announced that discussions on a new constitution are expected to begin in parliament by October 2025. Speaking during a live broadcast, Kurtulmus said that over the next year, the government will work with political parties and social groups to shape the proposals for the new constitution.
Opposition Claims Shipments to Israel Continue Through Greece and Romania
Good Party Group Deputy Chairman Turhan Comez claimed that shipments to Israel are still ongoing. Comez stated, "Either the route is changed while on the way, or shipments are made through Greece and Romania."
Comez added that they received information indicating that ships departing from Turkey are stopping at ports in Greece and Romania before heading to Israel.
Opposition Leader Criticizes Government for Exclusion from Victory Day Ceremony
Ozgur Ozel, leader of Turkey’s main opposition party, criticized the government on August 30 for excluding him from speaking at an official Victory Day ceremony in Kutahya, a national holiday celebrating a key battle in Turkey’s War of Independence. The ceremony, attended by senior government officials, marked the 102nd anniversary of the Battle of Dumlupinar.
Ozel, head of the Republican People’s Party (CHP), said that local officials in Kutahya refused to let him speak at the event.
He accused the government of attempting to stir up tension by sidelining his party. “This is not just an insult to the CHP but to the position of the main opposition itself,” he said.
Erdogan Calls for Unity and Announces New Aircraft Carrier on Victory Day
President Tayyip Erdogan, speaking at an event on the 102nd anniversary of August 30 Victory Day, addressed recent "provocations" and said, "We are all in the same boat as 85 million. We are passengers of the same boat."
Erdogan stressed the importance of unity, saying, "All we need to do is keep our internal front strong." He added, "There are economic challenges in the lives of nations, and political tensions may rise from time to time. It's unrealistic to expect 85 million people to agree on everything. However, neither temporary economic difficulties nor regional tensions can cause us lasting harm."
Erdogan also shared positive news about Turkey's defense industry: "We are working tirelessly to lead our country to a brighter future. Following the Anadolu ship, we are preparing for a larger aircraft carrier to add to our military as soon as possible.
ECONOMY
IMF Calls for Tighter Policies in Turkey to Tackle High Inflation
The International Monetary Fund (IMF) urged Turkey on August 28 to adopt stricter fiscal and monetary policies to address its high inflation, which poses significant economic risks.
The recommendation came after an IMF mission led by James P. Walsh reviewed Turkey's economic policies. The IMF praised Turkey's recent tighter policies for reducing crisis risks, boosting market confidence, and lowering the current account deficit to 2.7% of GDP in early 2024. However, it warned that inflation remains high and could reach 43% by the end of 2024 without further tightening.
The IMF projects that Turkey’s GDP growth will slow to 3.4% in 2024, with inflation gradually declining to 24% by 2025. It stressed the need for a more aggressive fiscal consolidation and recommended various reforms, including reducing tax expenditures, broadening the tax base, and reforming energy subsidies. The IMF also called for a continued tight monetary policy and further financial sector reforms.
Turkey's Foreign Trade Data Shows Improvement in July
The Turkish Statistical Institute (TurkStat) and the Ministry of Trade released foreign trade data for July on August 28.
Exports rose by 13.8% compared to the same month last year, reaching $22.51 billion, while imports fell by 7.8% to $29.81 billion. The foreign trade deficit decreased by 41.8% compared to July of the previous year, falling to $7.3 billion. The export-import coverage ratio increased from 61.2% in July 2023 to 75.5% last month.
For the January-July period, exports grew by 4.1% compared to the same period last year, reaching $148.74 billion. Imports decreased by 8.3%, totalling $198.68 billion. The foreign trade deficit for this period dropped by 32.4%, from $73.86 billion to $49.94 billion. The export-import coverage ratio rose from 65.9% in January-July 2023 to 74.9% this year.
Turkey to Lower Economic Growth Forecasts and Revise Inflation Projections
Turkey plans to revise its growth forecasts for this year and next, Bloomberg reported. The exact figures will be announced in the government's new Medium-Term Program. But the revisions are expected to show a lower growth rate than the current predictions of 4% for this year and 4.5% for 2025, according to the source familiar with the plans.
Additionally, year-end inflation for 2024 is projected to be revised up by about 10 percentage points from the current 33%, while the 2025 inflation forecast will be adjusted from 15.2% to a range of 15%-20%, Bloomberg claimed.
Turkey’s Poverty Line Hits 64,157 Lira
Turkey's poverty line, the total amount a family of four needs to live without deprivation of food and other expenses like rent and utilities, increased to 64,157 Turkish lira ($1,884), the Public Service Employees Union (Birlesik KAMU-IS) announced on August 28. With a minimum wage of 17,002 lira ($499), only 26.5 percent of the poverty line is covered.
The hunger line, which represents the minimum amount needed for basic food expenses, increased by 7,257 lira ($213) from last year, reaching 20,958 lira ($615) in August, according to the union.
Bank Interest Income and Credit Card Debts Surge in July
According to the Banking Regulation and Supervision Agency (BDDK), banks' interest income reached 2 trillion 31 billion 982 million TL. Interest income from personal loans and credit card debts surged by 193.9 percent compared to the previous year, totalling 717.6 million TL.
Credit card debts rose by 80.3 percent to 1 trillion 545 billion 480 million TL.
The rate of non-performing loans also increased. The non-performing loan rate, which was 1.60 percent last year, rose to 1.68 percent in July. Interest income from non-performing loans jumped by 147.5 percent to 22 billion 630 million TL.
HUMAN RIGHTS
Finnish Report Reveals Abuse of Gulen Supporters in Turkey
The Finnish Immigration Service released a report following its fact-finding mission to Ankara and Istanbul from October 2–6, 2023. The report examines the situation of alleged members and supporters of the Gulen movement in Turkey, focusing on how individuals targeted in current security operations against the movement are treated by Turkish authorities and society.
According to the report, among other abuses, 12 women were raped and became pregnant while in custody, and some had to give birth. Other women were also forced to other actions, such as, to perform oral sex with police officers.
IHD Report: Over 5,000 People in Turkey Tortured or Mistreated in 2023
In 2023, a total of 5,312 people in Turkey were subjected to torture or ill-treatment, according to the Human Rights Association's (IHD) annual report. The report revealed that 348 individuals were tortured or mistreated in police custody, while 733 faced such treatment outside detention facilities.
Additionally, 594 inmates reported cases of torture or mistreatment within correctional facilities. The report also highlighted that 3,487 people were beaten or injured during public demonstrations due to interventions by security forces.
Turkish Police Detain 20 Over Alleged Gulen Movement Links
Turkish police detained 20 people across 11 provinces for alleged links to the Gulen movement, Interior Minister Ali Yerlikaya announced on X on August 28. The raids took place in Adana, Ankara, Antalya, Corum, Elazig, Istanbul, Izmir, Ordu, Samsun, Maras, and Van.
Turkish Court Blocks X Accounts of 82 Journalists and Politicians
A Turkish court banned access to the X accounts of 82 individuals, including well-known journalists and politicians like Kurdish politician Ertugrul Kurkcu and journalist Amberin Zaman, over accusations of spreading terrorist propaganda, the Free Web Turkey platform reported.
The court stated that the decision was made to protect national security and public order following a complaint by the Gumushane Provincial Gendarmerie Command.
The account of German politician Cansu Ozdemir, a member of the Hamburg parliament from the Left Party, is also among those blocked.
The Committee to Protect Journalists (CPJ) called on X administrators to resist complying with the court order. "Blocking access to multiple X accounts, including those of journalists and media, will negatively impact press freedom in Turkey, where the media already faces persistent government restrictions", said Gulnoza Said, CPJ’s Europe and Central Asia program coordinator in New York.
FOREIGN POLICY
Iraqi Military Shoots Down Turkish Drone Near Kirkuk
The Iraqi military shot down a Turkish armed drone near Kirkuk on August 29, according to Iraqi officials.
Major General Saleh Haraz, Kirkuk operations commander, said at a press conference that the Iraqi army successfully hit an unidentified object. Later, officials confirmed it was a Turkish drone.
A security source told Iraqi media that the drone was targeted because it flew at medium altitude over five main cities in the province and approached sensitive sites, including security bases. Orders from Baghdad were issued to shoot it down, the source added.
Foreign Ministry Spokesperson Oncu Keceli stated that Turkey is coordinating with Iraqi authorities to clarify all details of the incident. Keceli also emphasized that Turkey continues its anti-terror operations in Iraq based on the principle of self-defence.
Turkey and EU Discuss Relations at Brussels Meeting
Foreign Minister Hakan Fidan attended the EU Informal Foreign Ministers' Meeting in Brussels on August 29, where Turkey-EU relations and regional issues were discussed for over two hours. Fidan also held bilateral talks on the sidelines of the meeting. After the meeting, Fidan emphasized that the informal meeting was crucial for reviving Turkey's relations with the European Union.
Fidan mentioned they had the chance to discuss two main topics with the EU: advancing Turkey-EU relations institutionally and enhancing cooperation on global and regional issues.
He also highlighted that updating the customs union and the visa issue remain priorities. "We continue to work on visa liberalization. We have completed 66 criteria, with only 6 remaining. We are collaborating with relevant institutions to complete these," Fidan said. "We are also working to ease the difficulties our citizens face during the Schengen visa application process until full visa liberalization is achieved."
Saudi Crown Prince and Turkish President Discuss Israeli-Gaza Conflict, Call for Unified Action
Saudi Crown Prince Mohammed bin Salman and Turkish President Erdogan discussed the ongoing conflict in Gaza during a phone call on September 1. According to the Saudi Press Agency, the Crown Prince emphasized the importance of unifying Arab and Islamic efforts to support the Palestinian people against what he described as brutal aggression by Israeli forces. Prince Mohammed also called for increased efforts to stop the Israeli attacks.
Erdogan expressed similar views, urging the international community to put more pressure on Israel to stop its actions in Gaza and the Palestinian territories. He also highlighted the need for joint action by Islamic countries to halt the attacks and human rights abuses and called for a lasting ceasefire in the Gaza Strip, according to a statement from the Turkish Presidency’s Directorate of Communications.
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