ANALYSIS
"Long-Term Bets in Turkish Politics" by Hasim Tekines, The Institute for Diplomacy and Economy
Turkish politics is now a long-term gamble between an old and bleeding dictator, who struggles to tame his nationalist ally, on the one side and a young and energetic opposition on the other.
The cutthroat political atmosphere astonishingly turned into a surprisingly peaceful environment in the immediate aftermath of the March 31 local elections. The first bilateral meeting between Erdogan and a CHP leader in years took place this month. This détente is, of course, not a return to democracy and the rule of law. Large-scale arrests continue against the Gulen Movement and Kurdish groups, and there is no improvement in issues related to freedom of speech. The CHP's requests remain limited to saving celebrity prisoners like Osman Kavala and retired generals.
The AKP’s alliance with the MHP has been pivotal in maintaining Erdogan’s grip on power, but it has also bred internal strife. The nationalist influence, particularly within the police, military, and judiciary, has become a double-edged sword for Erdogan.
Since Erdogan, his family and his inner circle are most likely expecting a period of revenge in the event of losing power, it is safe to assume that Erdogan will cling to his seat at all costs. In this respect, confronting Erdogan would be very costly and risky for the opposition. Instead, it is much easier and safer to wait for him to die or for his regime to unravel on its own.
Both Erdogan and the opposition have long-term bets. Erdogan needs more time to consolidate his control over the state and come up with a proper succession plan. The opposition, pinning its hopes on his advanced age and illness, aims to outlast President Erdogan. This gamble brings a temporary calm between Erdogan and the CHP while shifting the eye of the storm to the AKP-MHP relations.
"How Iran used Turkey's Akinci drone to find president's helicopter" by Ragip Soylu, Middle East Eye
A Turkish high-altitude, long-endurance drone played a central role in finding the wreckage of the helicopter that was carrying Iranian President Ebrahim Raisi and his delegation on Sunday night.
As the search ramped up and proved so tricky, Tehran asked Ankara for assistance.
Subsequently, the Turkish defence ministry announced it had allocated an Akinci high-altitude, long-endurance drone to aid in the search.
The defence ministry sources said the drone was able to operate when all other aircraft were grounded because of the bad weather.
At 2:22 am, the Akinci reported its first heat source, instantly sharing the image with Iranian officials. Rescue workers were only able to reach the wreckage at 5.46 am.
A source familiar with the Akinci operation told MEE that the crash site was close to the area the drone had repeatedly surveyed throughout the night. The coordinates suggested by the Akinci were in close proximity to the crash site, the source added.
On Monday, some noted on X that the Akinci's initial route into Iran through Tabriz appeared to include a flight path over sensitive Iranian military sites, such as the Amand rocket site, Khoi Airport, Tabriz Airport, and the Iranian army’s rapid response base.
"Producing artillery shells for Ukraine: Who bought the giant factory plot in capital Ankara?" by Bahadır Ozgur, Duvar English
How did the price of a plot worth 149.5 million liras drop to 54.9 million liras one day before its sale?
There is an interesting story behind this question. It starts from a real estate sale in the capital Ankara to a multi-million dollar military deal.
On April 25, 2024, a real estate broker in Ankara went to a tax office and filed a complaint. On the same day, he filed a criminal complaint with the prosecutor's office. The reason for the complaint was that a plot in Sincan, which had been advertised at 149.5 million liras for six months, was suddenly reduced to 54.9 million liras and changed hands a day later.
What comes next is more interesting. Because, on the buyer's side, the name of a company that no one knew until now and which will soon become one of Turkey's largest arms exporters is written: Arca Defense. It bought the plot to build a new facility for the production of artillery shells to be sent to Ukraine.
A merchant from Çorum founded the firm in Ankara in 2020. Its growth rate is incredible.
It seems that the demand for ammunition in the war in Ukraine has given rise to a new arms company in Turkey. Young entrepreneurs have achieved this success in just two years, as if touched by a magic wand.
It is necessary to question whether some people are being favored over the state's military companies, which are covered with an ideological veil by calling them domestic and national, and which command billions of liras of resources, technological know-how, and patents. Because this is the real “survival problem.” We should not forget the fate of the tenders for tank tracks and national tanks.
POLITICS
Erdogan and Bahceli Praise Kobani Trial Verdict
President Recep Tayyip Erdogan and his far-right ally, Devlet Bahceli, expressed satisfaction with the Kobani trial verdict, which sentenced several Kurdish politicians, including former Peoples’ Democratic Party (HDP) co-chairs Selahattin Demirtas and Figen Yuksekdag, to long prison terms.
On May 20, Erdogan commented on the court ruling, which sentenced Demirtas to 42 years and Yüksekdag to nearly 33 years in prison. "We see that justice has been served, albeit late, and we are satisfied for the victims and our democracy," Erdogan said.
Nationalist Movement Party (MHP) leader Bahceli echoed Erdogan's sentiments during a speech at his party's meeting on May 21. He called for the closure of the HDP and its successor, the pro-Kurdish Peoples' Equality and Democracy Party (DEM Party). "The Constitutional Court must not delay the closure case of the HDP. The HDP and its successors must be shut down," Bahceli stated.
Turkish Minister Criticized for Private Jet Use at International Transport Summit
Turkish Transportation and Infrastructure Minister Abdulkadir Uraloglu traveled to Leipzig on May 22 to attend the 2024 International Transport Forum (ITF) Summit focused on "Greening Transport: Keeping focus in times of crisis."
Uraloglu flew to Germany on a private jet owned by Ronesans Holding, a company headed by Turkish business tycoon Erman Ilıcak, who has close ties to President Erdogan’s Justice and Development Party (AKP), the local media reported.
Ali Mahir Basarir, deputy chairman of the main opposition Republican People’s Party (CHP), criticized Uraloglu in a video posted on X. He questioned why the minister didn’t take a regular flight, pointing out that the jet belonged to Ronesans Holding. Basarir called the situation disgraceful, especially in light of discussions about austerity measures unveiled by the government on May 13.
CHP Organizes Pensioners' Rally in Ankara, Calls for Economic Normalization
On May 26, the Republican People's Party (CHP) organized a Great Pensioners' Rally in Ankara's Tandoğan Square, attended by pensioners and laborers from all 81 provinces of Turkey, along with members of several non-governmental organizations. Representatives from pensioners' unions took the stage to discuss the challenges faced by pensioners.
CHP Chairman Ozgur Ozel, speaking at the rally, addressed political leaders, specifically President Recep Tayyip Erdogan and MHP leader Devlet Bahceli, stating, “Turkey cannot achieve normalization without addressing the economic concerns of pensioners.”
ECONOMY
Turkey and China Strengthen Cooperation on Energy and Mining Projects
Turkish energy minister held talks with Chinese authorities and companies this week on mining projects, nuclear energy, and renewable energy, according to a statement from the ministry on May 21. During his visit to Beijing, Energy Minister Alparslan Bayraktar met with China's Minister of National Resources, Wang Guanghua, and both sides agreed to enhance cooperation on mining, particularly in critical minerals and rare earths.
Bayraktar also met with Zhang Jianjua, head of China's National Energy Administration, to discuss nuclear and renewable energy. The two countries signed a preliminary agreement on energy conversion, the ministry said.
The minister also discussed renewable energy, green hydrogen, and mining investments with business groups and met with Chinese energy firms and financial institutions.
Turkish Finance Minister Predicts Inflation Drop to 30% by Year-End
Turkish Finance Minister Mehmet Şimşek said that the country's inflation, currently at around 70 percent, will decrease to 30 percent by the end of the year due to an effective economic program aimed at reducing inflation.
Speaking at an event in Ankara on May 22, Şimşek stated that inflation would start to drop rapidly in the summer months due to measures the government has taken, reaching 30 percent by year's end. The government also aims to lower inflation to 10 percent by 2025 and to single digits by 2026, the minister added.
Turkey's Central Bank Holds Key Interest Rate Amid Inflation Concerns
Turkey's central bank decided on May 23 to maintain its key interest rate at 50 percent for the second consecutive month.
The bank's monetary policy committee stated that it is closely monitoring inflation risks.
Additionally, the central bank emphasized that it would tighten monetary policy in case a significant and persistent deterioration in inflation is foreseen. It also pledged to uphold tight monetary policy until a substantial and enduring decrease in inflation is realized.
First Abu Dhabi Bank in Talks to Acquire Koc Group's Stake in Yapi Kredi for $8 Billion
The United Arab Emirates’ First Abu Dhabi Bank (FAB) is in advanced talks to buy Koç Group’s 61.2 percent stake in Istanbul-based lender Yapı Kredi for about $8 billion, three sources close to the matter told Reuters.
Following the news, Yapı Kredi shares surged 10 percent, and Koç Holding shares jumped more than 9 percent.
One source mentioned that Koç Group sought about $8.5 billion for its shares in Yapı Kredi, while FAB offered around $7.5 billion.
In a statement to the Istanbul stock exchange, Koç Holding acknowledged the Reuters report and confirmed preliminary talks on selling Yapı Kredi shares, stating it is open to evaluating other possible alternatives in its portfolio.
Turkey to End 25% Rent Increase Cap After July 2024
On May 20, Turkey’s Treasury and Finance Minister Mehmet Simsek announced that the regulation limiting rent increases to a maximum of 25 percent will not be extended after July 2024.
Indicating that the regulation was made for a short time, Simsek stated that there is no need for the regulation to continue, as he believes that market prices should not be intervened.
“Turkish Reserve Buildup Is Remedy for Lira With Bad Side Effects" by Beril Akman, Bloomberg
Turkey’s central bank, once criticized for selling reserves to prop up the lira, is now trying to do the opposite to prevent the currency from gaining too much.
But a remedy for what Finance Minister Mehmet Simsek has called excessive appreciation is flooding the financial system with hundreds of billions of liras in liquidity that the central bank now has to mop up. Its foreign-exchange purchases totaled $43 billion in the past four weeks when adjusted for valuation effects, according to Goldman Sachs Group Inc.
The outlook has created a massive arbitrage opportunity for investors who borrow where rates are low to invest where they are high. Turkey’s inflows related to carry trade are up by about $16 billion since the March local elections, Bloomberg Economics estimates.
According to Goldman, foreign inflows will continue as long as elevated inflation expectations delay rate cuts. That’s putting the lira under “significant appreciation pressure, even though the currency is not cheap in real terms,” the economists said.
Capital seeping into Turkey is allowing the central bank to build back its depleted stockpile of hard currency. But it hasn’t been fully withdrawing the liras being pumped into the economy, forcing policymakers to introduce sterilization measures after keeping rates on hold on Thursday.
HUMAN RIGHTS
Turkish Police Detain 44 Allegedly Linked to Gulen Movement
Turkish police detained 44 people nationwide for their alleged ties to the Gulen movement, a faith-based group.
According to local media, operations were conducted in 28 provinces on May 21 based on warrants issued by Ankara prosecutors targeting 46 public sector employees.
Turkish Police Arrest 27 More May Day Protesters in Third Wave of Detentions
On May 23, Turkish police detained 27 more people in Istanbul for resisting law enforcement during a banned May Day demonstration in Taksim Square, marking the third wave of detentions targeting the protesters. All 27 detainees were reportedly arrested.
Earlier, over 200 demonstrators attempting to reach Taksim Square were detained, with 48 of them subsequently arrested.
Saturday Mothers Mark 1,000th Vigil Amidst New Zealand MPs' Calls for Justice
The Saturday Mothers, a group of activists and relatives searching for loved ones who disappeared in police custody in the 1980s and 1990s, held their 1,000th vigil on May 25 in Galatasaray Square on İstanbul’s İstiklal Street.
Thousands of supporters, including politicians and civil society organizations, joined the milestone event. The vigil happened after police ended a 300-week ban on their gatherings.
Ahead of the 1,000th vigil, 39 New Zealand MPs wrote a joint letter to President Tayyip Erdogan, Minister of Justice Yılmaz Tunç, and Minister of Interior Ali Yerlikaya.
In the joint letter, the MPs stated that they have been following the struggle of the Saturday Mothers, reiterated their demands for truth and justice, and demanded that Turkey abide by the conventions on Enforced Disappearances.
The MPs also called on Turkey to implement the Constitutional Court rulings and not to prevent the Saturday Mothers' vigil.
FOREIGN POLICY
Turkey Declares Day of Mourning for Iranian President's Death in Helicopter Crash
On May 20, Turkish President Recep Tayyip Erdogan announced that his country would observe a day of mourning following the death of Iranian President Ebrahim Raisi in a helicopter crash.
"We decided during our cabinet meeting to declare a day of mourning to share the deep pain of the Iranian people," Erdogan said in a televised speech.
Turkey Urges Immediate Compliance of ICJ Order
On May 24, the United Nations' top court ordered Israel to halt its military offensive in Rafah and open the Rafah crossing for humanitarian aid. Turkey welcomed the International Court of Justice's (ICJ) order, urging Israel to comply immediately and calling on the UN Security Council to enforce the ruling.
"No country in the world is above the law. We expect Israel to comply immediately with all ICJ rulings. In this regard, we call on the UN Security Council to do its part." said the Turkish Foreign Ministry in a statement.
Turkey in Talks with EU to Ease Schengen Visa Process for Citizens
On May 24, Turkey’s Foreign Minister Hakan Fidan announced that they have begun talks with the European Union (EU) to facilitate the Schengen visa process for Turkish citizens. This statement came during a joint press conference with EU Commissioner for Neighborhood and Enlargement Oliver Varhelyi in Ankara.
Fidan said they had thoroughly reviewed Turkey-EU relations and reaffirmed Turkey’s commitment to EU goals. Both sides discussed Turkey's candidate status and agreed that updating the Customs Union is necessary. Fidan also emphasized that priority would be given to businesspeople and students regarding visa facilitation.
Yellen: US Considers Tougher Sanctions on Banks Operating in Russia
U.S. Treasury Secretary Janet Yellen told Reuters that European banks operating in Russia are facing increasing risks, and the U.S. is considering enhancing its secondary sanctions on banks found aiding transactions for Russia's war efforts.
Yellen also highlighted concerns about Russia's ability to procure goods to enhance its military production, citing transactions through China, the United Arab Emirates, and Turkey.
.svg.png){kind=small}
