BALANCING ACT

Turkey 2013 | DIPLOMACY | REVIEW: DIPLOMACY & POLITICS

The government is hoping to continue Turkey's path to economic growth, while building bridges to solve some of the long-term issues in the body politic.

Turkey has experienced significant growth over the past decade under the aegis of single-party rule by the Justice and Development Party (AK Party). Over time, Turkey has managed to overhaul many of its political and legal institutions, while establishing itself as a growing regional power with an international voice that warrants attention. The 2014-2015 period will see three key tests of electoral support for the AK party, including municipal, presidential, and parliamentary elections. The AK Party has been in power since 2002, and its members will need to work hard to win back the broad electoral support they drummed up in previous polls to ensure that Turkey doesn't return to the fractious coalition governments of the 1990s.

STRUCTURE

The legislative base of government takes its form in the 550-seat Turkish Grand National Assembly (Türkiye Büyük Millet Meclisi). Members are elected via a proportional representation system across Turkey's 81 provinces for four-year terms, with parties requiring a minimum of 10% of the national vote to gain representation via the electoral process. While the AK Party won more than 50% of the vote and 326 seats in June 2011, it fell 41 seats short of securing a two-thirds majority in the Turkish parliament. Had the necessary 367 of 550 seats been achieved, the AK Party could have gone forward to re-write the Turkish constitution without recourse to a referendum or opposition party support. Lacking the absolute power to change Turkey's constitution unhindered, the AK Party engaged in intense negotiations over 2012 and 2013 with the main opposition parties: the Republican People's Party (CHP), the Nationalist Movement Party (MHP), and the Peace and Democracy Party (BDP). The current constitution has been in place since 1982, though has been amended on numerous occasions over its 31-year span.

Under the current constitution, the President is elected once every five years to head the government and the state. The President is not necessarily an elected member of parliament. The incumbent, President Abdullah Gül, has been in his position since 2007. However, since the law on presidential elections was put into effect on January 20, 2012, the next presidential elections will be held in 2014 instead of 2012, thus rendering President Gül the last indirectly elected president of Turkey. The president appoints the prime minister, who is then approved by a vote of confidence in the parliament. The current Prime Minister is Recep Tayyip Erdoğan. The president, the prime minister, and the council of ministers make up the executive branch.

The freedom and independence of the judicial system is protected by the constitution and there is no organization, person, or institution that can interfere with the running of the courts. The executive and legislative branches must obey the decisions of the court. Turkish courts are highly structured and do not use the jury system. Judges render decisions after establishing the facts in each case based on the evidence presented by the prosecutors and the defense. The Supreme Board of Judges and Prosecutors is the principle body in charge of ensuring judicial integrity. The Minister of Justice, Sadullah Ergin, is the head of the Council. Even though Turkey is not an official member of the EU, it does accept the European Court of Human Rights as a higher court and accepts its decisions. There are several supreme courts each with a specific subject, such as criminal and civil justice, administrative, constitutional, parliamentary by-laws, and accounts.

FOREIGN PARTNERS

At the moment, Turkey has 16 free trade agreements (FTAs) in force; namely the Customs Union with the EU, and agreements with Montenegro, Chile, Jordan, South Korea, Bosnia-Herzegovina, Albania, Palestine, Israel, Morocco, Tunisia, Egypt, Georgia, Serbia, Macedonia, and Mauritius. Turkey is also in negotiations with a further 14 countries or blocs, with MERCOSUR of South America being one of the most significant in terms of size. Turkey has also launched initiatives to start negotiations for 12 more FTAs, with the most notable being with the US, Canada, Japan, Mexico, and India. In May 2013, Moody's upgraded Turkey to investment grade after Fitch moved it up to that status in November 2012. Standard & Poor's still has the country at BB+, one grade lower. There was a debate as to the significance of the rating system again in June 2013, as only a month after Moody's upgraded, Turkey's stock market, Borsa Istanbul, took a 20% slide on the news that the US Federal Reserve was heading for a policy change regarding quantitative easing, while the effects of the local Gezi Park protest movement also took their toll.

Turkey is still looking to join the EU and recently had its accession talks postponed to October 2013, after pressure from various EU foreign ministers over the government's handling of the Gezi Park protests. Turkey began its latest bid to join the 27-nation bloc in 2005 at the same time as Croatia, which joined the EU July 1, 2013. With EU talks progressing slowly, Turkey has recently been looking toward the MENA region to increase trade and relations. Trade between the EU and Turkey has grown to a little under $34 billion in 2013 and also accounts for one-fifth of all Turkey's exports and $12 billion, or 7.5%, of all FDI in Turkey.

Turkey's foreign relations in the immediate region have been tested of late, especially in the wake of the ongoing civil war in Syria, the need to balance its relationship with Iran, Russia, and the US, and the loss of face following the ousting of President Morsi of Egypt, seen as a key ally. Although the “zero problems with the neighbors" approach is facing testing times, the main undercurrent of ensuring long-term stability in an oft-complicated region remains unchallenged at the foreign policy level.

DEMOCRATIC TEST

In May and June of 2013, the AK Party government faced an outbreak of widespread popular protest, in part fuelled by its lack of consultation over landmark construction projects and concerns over its social policy agenda. What started out as a small environmental protest by some 50 people in May 2013 soon took on a more multidimensional character, as those opposing the government's policies used the opportunity to vent their disquiet over many of its policies. The heavy-handed response by the police, and the often confrontational attitude of Prime Minister Erdoğan, helped fuel the protest movement, despite attempts by many senior members of the AK Party, including President Gül, to create opportunities for dialogue with the protestors to resolve their grievances. The protests took on a more violent nature on June 11, 2013 when the police cleared Gezi Park and the Taksim Square area of protestors. Despite sporadic protests held in the months following, and the death of at least five protestors nationwide, the movement has largely died down.

The protests brought to the fore both a generational and cultural divide between supporters of the opposition and the AK Party's core conservative voting base. In generational terms, the significant role played by student groups and youth organizations may indicate an increasing shift more to the left in politics for the under-35 age group in urban areas, which has the potential to change the electoral balance in the long term. In the aftermath of the protests, polling conducted by Konsensus Research and Consultancy Company in July 2013 indicated that 61.4% of voters did not approve of the government's actions, with 36.7% citing Prime Minister Erdoğan's rhetoric as the main reason for the protests turning violent, while another 22.1% cited the strong force used by the police. While this may indicate that the government is losing some traction in the general electorate, polling conducted by Sonar Research Company in the same month indicated a mere six-percentage-point drop in support for the AK Party, to 44.1%. While the main opposition parties, the center-left CHP (28.2%), nationalist MHP (16.3%), and pro-Kurdish BDP (6.4%) firmed their support, the result of any national election would likely see the return of the AK Party to power. The main question would be if voting trends in individual provinces make it impossible for the AK Party to maintain single-party rule, or be forced into a coalition with another party. Another end result of the protest movement has been a slight shift by center-right voters away from the AK Party, though where those votes would end up should a national poll be conducted is difficult to predict. While the AK Party maintains significant support among the populace, it is now up to the main opposition parties to improve their performance in order to better challenge the government at the polls and improve Turkey's democratic record.

The first test for the AK Party will come in municipal polls to be conducted in March 2014. The governing party originally sought to target key CHP strongholds such as Antalya and Izmir, as well as increase its control over more metropolitan municipalities, following the creation of 13 new administrative areas in 2012. However, the Gezi movement appears to have stalled AK Party inroads into opposition-held strongholds, and revealed weaknesses in its levels of support within its own main urban support base, Istanbul.

Another casualty of the protest movement has been constitutional reform. Although the government is still pushing to hold a popular referendum on changing the constitution, the inability to find consensus for change with the main opposition parties, except in very partial terms, may see the process put on hold until after the 2015 national polls. As well, the attempt to create a more executive-style presidential system also looks to be abandoned for now. Long seen as a way for Prime Minister Erdoğan to move into the presidential office occupied by long-time ally Gül, the build up to the first direct presidential election in August 2014 will be of interest to investors to see how the governing party will seek to shore up its support.