Monday, March 3, 2014

Turkey passes law to shut schools run by Erdogan arch-rival







Ankara (AFP) - Turkey's parliament has passed a bill to close down thousands of private schools, many of which are run by an influential Muslim cleric locked in a bitter feud with Prime Minister Recep Tayyip Erdogan.

The move will strike a blow to Erdogan's ally-turned-rival Fethullah Gulen, for whom the schools are a major source of income, as he stands accused of seeking to topple the government with a damaging corruption scandal.

The bill, which was approved late on Friday, sets September 1, 2015, as the deadline to close down the network of schools.

"Withdraw your kids from their schools," Erdogan told a boisterous crowd of his party's supporters at an election rally in Turkey's southwest city of Denizli on Saturday.

"State schools are enough for you," he said. 

There are around 4,000 private schools in Turkey, including an unknown number of preparatory schools run by the movement of now US-based Gulen.

Tensions have long simmered between Erdogan and Gulen, who once worked hand-in-hand as Turkey's conservative pro-business middle class rose at the expense of the military and former secular elite.

But the friction reached breaking point in November when Erdogan's Islamic-rooted government first floated the idea of shutting down the schools, which aim to help students prepare for high school and university.
Erdogan said at the time he wanted to abolish an unfair education system.

"Those who benefit from these courses are the kids of rich families in big cities," said the premier, who himself hails from humble roots and has tried to cultivate an image as a man of the people during his time in office.
Eyup Kilci, deputy principal of the Gulen-affiliated Guvender school network in Ankara, condemned the new legislation, telling AFP it gives Turkey the unenviable distinction of being "the only country which bans education activities".
Erdogan's feud with Gulen escalated in mid-December, when dozens of the premier's political and business allies were detained in police raids on allegations of bribery in construction projects, gold smuggling and illicit dealings with Iran.

Erdogan accused so-called Gulenists implanted in Turkey's police and judiciary of instigating the corruption probe in a bid to undermine his government ahead of local elections on March 30 and presidential elections in August.

He retaliated by sacking hundreds of police and prosecutors believed to be linked to Gulen.
The scandal, which brought down four ministers and prompted a cabinet reshuffle, has evolved into the most serious challenge yet to Erdogan since his Justice and Development Party (AKP) came to power in 2002.
This week, the graft controversy widened to directly implicate Erdogan himself, after recordings were leaked online in which the premier can allegedly be heard discussing hiding large sums of cash and conspiring to extort a bribe from a business associate.

The incriminating tapes have prompted the opposition to call for Erdogan's resignation, while angry residents have staged protests against government corruption.

In a fresh rally on Saturday, some 600 protesters took to the streets in Ankara, shouting "They are thieves" and "Government, resign!". 

Some demonstrators were seen handing out fake euros in a mocking reference to the leaked audio tapes, which the government insists were fabricated and have not been independently verified.

At another election rally in the northwestern city of Kirklareli, Erdogan accused Gulen loyalists of "espionage" that threatened national security and warned that they would pay a "heavy price".
"They wiretapped Turkey's very confidential and very strategic conversations, and disclosed them to other (enemies)," he said. "Can there be such treachery and lowness?"

Observers say Gulen's Hizmet (Service) movement risks losing millions of dollars in revenue once its Turkish educational institutions are closed down under the new legislation.

In other attempts to contain the political crisis, Erdogan's government has recently also pushed through legislation tightening state control over the Internet and the judiciary, raising questions at home and abroad about the state of democracy in Turkey.

Gulen, who has been living in the United States since 1999 to escape charges of plotting against the secular state by the then-government, has denied any involvement in the corruption probe.

The Hizmet movement also runs an estimated number of 500 private schools around the world.

Moazzam Begg: the real reason my passport was confiscated






Moazzam Begg reveals why the British government has been continually harassing him since his return from Guantanamo, and took his passport for the second time in eight years.

In the summer of 2012 I wrote about the first of my two visits to Syria to investigate leads into cases of British and American complicity in the rendition of terrorism suspects to the regime of Bashar al-Assad.
This followed on from something I learned first-hand from CIA and US military intelligence agents who threatened to send me to Egypt or Syria if I failed to co-operate with them during my time in the Bagram prison. I made British MI5/MI6 agents, who were present at every leg of my unlawful imprisonment, fully aware of these threats. Their response was that I had to co-operate with their US counterparts.

On my eventual return to the UK from Guantanamo, along with three other British citizens I received a letter from the Home Office informing me that my ability to apply for a passport had been restricted by the Home Secretary under the powers of the ‘Royal Prerogative’.

Having returned from three years of separation from my loved ones, spent mostly in solitary confinement and after suffering the effects of regular human rights violations, I didn’t challenge the decision immediately. Instead, I tried to rebuild my lost connection to a traumatised family, including a son I’d never seen.

UK torture complicity
As part of my work for CagePrisoners, however, I soon began campaigning for prisoners detained at Guantanamo and others held in secret detention sites or who had disappeared after being rendered to countries like Libya, Egypt, and Syria. We conducted numerous investigations into recurrent reports of extreme torture carried out by the Syrian regime and discovered the complicity of the governments of the US, Canada, France, Sweden, Germany, Denmark and Britain.

I was also constantly being invited to speak all over the world about issues pertaining to Guantanamo, torture, the rule of law and the war terror. Thus, in 2009 I mounted a successful challenge to get my passport back.

My subsequent extensive travel abroad was greeted simultaneously by meetings with people in power—including unexpected praise from US ambassadors in Luxembourg—to armed police escorting me off planes in order to deny me entry to Canada (where I’d gone to meet with Canadian rendition victims sent to Syria).
Returning to the UK airports was often an ordeal in its own right as I would be stopped almost every time and questioned under Schedule 7 of the Terrorism Act 2000. This happened even on visits to Brussels where I was invited to speak at the European Parliament by British MEPs as well as trips to Malaysia where I had been giving evidence in war crimes tribunals set up by the former prime minister there. Often British police would ask me if I had gone to these places to further my claims about British complicity in torture.

During this period three very important things happened which I believe the British intelligence services have been unable to recover from:

1. A major civil action was taken by 16 former Guantanamo prisoners against the British government and intelligence services for complicity in torture and false imprisonment.

2. Prime Minister David Cameron ordered a judge-led inquiry to be launched into allegations that the UK was complicit in torture

3. The Metropolitan police began a criminal investigation against British intelligence services into recurrent allegations of complicity in kidnap, torture and false imprisonment

In 2010 we won an out-of-court settlement against the government after it was compelled to hand over documents that showed how British government ministers had decided we should be consigned to Guantanamo, despite evidence of mistreatment.

At the end of the discussions with the government the then Justice Minister, Kenneth Clarke QC, sat with us and listened. Several of the world’s supposedly most dangerous terrorists sat in a room with a senior Tory minister discussing the previous government’s wrongs. I handed Clarke a copy of my book hoping there might be some proper understanding after this but, all the while the government was preparing the Justice and Security Bill[11]—which was passed as law earlier this year—that would ensure damaging and embarrassing civil actions such as ours would henceforth be heard in secret under colour of ‘national security concerns.’
The inquiry into torture by Sir Peter Gibson was shelved last week in favour of the Intelligence and Security Committee but in his interim report Gibson concluded that MI5 had at best ‘turned a blind eye’[12] to our abuse.

The criminal investigation is still on-going but I have sat for hours with the Metropolitan Police giving testimony to them about what happened in Bagram and Guantanamo and, they have gone to meet with rendition victims in Libya[13] and continue to investigate the claims of Shaker Aamer[14] who has been in Guantanamo without charge for twelve years.

Last year several former Guantanamo prisoners, including me, met with Asa Hutchinson, who had served as US Undersecretary for Homeland Security while we were captives. In a report by the Constitution Project’s Task Force on Detainee Treatment, which included him and two former senior US generals, the practice of torture by the US administration was described as “indisputable”. The report[15] also stated bluntly that our treatment and indefinite detention was “abhorrent and intolerable”. There was also no escaping the fact that the British government had colluded in sending and keeping us there.

Visiting Syria
Following the uprisings of the ‘Arab spring’ I was able to make several visits to the Arab world and follow up cases of rendition, including the shocking case of a man whose tortured false testimony[16] was used as a justification by both the US and UK to invade Iraq.

In July last year, I visited Syria where I met numerous former prisoners who had been held by the Assad regime as well as a few victims of US and UK rendition. One of the men, a Libyan who had resided in Syria, had been rendered to Libya after a phone call by a British Libyan dissident had been intercepted by MI5 and its contents disclosed to Assad’s Mukhābarāt (intelligence agency). Documents[17] found in the headquarters of Gaddafi’s Mukhābarāt after the fall of Tripoli clearly prove British involvement.
A few months later, in October 2012, I was called by an MI5 officer who said they wanted to talk to me about my views on the situation in Syria after having read my article[18]. I told them that they must be aware that I was investigating several leads regarding British and American complicity in rendition and torture in Syria. They called back after consulting with their lawyers and said they understood that and would still like to meet. I agreed to speak to them and meet at a hotel in East London. Both MI5 and I had our lawyers present.

MI5 was concerned about the possibility of Britons in Syria being radicalised and returning to pose a potential threat to national security. I told them that Britain had nothing to worry about, especially since British foreign policy, at the time, seemed in favour of the rebels. At the end of the meeting I was assured by MI5 that my proposed return to Syria to continue my work would not be hindered, and it wasn’t.

 Subsequently, I travelled to Syria without incident. I spent much time accumulating testimony and information for a report on the situation of the current prisoners as well as the accounts of those who had been detained and tortured in the past. I witnessed the squalid refugee camps, I visited the wounded, young and old, some of whom I buried, I saw the carnage of Assad’s killing machine and I saw the beautiful young faces of children aged beyond their years. I witnessed the harsh winter and saw farmers chop down their olive trees to warm themselves and I heard the horror stories of torture under the rule of both Bashar and Hafiz al-Assad. However, I also saw aid coming in from all over the Muslim world which included British ambulances, British fire engines, British garbage disposal trucks; British aid centres and hospitals with British doctors (one of whom was killed[19] saving lives a few months ago) and volunteers from Britain’s Muslim community. And yes, there were some British fighters too. I do not believe any of them posed any kind of threat to the UK.

I returned home without hindrance, except for the customary Schedule 7 stop. I was briefly questioned about my visit by border police and returned home shortly after. I came back ‘radicalised’ enough to speak at numerous events for various charities working out in Syria. I also conducted interviews[20] with people on the ground that are close to the fighters to answer questions about any tangible threat to the UK to help allay the fears of the British public and intelligence services.

Schedule 7 stops
Since then I have been ‘randomly’ stopped[21] more times than I can recall under Schedule 7 while travelling.

The last time this happened, last month, I was en route to a conference[22] in Turkey about the mass-imprisonments and torture occurring in Egypt following the military coup. British police suggested that I might be going to Syria, despite showing them details of itinerary and return flights for the following weekend.
I was made to miss my flight but the police were prepared to rebook me for the next available one meaning that they were neither preventing me from going to Turkey, or even potentially to Syria. I refused their offer as I would have had missed the conference by then and opted to returned home. However, they took possession of my iPad and phone and kept them for a week. Both items contained sensitive information and documents pertaining to CagePrisoners’ investigations on both complicity in torture and responses to the British government’s measures in tackling extremism.

In anticipation of future harassment at airports I began legal proceedings to challenge the constant harassment at airports under Schedule 7 and informed the Home Office, the border police and British airports about my intended travel via my lawyers. We received a response from their lawyers, which acknowledged the letter but did little else.

Change of language

The language and attitude of the British government has steadily changed towards the Syrian opposition especially since much of it has openly chosen an Islamic path, something the west has been unwilling to engage with and unprepared to accept. Britain went to war based on the falsehood that Iraq may have possessed weapons of mass destruction. Clear evidence of the use of chemical weapons, in addition to over 120,000 dead through the use of conventional ones in Syria has not elicited any such response, and most people are grateful for it. No one wants to see British involvement in Syria, especially the Syrians who know well what happened next door in Iraq.

As a result, however, the Assad regime is now regarded as the better of the two choices. That is why last month the decision to stop[23] even non-lethal aid for western-backed factions in Syria was taken by Britain. But, despite there being no evidence of a tangible threat from British fighters returning from Syria (the contrary[24] in fact) and certainly not the type that might have been posed from the same in Iraq or Afghanistan because of the presence of British troops, the government now wants to remove not just the passport but the nationality[25] of Britons suspected of being involved in fighting in Syria. The government’s myopic insistence on this point cannot fathom that this is simply about Syria, not Britian. The counterterrorism industry, it seems, has too many vested interests for the language to be tempered with reason.

Instead of easing the arduous journeys for the numerous convoys leaving with aid from Britain for Syria every month, border authorities detain the aid workers for hours on end—both on exit from and re-entry to the UK. On several occasions volunteers have been turned back, vehicles confiscated and money and goods collected by the community for the beleaguered Syrian people seized.

Britain has refused[26] to take any Syrian refugees despite the unprecedented crisis facing millions fleeing the war. It also did next to nothing for the British Muslim Dr. Abbas Khan[27] and has been heavily criticised for shirking its duty regarding one of its own citizens while he was horrifically tortured and murdered.

Simply speaking, the British government has lost all touch with the reality on the ground and the enormous sentiments in the Muslim community, and beyond, regarding the Syrian conflict.

Losing my passport – again

After a trip to South Africa[28] last month—which had coincided with the funeral of Nelson Mandela—where I spoke extensively about the complicity of the British government in rendition and torture, I was met upon arrival at Heathrow by officials who served me with a notice to seize my passport under the ‘Royal Prerogative’ stating that it was assessed my previous visits to Syria had constituted involvement in terrorism. No explanation other than that was given.

I am certain that the only reason I am being continually harassed—something that began long before any visit to Syria—is because CagePrisoners and I are at the forefront of investigations and assertions based on hard evidence that British governments, past and present, have been wilfully complicit in torture.

How logical is it to stop me from travelling anywhere in the world simply because they want to prevent me from going to Syria? Numerous British citizens have been prevented from entering Turkey (the key entry point to Syria) at the behest of the British authorities. They could have done the same with me.

It is these government-shaking issues that are the real reason why I have been continually harassed and targeted by the authorities in this country. I am not and never have been in anyway a threat to them, unless words seeking accountability are a threat.

At a time when Islam and the Muslim community is facing an unprecedented attack via politicians, the media and ultimately some sections of the public susceptible to this onslaught, it has been the aim of CagePrisoners and myself in trying to empower the community that is being purposefully undermined.
The struggle for reason and justice is clearly a longer one than I once imagined but since our aim is a good and just one, I do not believe our detractors will succeed.

Link:  :http://muslimvillage.com/2014/02/28/50644/moazzam-begg-real-reason-passport-confiscated/.

Saturday, March 1, 2014

Israel police, protesters clash at Jerusalem's Al-Aqsa mosque




Jerusalem (AFP) - Israeli police clashed with stone-throwing Palestinians Tuesday in the Al-Aqsa mosque compound of Jerusalem's Old City, ahead of a parliamentary debate on Jewish access to the site, holy to both faiths.

Israel captured the Old City from Jordan during the 1967 Six Day War. But the compound, the holiest place in Judaism and the third holiest in Islam, has been administered by Jordan since the two countries signed a peace treaty in 1994.
 
Tuesday evening, the Knesset (parliament) held the first part of a debate called by right wingers demanding that Israel end its practise of forbidding Jewish prayer at the compound.
In Jordan, meanwhile, opposition Islamists urged the government to freeze the treaty with the Jewish state, fiercely objecting to any change in the status of Jerusalem's Muslim sites.
Israeli security forces entered the Al-Aqsa compound just after 7:30 am (0530 GMT), and fired stun grenades and rubber bullets to disperse Palestinian protesters, police spokesman Micky Rosenfeld told AFP.
He said there was "high tension" ahead of the parliamentary debate.
Stones thrown by the Palestinians injured two policemen, and three protesters were arrested, he said.

Palestinian medics said 15 protesters were wounded by rubber bullets.

Azzam al-Khatib, director of the Islamic Waqf (religious endowments) body that oversees the site, said he had called for a closure of access to the compound to avoid clashes.

"Since yesterday we've been demanding the closure of the Maghabira gate, because of the provocations and statements against Muslims by various right-wing parties," he told AFP.

The compound is a flashpoint because of its significance to both Muslims and Jews.

Sitting above the Western Wall plaza, it houses the Dome of the Rock and the Al-Aqsa mosque.
It was previously the site of the first and second Jewish temples and is known to Jews as Temple Mount.
 
In a motion for the Knesset agenda, which was not put to a vote, MP Moshe Feiglin, a hardline member of Prime Minister Benjamin Netanyahu's Likud party, said Israel's fear of igniting Muslim rage amounted to discrimination against Jews.

"Behind the people's backs we have given up on every shred of sovereignty over the Temple Mount," he said.

"Any terror organisation can raise its flag there (but) there can be no trace of the Israeli flag. Reading from the psalms is forbidden and police even advise (Jews) to remove skullcaps from their heads."

"Only Jews are forbidden to pray at this place," he told the almost-empty parliament.

- 'Match in a powder keg'-

Zehava Gal-On, from the leftwing opposition Meretz party, accused Feiglin and his supporters of seeking to torpedo US-sponsored Israeli-Palestinian peace talks.

"Those who today are calling for (Jews) to go up to the Temple Mount at this sensitive point are throwing a match into a powder keg," she said.

"You and your friends are trying to endanger Israel... to shackle the peace process and not leave the question of sovereignty over the Temple Mount to be decided in negotiations."

After capturing east Jerusalem, which includes the Old City, Israel later annexed it in a move never recognised by the international community. But under the 1994 peace treaty, Jordan retained authority over all Muslim sites in the city.

Jordan's opposition latched onto the Israeli debate as justification for severing ties with the Jewish state.
"We urge the government to meet the demands of people who have repeatedly called for freezing and eventually cancelling the peace treaty," the Islamic Action Front said on its website.

Jordanian officials were not immediately available for comment.
Earlier this month a panel of Jordanian MPs warned that "Jerusalem and Al-Aqsa represent a red line."

Putin puts troops in western Russia on alert in drill





MOSCOW (Reuters) - President Vladimir Putin ordered an urgent drill to test the combat readiness of his armed forces across western Russia on Wednesday, flexing Moscow's military muscle amid tension with the West over Ukraine.

Russia said the exercises were not linked to events in Ukraine, where the ouster of a president who turned his back on the European Union and sought closer ties with Moscow has raised worries in the West over possibility of military intervention.

Putin has ordered several such surprise drills in different Russian regions since he returned to the presidency in 2012, saying the military must be kept on its toes, but the crisis in the neighboring nation gave them added geopolitical resonance.

"In accordance with an order from the president of the Russian Federation, forces of the Western Military District were put on alert at 1400 (0500 ET) today," the Interfax news agency quoted Defence Minister Sergei Shoigu as saying.

Shoigu said the training drills were not linked to events in Ukraine, and Deputy Defence Minister Anatoly Antonov said they had been previously planned. He said they would involve about 150,000 military personnel.

The western district encompasses most of western Russia and borders Ukraine, which lies between NATO nations and Russia.

Forces must "be ready to bomb unfamiliar testing grounds" as part of the drill, Shoigu told a Defence Ministry meeting.

Putin has made no public comment on Ukraine since President Viktor Yanukovich was driven from power over the weekend. His ouster came after months of political turmoil that began when he spurned deals with the European Union and sought to improve ties with Russia.

The United States and European nations have warned Russia against military intervention in Ukraine, a former Soviet republic that Putin has called a "brother nation" and wants to be part of a Eurasian Union he is building in the region.

Russian officials have said Moscow will not interfere in Ukraine, while accusing the West of doing so. Interfax cited the speaker of the upper parliament house, Valentina Matviyenko, as saying on Wednesday it would not use force.

But Prime Minister Dmitry Medvedev said on Monday that Russia's interests and its citizens in Ukraine were under threat, language reminiscent of statements justifying Russia's invasion of Georgia in 2008, when he was president.

Shoigu said the drill would be conducted in two stages, ending on March 3, and also involved the command centers of Russia's Air and Space Defence forces, paratroops and long-range aviation as well as some troops in central Russia.

In the two-day first stage, military units would be brought to "the highest degree of combat readiness" and would be deployed to testing areas on land and sea, Interfax quoted Shoigu as saying.

The second stage would include tactical exercises and involve warships from the Northern and Baltic Fleets, he said, and some warplanes would move to combat airfields.

Descriptions of the exercises did not mention the Black Sea Fleet, which is based in Sevastopol in Crimea. Tension over Ukraine's turmoil is high because of the fleet's presence and the region's large ethnic Russian population.

In separate comments, Shoigu said Russia was "carefully watching what is happening in Crimea" and was taking unspecified measures to ensure the security of the facilities and arsenals of the Black Sea Fleet, state-run RIA reported.

Shoigu said the drill would also test the counter-terrorism measures in place at military units. Russian officials have referred to some of the Ukrainian opposition forces whose protests pushed Yanukovich from power as "terrorists".

(Writing by Steve Gutterman and Thomas Grove, editing by Larry King)

Obama makes it official: U.S. planning for full Afghan withdrawal





After giving him the silent treatment for eight months, President Barack Obama on Tuesday called Afghan President Hamid Karzai. The message? A blunt warning that all U.S. troops will leave his war-torn country by 2015 unless Karzai or his successor sign a bilateral security agreement (BSA) with the United States.

The president had not spoken to Karzai since a June 25, 2013, video conference, and the two had had no contact since a Nov. 21, 2013, letter from Washington to Kabul.

Obama has said repeatedly that he hopes to leave a residual force of some 8,000-12,000 U.S. and NATO troops in Afghanistan to train local security forces and target extremists after most combat forces depart in 2014. But U.S. officials had warned that Obama would pull all American troops absent a BSA that gives American and allied forces immunity from local prosecution.

Karzai refused, saying his successor should be the one to make that commitment. He continued to say no even after Afghanistan’s “loya jirga” assembly of elders approved the agreement.

On Tuesday, Obama bluntly delivered that warning to Karzai himself, according to a White House statement on the call.

Obama told Karzai that he has “asked the Pentagon to ensure that it has adequate plans in place to accomplish an orderly withdrawal by the end of the year should the United States not keep any troops in Afghanistan after 2014.”

“Going after the remnants of core Al Qaeda could be in the interests of the United States and Afghanistan,” the White House readout continued. “Therefore, we will leave open the possibility of concluding a BSA with Afghanistan later this year.”

But “the longer we go without a BSA, the more challenging it will be to plan and execute any U.S. mission” and “the more likely it will be that any post-2014 U.S. mission will be smaller in scale and ambition,” the White House statement said.

Defense Secretary Chuck Hagel hammered home the message in a statement of his own released after the Obama/Karzai call, calling plans for a total pullout “a prudent step.”

"At President Obama's direction, and with my strong support, the Department of Defense will move ahead with additional contingency planning to ensure adequate plans are in place to accomplish an orderly withdrawal by the end of the year should the United States not keep any troops in Afghanistan after 2014,” Hagel announced.

Hagel also underlined why Obama’s Afghan policy is at a crossroads: Defense ministers from NATO and other countries with a presence in Afghanistan are due to meet in Brussels this week to discuss the future of the alliance’s policy. The White House and its allies face increasing pressure to make decisions about the withdrawal, a complex undertaking requiring significant military resources that can’t all be mobilized instantly.
White House aides have increasingly sounded as frustrated with Karzai as their predecessors in George W. Bush’s administration were. At one point, a senior Bush foreign policy aide joked to reporters that Karzai’s first name should permanently be changed from Hamid to something unprintable here.

Faced with his refusal to sign despite an all-out pressure campaign, the United States is now looking ahead to April elections that will pick Karzai’s successor.

While some prominent Republicans have sharply criticized Obama's handling of Afghanistan, the war-weary U.S. public has largely turned against the conflict, now America's longest war.

While it’s likely too late to repair the Obama/Karzai relationship, it’s not like things were going swimmingly under Bush, either.

At a December 2008 press conference with Bush, the Afghan leader drew nervous laughter when he offered up this description of the relationship between Washington and Kabul:

"Afghanistan will not allow the international community [to] leave it before we are fully on our feet, before we are strong enough to defend our country, before we are powerful enough to have a good economy, and before we have taken from President Bush and the next administration billions and billions of more dollars — no way that they can let you go."

Foreign companies in Turkey face squeeze





LONDON/VIENNA (Reuters) - Foreign companies in Turkey are beginning to feel the effects of a sagging currency, rising inflation and a growing political power struggle, adding to fears the country may not be the source of future growth that some companies had hoped.

As Western companies unveiled their 2013 results in recent weeks, most of those with operations in Turkey said they were committed to continuing to invest in the country. However, many acknowledged bumps in their performance there.

Like other developing economies, Turkey has been battered in recent months by U.S. Federal Reserve plans to reduce its monetary stimulus. This had allowed financial investors to borrow cheaply in the United States and invest in high yielding securities in faster growing, lesser developed economies.

But Turkey has been hit particularly badly by a power struggle between Prime Minister Tayyip Erdogan and an Islamic cleric he accuses of concocting a corruption scandal in an attempt to undermine him.

The corruption scandal along with rising inflation and sustained falls in the lira have prompted rating agencies to cut their outlook for Turkey and warn there could be a hard economic landing.

Companies are watching the fallout closely.

U.S. carmaker Ford and German auto parts maker ElringKlinger, which have plants in the country, said the drop in the lira was eating into earnings. Foreign owned factories rely heavily on foreign-made components and the weak lira is pushing up the price of these.

British mobile phone group Vodafone said revenue growth at its Turkish unit dropped almost 80 percent in the last quarter of 2013, compared to the same period of 2012, due to a mix of tougher regulation and price pressure.

Austrian oil group OMV, which is among the most reliant on Turkey for earnings of all the foreign investors there said the economic volatility was challenging the very profitability of its Petrol Ofisi filling station and lubricants unit.

Joe Kaeser, Chief Executive of German engineering group, Siemens, told investors in late January that his perception of Turkey had shifted from being a market that was "peachy" for businesses that sell infrastructure, energy and healthcare equipment, to one where he now grouped the country among riskier plays like Ukraine.

"If you had asked me a year ago or two years ago about Turkey, I would have told you this is the place to be," he said on an investor call.

"In the meantime we do see that those geopolitical impacts have been spreading uncertainty also into the economic development," he added.

BUOYANT MESSAGES

Turkey has enjoyed strong economic growth since Erdogan came to power in 2002.

This and trade agreements with the European Union helped make the country a magnet for European manufacturers which wanted to access cheap labor, or consumer goods groups which wanted to participate in an increasingly valuable market.

While the current instability is prompting some companies to tighten risk management - BASF said it was reducing working capital so that less cash was tied up in Turkey - none of the more than a dozen companies contacted by Reuters said they had plans to scale back investment.

"We monitor the situation daily but in the medium term we remain positive and ready to invest," UniCredit's CEO Federico Ghizzoni said earlier this month. He added the bank planned to hire 2,000 people and open 60 branches in Turkey this year.

Kasper Rorsted, CEO of detergent maker Henkel, which is building a factory in Turkey, said while the weaker lira did force his company to cut prices, such fluctuations were common in emerging markets and that his eye remained on the long term.

"The high inflation you right now have in Turkey with a big devaluation of the Turkish lira … you have to deal with it," said in a television interview with Reuters Insider.

European companies' commitment to Turkey is partly thanks stagnant markets at home, analysts say.
But the view that Turkey is experiencing a temporary blip and that growth and demand will recover to the vigorous levels seen in the 2000s is too optimistic, said Fadi Hakura, Head of Turkey Project at think tank Chatham House.

"Turkey has entered the middle income trap. Without fundamental reform, such as upgrading its institutions for governance and its human capital (through better education), Turkey will likely see growth of only 2 to 4 percent over the long term," he said, adding the country enjoyed around 5.2 percent growth since 2002.
Hakura said such fundamental reform currently looked unlikely and consequently, the authorities were likely to continue to rely on existing measures such as higher interest rates and lending restrictions to tackle the country's balance of payments problems.

Such measures are bad news for companies seeking to tap the Turkish consumer.

"Consumer based businesses will not likely enjoy the same revenues and profits in the future that they have experienced over the last decade," Hakura said.

(Additional reporting by Victoria Bryan, Maria Sheahan and Frank Siebelt in Frankfurt, Nicholas Tattersall and Alsi Kandemir in Istanbul, James Davey and Paul Sandle in London, Silvia Aloisi, Danilo Masoni and Isla Binnie, Milan, Robert-Jan Bartunek in Brussels, Tom Kaeckenhoff in Duesseldorf)

Erdogan Gains Upper Hand as Purge Defangs Islamist Rivals

Feb 25, 2014



Prime Minister Recep Tayyip Erdogan is gaining the upper hand in Turkey’s political feud by purging a police force and judiciary that helped him become the country’s most powerful leader in decades, analysts and police experts say.

Prosecutors driving the corruption probe that shook the government when it was made public in December have been shunted off the case, and thousands of police officers reassigned. Erdogan accuses them of taking orders from his former ally, U.S.-based cleric Fethullah Gulen, whose influence he has vowed to root out.
By dislodging the army as the dominant force, the alliance between Erdogan and Gulen reshaped Turkey. Now, the scale of the premier’s mobilization against the preacher threatens to do the same.

In addition to the firings, Erdogan has strengthened its grip on courts and slapped controls on the Internet, where investigation details and tapes of alleged wrongdoing have surfaced. A recording of what sounds like Erdogan and his son Bilal discussing ways to conceal funds was posted on YouTube yesterday. The tape is an “unethical” fake, Erdogan said today, vowing legal action. It amounts to an attempted coup, he said.
The European Union and Turkish business groups are among those warning of the risks.

‘Unanticipated Erosion’

“Erdogan is aiming to pack the state with loyalists,” said Anthony Skinner, head of analysis at Maplecroft, a research company based in Bath, England. While he’s ahead in the fight against Gulen, the “ongoing drive to flush out dissent will continue to have serious repercussions for the rule of law.”

The EU has urged Erdogan to ease curbs on free speech and let judges operate independently, to revive Turkey’s membership bid. Standard & Poor’s cited “an unanticipated erosion of institutional checks and balances and governance standards,” in cutting its outlook on Turkey’s credit rating on Feb. 7 to negative from stable.

Turkey’s currency, bonds and stocks were among the world’s worst performers in the month after the corruption allegations surfaced with the detention of businessmen, officials and the sons of three cabinet members on Dec. 17.

Erdogan responded by removing ministers who were implicated in the probe, and launching a counter-offensive. A second wave of arrests was foiled when officers loyal to the government refused to carry out orders from the prosecutors, who were subsequently taken off the case.

Coup Response

“We will expose the parallel organization,” Erdogan told lawmakers in parliament today. “This coup attempt will not go unanswered,” he said of the latest leak.

The police have been subjected to the biggest overhaul. The government is seeking to diminish Gulen’s influence in key units, including intelligence, organized crime and anti-terrorism, according to a former senior official in those units. He spoke on condition of anonymity due to the sensitivity of the information.

Interior Minister Efkan Ala told Kanal 7 television on Feb. 21 that 5,000 policemen have been reassigned, saying only 1,000 were related to the graft probe. He said two senior police officials involved in bugging Erdogan’s office had fled to an unspecified country, and Turkey would seek their extradition.

Interior Ministry officials declined to respond to questions about the dismissals and the extent of Gulen’s influence within the police, saying they can’t discuss administrative decisions.

‘Upper Hand’

“This country’s police, prosecutors and judges are receiving orders from somewhere else,” Erdogan said Feb. 15. “Wherever they are hiding in, we will find, expose and hold this parallel structure accountable in front of the nation.”

The head of the country’s biggest business group warned last month that the power struggle will undermine the economy. The government’s efforts to strengthen its grip on key institutions of the state are “disturbing,” Muharrem Yilmaz said. “It’s not possible to attract foreign investment to a country where the rule of law is ignored” and “the judicial mechanism is not working in line with EU norms.”

Erdogan responded by accusing Yilmaz of betraying his country.

An independent adviser to the police, who also asked not to be identified, said thousands more officers in the 260,000-strong police force are likely to be reassigned by the end of the summer. He tapped his mobile phone to show a list of alleged Gulenist officers, and said he had shared that information with pro-government police inspectors.

The police purge has “inhibited the ability of Gulenists to engage in corruption probes and arrests,” Skinner said. “Erdogan has the upper hand at the moment.”

Exam Questions

Erdogan has expanded the battle to the Internet. On Feb. 11 he accused parts of the police and judiciary of undermining his government with illegal wiretapping records leaked on the Internet. Vowing to end online “bullying,” he has pushed through legislation that allows authorities to block content deemed to be violating personal privacy without a court order.

Gulen’s followers increased their sway in the police after Erdogan’s party came to power in 2002. Students in Gulen-linked schools would be given advance knowledge of the questions in police college exams, according to the senior police official. Some cadets were sent to universities in the U.S. to help them advance, while others kept a low profile until they were appointed to key posts, he said.

The affiliations of officers are widely known, especially in small units, and secular and nationalist officers previously pushed aside by Gulenists are now making a comeback, he said.

Fist Fight

Erdogan also replaced some members of the Supreme Board of Judges and Prosecutors, which makes judicial appointments. Lawmakers on Feb. 14 voted to hand control of the board to Justice Minister Bekir Bozdag, ignoring objections by the opposition Republican People’s Party, which escalated into a fist fight on the floor of the chamber.

A month earlier, when the purge was in its early stages, the EU expressed reservations. “These developments could weaken investigations in progress and the capacity of the legal system and the police to conduct independent investigations,” European Commission spokesman Olivier Bailly said on Jan. 8, calling on Turkey to respect EU entry criteria including the rule of law.

‘Seriously Collapsed’

The comments reflect the shift in EU concerns about Turkey since it was officially accepted as a membership candidate in 1999. High on the EU’s to-do list at that time was reducing the political influence of the army and placing it under civilian control. Erdogan, with an assist from Gulen, has achieved that - - only to face questions from Brussels about whether his government now dominates too many areas of Turkish life.

“The police and judiciary mechanisms have seriously collapsed,” said Gokhan Bacik, a political scientist at Ipek University in Ankara. Erdogan’s crackdown brings into question “not only the legitimacy of such dismissals but also the supremacy of the rule of law in the country.”

Erdogan said on Jan. 29 that he also plans to prevent prosecutors from issuing arrest orders without approval of government-appointed governors.

“The government has moved to put the police and judiciary under its control” to block the graft probe, said Hasan Oren, a lawmaker from the Republican People’s Party.

Erdogan, who faces three elections in the next two years, has accused the Gulen movement of seeking to weaken his Justice and Development Party before those votes. The first test of that will be during local elections on March 30.

“If the people make us the number one party, it means this government is honest,” Erdogan said on Feb. 4.

Link:  
 http://www.bloomberg.com/news/2014-02-24/erdogan-gains-upper-hand-as-police-purge-defangs-islamist-rival.html?cmpid=yhoo.