Erdogan faces biggest challenge in tight Turkey polls

Recep Tayyip Erdogan has won successive elections since his ruling party came to power in 2002, transforming Turkey with growth-orientated economic policies, religious conservatism and an assertive stance abroad. (Reuters)
Updated 19 June 2018

Erdogan faces biggest challenge in tight Turkey polls

ANKARA: President Recep Tayyip Erdogan on Sunday faces the biggest ballot box challenge of his 15-year grip on Turkey, seeking to overcome a revitalized opposition against the background of an increasingly troubled economy.
A self-styled heavyweight champion of campaigning, Erdogan has won successive elections since his Islamic-rooted ruling party came to power in 2002, transforming Turkey with growth-orientated economic policies, religious conservatism and an assertive stance abroad.
But he appears to have met some kind of match in his main presidential rival Muharrem Ince, a fiery orator from the left of the Republican People’s Party (CHP) who has been unafraid to challenge Erdogan on his own terms.
The intrigue is deepened by the holding of presidential and parliamentary elections on the same day under controversial constitutional changes spearheaded by Erdogan which will hand the new Turkish president enhanced powers and scrap the office of prime minister.
The vote takes place almost two years after the failed coup aimed at ousting Erdogan from power, a watershed in its modern history which prompted Turkey to launch the biggest purge of recent times under a state of emergency that remains in place.
Some 55,000 people have been arrested in a crackdown whose magnitude has sparked major tensions with Ankara’s Western allies.
Only a knockout first round victory for Erdogan and a strong parliamentary majority for his ruling Justice and Development Party (AKP) will be seen as an unequivocal victory for the Turkish leader.
And many analysts believe Ince can force a second round on July 8, while AKP risks losing its parliamentary majority in the face of an unprecedented alliance between four opposition parties.
“This is not the classical opposition that he has been facing for 15 years and which he more or less succeeded in managing and marginalizing,” said Elize Massicard of the French National Center for Scientific Research.
“It’s a new political dynamic that has grown in magnitude,” she said.
The opposition was already boosted by the relatively narrow victory of the “Yes” campaign in the April 2017 referendum on the constitutional changes.
Most opinion polls — to be treated with caution in Turkey — suggest Erdogan will fall short of 50 percent in the first round.
Erdogan remains by far Turkey’s most popular politician and inspires sometimes near-fanatical support in the Anatolian interior, where he is credited with transforming lives through greater economic prosperity.
“A great Turkey needs a strong leader,” says the slogan on election posters of Erdogan plastered across Turkey.
But the elections come at a time when Turkey is undergoing one of its rockiest recent economic patches despite high growth, with inflation surging to 12.15 percent and the lira losing 20 percent against the dollar this year.
Erdogan brought the elections forward from November 2019 in what many analysts saw as a bid to have them over with before the economy nosedived.
The opposition has sought to play on signs of Erdogan fatigue and also echoed Western concerns that freedom of expression has declined drastically under his rule.
For the first time, Erdogan has been forced to react in the election campaign as the opposition set the pace.
He had to deny quickly when Ince accused him of meeting the alleged architect of the 2016 failed coup, Fethullah Gulen. Erdogan promised to lift Turkey’s two-year state of emergency only after the CHP had vowed the same.
“The opposition is able to frame the debate in the election and this is a new thing for Turkish politics,” Asli Aydintasbas, fellow with the European Council on Foreign Relations (ECFR) said.
“A party that has been in power for so long is, in an economic downturn, going to experience a loss (in support) and lose its hegemony over politics,” she added.
While the CHP sees itself as the guardian of a secular and united Turkey, Ince has also sought to win the support of Turkey’s Kurdish minority who make up around a fifth of the electorate.
A rally held by Ince in the Kurdish stronghold of Diyarbakir in the southeast attracted considerable attention. “A president for everyone,” reads his election slogan, over a picture of the affably smiling former physics teacher.
The opposition, which argues that Erdogan has been given a wildly disproportionate amount of media airtime in the campaign, has sometimes resorted to creative and even humorous campaign methods.
The Iyi (Good) Party of Meral Aksener, once seen as a major player but lately eclipsed by Ince, put out humorous messages on Google ads and even devised a computer game where light bulbs — the AKP symbol — get destroyed.
Selahattin Demirtas, the candidate of the pro-Kurdish Peoples Democratic Party (HDP), has campaigned from his prison cell following his jailing in November 2016. He made an election speech on speaker phone through his wife’s mobile but was allowed give a brief election broadcast on state TV, albeit from prison.

More profitable year forecast for private investing in the Middle East

Updated 20 min 54 sec ago

More profitable year forecast for private investing in the Middle East

  • Saudi Arabia working on ‘very aggressive plan’ to privatize water-related assets and schools
  • Given its size, KSA will continue to have ‘attractive opportunities’ beyond the energy sector

DUBAI: On a day that Saudi Aramco shares opened at SR35.2 ($9.39) at the Riyadh’s Tadawul stock exchange, Ammar Al-Khudairy, chairman of Samba Financial Group, one of the banks managing the deal, made three main forecasts for the region’s economy.

“We will see capital markets doing better, which means private equity will start making some money again,” he said during a panel discussion on “the future of private investing” at the SALT conference in Abu Dhabi on Wednesday.

Al-Khudairy’s second forecast was some “bifurcation of private investing,” followed by private infrastructure. “Saudi Arabia has been talking about privatization, both greenfield and brownfield, for three years,” he said, adding that the government has piloted some projects and is working on a “very aggressive plan” to privatize 21 water-related assets and several thousand schools in 2020.

He said China is one of the top two or three relationships globally for Saudi Arabia, despite the few Chinese investments seen in the Kingdom.

While many experts say that private equity is enjoying a “golden era” in the West, the same cannot be said about the Middle East.

Recalling a time before the 2008 financial crisis, Al-Khudairy said there were 92 to 93 announced PE firms and PE funds then. “Today, we have six,” he said, attributing the figure to the unfavorable market in the region.

“If we look at Saudi Arabia, the biggest market in the region, it has been breaking even for the past five years,” he said, adding that the MENA region has had a total return of 4 percent during the same time.

As for the Aramco local initial public offering, Al-Khudairy said: “There was a last-minute call to make Aramco IPO a local IPO. So there was no proactive marketing outside the region.”

Aramco shares opened at 10 percent above their IPO price of SR32, reaching a record $26.5 billion on their first day.

Al-Khudairy noted that as a part of the final allocation, 23 percent went to non-Saudi entities and 37 percent went to institutional investors in Saudi Arabia.

“But a lot of it (international) is Gulf and also some American and European and Chinese money.”

Saudi Arabia was also the focus of remarks by David Rubenstein, co-founder and co-executive chairman of the Carlyle Group, in the same session on the final day of the Middle East’s first Salt conference.

The Carlyle Group is one of the world’s largest and most successful investment firms with $212 billion of assets.

Rubenstein said considering Saudi Arabia’s size, it will continue to have “attractive opportunities” beyond the oil and gas sector.

As an investor, he saw the Arab world as made up of four main areas, with the GCC emerging as the only one with attractive prospects. The Levant has experienced years of conflict and violence, while North Africa is known for the Arab Spring and, like Turkey, is blighted by uncertainties.

That does not mean the GCC region is not without its challenges. According to Rubenstein, the first is a lack of government-owned properties and private-owned estates for sale, which he attributed to the high number of family-owned business in the region that lack the incentive to sell.

“A lot of the money that has been invested here is money that is already in the MENA region,” Rubenstein said, adding that it could take some time before a large number of private equity firms are seen in the GCC.

Attracting Western capital is the second challenge, whether from the US, Western Europe or even Asia, which Rubenstein said is linked to public perceptions about the MENA region.