Erdoğan and the ‘losers’ lobby’ in Turkey

On Dec. 17, 2013, when a group of Istanbul prosecutors started Turkey’s biggest ever graft probe, the value of the Turkish Lira against the U.S. dollar was 2.04. This was already in excess of the Turkish Central Bank’s year-end estimation of 1.92.

As of yesterday, Jan. 28, the value of the lira against one U.S. dollar was around 2.30. That is more than a 12 percent loss in value, and if one takes the Central Bank’s failed target as a reference, the loss goes down to almost 20 percent.

The expectation in the market was for an increase in interest rates, even just a symbolic one. On Jan. 28, the headline of pro-government newspaper Yeni Şafak readi ”Stand strong, don’t increase it,” with a big picture of Central Bank Governor Erdem Başcı. But during a press conference on the same day, Başcı first “corrected” the 2014 inflation estimate to 6.6 percent (a deviation of nearly 25 percent from the original 5.3), and later on he admitted that they might have to use the “interest rate weapon” against devaluation and inflation. 

The problem is that Prime Minister Tayyip Erdoğan thinks increasing the rates is a kind of “defeat” against those who don't want Turkey to prosper any more under his government. During the Gezi protests in mid-2013 he put the blame on a certain “interest rate lobby,” implying the banking system, without being able to explain who the members of that "international lobby" were.

Yesterday, addressing his Justice and Development Party (AK Parti) group in Parliament, Erdoğan labeled another “lobby” that is trying to undermine his government: a "losers’ lobby." The “losers,” who belonged to the “old Turkey,” that is before his rule, according to Erdoğan, had “lost the game” and should recognize that they are now not supposed to have any word in the “new Turkey.”

He was particularly targeting the Turkish Industry and Business Association (TÜSİAD) and its Chairman Muharrem Yılmaz. Last week he accused Yılmaz of “betraying the country” because of a speech he delivered saying that foreign investment might not come to Turkey if the fight against corruption and the independence of the courts failed. The PM repeated yesterday that the Dec. 17 probe was a “coup attempt” under the cover of corruption claims.

TÜSİAD was in fact the third group that Erdoğan has accused of being “traitors” since Dec. 17. The second was “some of the media” and the first were sympathizers of Fethullah Gülen - a U.S.-resident moderate Islamist scholar - in the judiciary and security services, especially the police. Gülen, who used to be Erdoğan’s closest ally up until recently, is now his arch-enemy. The feelings are mutual apparently, after Gülen recently released a video cursing Erdoğan without naming him in person. Again without naming Gülen in person, Erdoğan calls his followers members of a “secret organization” who have formed a “parallel structure” within the state apparatus.

According to Kemal Kılıçdaroğlu, the leader of the main opposition Republican People’s Party (CHP), Erdoğan is trying to distract the media from covering corruption stories and from reporting on the statements and activities of opposition parties. Kılıçdaroğlu made fresh claims of corruption and asked questions involving a government-controlled bank and an NGO, named TÜRGEV, in which the PM’s son Bilal Erdoğan is involved. He asked whether a total of 99,999,990 U.S. dollars were put in TÜRGEV’s account in Vakıfbank and who put it there, implying that he knew the answer but not saying at this point.

The general manager of another government-controlled bank, Halkbank, was arrested as part of the Dec. 17 graft probe, accused of taking bribes in facilitating the oil-for-gold trade of an Iranian-origin businessman Reza Zarrab. Erdoğan had to sack four of his Cabinet ministers because their names were involved in the probe.

By escalating the tone of his speech, Erdoğan is forcing different sectors of society into a non-existent front against him, as if he is fighting against an organized plot. In the process he is also politically isolating himself. His thesis may not be convincing for those trying to observe Turkey rationally, but it endorses the faith of a core group of Erdoğan's supporters. The coming three elections will show how strong that core group is.