Tuesday, February 27, 2007

Turkish military chief flexes some political muscle

By Vincent Boland in Ankara

The head of Turkey's armed forces used a visit to the US this month to fire a warning shot across the bows of his political masters at home.

Turkey was facing more threats to its national security than at any time in its modern history, General Yashar Buyukanit said, but its "dynamic forces" - its soldiers - would prevent any attempt to "break up the country".

Within days, the government in Ankara dropped a tentative plan to open official lines of communication with the civilian Kurdish leadership in northern Iraq - a controversial initiative but one that many countries are urging.

The government's acquiescence on an important foreign policy issue represents a decisive victory for military over political thinking. It also highlighted the continued influence of the military a decade after the generals ousted an Islamist government without firing a shot - an event that has become known as the "post-modern coup".

Despite legal and constitutional changes in the past four years to reduce their visibility in public life, to give civilian leaders a bigger say in matters of national security and to make the armed forces more accountable to parliament, the Turkish general staff can still influence and change government policy in a way that would be impossible in other European countries.

Cengiz Aktar, a professor at Bahcesehir University, says Gen Buyukanit's Washington speech was meant to send a signal to the end-of-term government and the nation at large that the military retained a pre-eminent role on national issues such as the threat of separatism. "If there was the slightest will on the part of the political leadership of Turkey to talk to the Kurdish leaders in Iraq, that will has now gone," he says.

Turkey has a history of military interference in its political affairs It is one of the legacies that most compromises its attempt to join the European Union.

In addition to the February 1997 coup there have been three coups d'état since 1960, complete with tanks on the streets, mass arrests, new constitutions and generals in uniform assuming top political positions. These interventions were sometimes welcomed by Turks, who regard the military as the country's most trustworthy institution.

Reforms to the status of a status-obsessed military since 2002 were accepted by the general staff because they were necessary to secure the opening of EU entry talks. Now, some observers say, Gen Buyukanit is testing the revised constitutional arrangements to see where the new border between the politicians and the military in Turkey lies.

"It's his attempt to understand the new parameters," says Omer Faruk Genckaya, an associate professor of political science at Bilkent University.

In particular, some observers say, the generals are worried that the constitutional changes have weakened the national security council - which was once dominated by the military and is now run by a civilian - without strengthening the political or civilian alternatives. This, they believe, has occurred at a time when Turkey's neighbourhood - it shares a border with Iraq, Iran, Syria, Georgia and Armenia - is going through profound upheaval.

Omer Taspinar, a fellow at the Brookings Institution in Washington, says Gen Buyukanit's prominence in recent weeks reflect the weakness of politicians as much as the new-found confidence of the military. "In the political vacuum created by inept politicians, both in power and in opposition, the general staff is once again filling a void and increasingly becoming a barometer of Turkey's stance," he wrote last week.

Gen Buyukanit has clashed with the government before, on issues from internal security to Cyprus. He seems certain to do so again in the run-up to presidential and parliamentary elections this year - as long as he feels the military is a better judge of the public mood than politicians. "Until politicians become more honest about the problems Turkey is facing, the military will always see a role for itself in society," Prof Genckaya says.

Copyright The Financial Times Limited 2007

Monday, February 26, 2007

The Long View: Demographics may show the consolations of old age

By Chris Brown-Humes

Populations in many parts of the developed world are shrinking. The ratio of pensioners to workers is rising. Economic and corporate profits growth must slow and financial markets sell off.
That is one view of how demographic change will play out in the next few decades. While a number of trends counter the economic impact of ageing, things do not seem particularly encouraging. Baby boomers are starting to retire in the developed world at a time when many families are having fewer children.
According to the UN, in the US, Japan and Europe – 70 per cent of the world economy – there will be as many people over 60 as of working age in 20 years’ time. In other words the ratio will shift to 50:50 from 30:70 at the start of this decade.
In certain parts of the globe the trend is particularly bad. Japan, Italy and Germany are well known for their adverse demographic profiles – Japan’s population is set to shrink from about 127m last year to 100m in 2050. Compare also China’s demographic profile with that of India. In the former, thanks to its one-child policy, population growth will be 6 per cent by 2050, while India’s is expected be 44 per cent.
As for emerging markets, while the populations of the Asia Pacific region and Latin America are set to grow robustly up to 2050, those of nearly all of central and eastern Europe will shrink – the notable exception being Turkey. Countries with high dependency ratios and falling populations could experience weaker economic growth and poorer investment returns. Lombard Street Research noted in a report last year: “In any economy, output growth can be treated as a function of changes to the labour force and of productivity growth. Further, the returns on financial assets over the long term tend to be related to output growth. Demographics can play a vital role in affecting a country’s output growth and so indirectly the return on financial assets.”
But the issue isn’t clear cut. Russia’s population may be shrinking, but in recent years its enormous resources and wealth along with the rising affluence of its middle class have made it an attractive investment destination rather than a place to avoid.
There is another aspect to the debate, which is the link between demographics and savings. This is based on the life-cycle theory that young people borrow, the middle-aged save and the elderly run down their savings. When a large proportion of the population is middle-aged, savings are high as people prepare for retirement. Equally, when the supply of savings is high, their price falls. In bond markets, this should mean lower yields. But the opposite is also the case: when the supply of savings is low – which could be the case when the number of retirees is high – yields should go up. So a rising dependency ratio could mean higher global bond yields.
As for equity markets, the price of shares should fall as baby boomers retire and cash in their savings. That process is exacerbated if there are fewer people of working age to buy them.
Things may not turn out so badly. According to Standard Life Investments, there are at least three reasons for economic growth not to be hit as badly by demographic change as pessimists fear. The first is the rapid growth of the developing economies, led by Brazil, Russia, India and China. The so-called Bric economies could be bigger than the G6 by 2035 in dollar terms, and 50 per cent bigger than them by 2050.
Second is migration. The US has relied on net immigration for many years to lift economic growth. More recently, UK economic performance seems to have benefited from an influx of workers from eastern Europe. Of course migration is a zero sum game: one country’s gain is another country’s loss in pure numerical terms. But that does not mean the net economic effect of migration is zero: it has the potential to lift the growth rate in some economies, just as it can improve labour market efficiency and cut unemployment.
Third is the increased willingness of retirees to work. A recent survey showed that 63 per cent of Japanese retirees planned to work at least part time. In any case, people are having to work longer as retirement ages are increased to offset burdens on state pension systems.
One final factor to consider is the accuracy of demographic projections. The UN sometimes changes its forecasts. For example, in 2000 it projected Spain’s population would be 31.3m in 2050. By 2004, its forecast for that year had climbed to 42.5m.
In spite of such positives, Richard Batty, global investment strategist at Standard Life Investments, says: “We would still expect global GDP growth to slow,” he says. “Specific examples include the US, where commentators are talking about trend growth rates slowing from 3-3.5 per cent to 2.5-3 per cent in, say, the next two decades. Similarly, the EU Commission has warned of slower trend growth ahead – around 0.5 per cent less than the current 1.5-2 per cent trend growth rates assumed.”
The basic message seems to be: do not exaggerate the impact of demographic change. Instead, look closely at regional and country allocations while not forgetting the positive impact that many (high-spending) retirees will have on sectors such as travel and leisure and healthcare.
chris.brown-humes@ft.com
Copyright The Financial Times Limited 2007

Islamic gathering in Pakistan not aimed at Shiites or Iran, says Turkish premier

CAIRO, Egypt: A string of meetings in Pakistan on Sunday for leaders of key Muslim Sunni nations are not aimed at forging an alliance against Shiite Iran, Turkish Prime Minister Recep Tayyip Erdogan said.
Pakistan will host a meeting of foreign ministers from seven Muslim nations on Sunday to discuss how to resolve the Israeli-Palestinian conflict and bring peace to Iraq and Afghanistan. Media reports in the Arab world suggested, however, that Pakistani President Gen. Pervez Musharraf aims to establish up a Sunni alliance to confront rising influence of Shiite Iran in the region.
"This is not designed to isolate any country," Erdogan told the Qatari-based Al-Jazeera television network Saturday. "It should not be taken from this (point of view)," he said in the interview recorded earlier Saturday in Istanbul, Turkey.
Musharraf has toured the Middle East and Asia to garner support for a Muslim initiative to stem the deepening conflicts that are destabilizing parts of the Islamic world.
The foreign ministers of Egypt, Indonesia, Malaysia, Turkey, Jordan and Saudi Arabia will gather in the Pakistani capital, Islamabad, on Sunday to lay the groundwork for a summit of Muslim leaders at an unspecified date in the holy city of Mecca, Saudi Arabia.

The goal of the summit is "a new initiative to address the grave situation in the Middle East, in particular the Palestinian issue, and for harmony in the Islamic world," the Pakistani foreign minister has said in a statement.
Musharraf visited Saudi Arabia, Egypt, Indonesia, Malaysia, Turkey and Iran in recent weeks to seek common ground for his initiative. He did not invite Iran or Syria for the meeting in Islamabad on Sunday.
Erdogan said Iran and Syria will be invited in a later stage.
Pakistan's foreign ministry spokeswoman Tasnim Aslan denied the conference aims at forming a Sunni alliance.
"It is not for Sunni countries, they are Islamic countries," she told Al-Jazeera, according to its Arabic translation of her comments broadcast Saturday by the channel on another show.
Musharraf has not announced concrete proposals to stabilize the Middle East, and it remains unclear how his ideas might relate to the efforts of the so-called Quartet — the U.S., the European Union, Russia and the U.N. — to revive its "road map" plan to resolve the Israeli-Palestinian conflict.

Thursday, February 22, 2007

Iraqi vice president pledges cooperation with Turkey against Kurdish separatists

ANKARA, Turkey: Iraq's vice president on Wednesday assured Ankara of his country's support for Turkey in its conflict with Kurdish separatist rebels.

Turkey is pressing neighboring Iraq and its ally, the United States, to crack down on rebels of the Kurdistan Workers Party, or PKK, who launch attacks on Turkey from bases in northern Iraq.

The group has been waging a bloody war in southeast Turkey since 1984 in a conflict that has claimed 37,000 lives.

Turkey has not ruled out military incursions into Iraq to hunt separatist Kurds, despite warnings from Washington, which fears that such a move could lead to tensions with local Iraqi Kurdish groups, an important ally of the U.S. in Iraq.

"We cannot struggle against foreign organizations," a translator initially quoted Adil Abdul-Mahdi — one of Iraq's two vice presidents_ as saying during a joint news conference with Turkish Foreign Minister Abdullah Gul.

But Abdul-Mahdi's statement, in Arabic, appeared to come as a surprise to Gul who questioned whether there may have been a translation error.

The Iraqi vice president then corrected his statement saying: "It is out of the question for us not to struggle against foreign organizations."

Abdul-Mahdi said Iraqi forces would do their best to prevent attacks on Turkey from Iraqi soil.

Iraqi Kurds, accused by Turkey's military of supporting separatist Kurdish guerrillas, have been urging Turkey to consider political solutions to deal with the guerrillas, saying any incursion would amount to interfering with Iraq's internal affairs.

The United States has been trying to address Turkish concerns in countering the PKK through mediation led by retired Gen. Joseph Ralston, a former NATO supreme allied commander.

But Turkish officials have accused Washington of not doing enough to help counter separatist Kurdish rebels operating inside neighboring Iraq.

Prime Minister Recep Tayyip Erdogan has said no action has been taken to expel the PKK from bases in northern Iraq or to cut off financial support to the rebel group. The group is considered a terrorist organization by the United States and the European Union.

Cyprus to go ahead with oil and gas exploration despite Turkey's opposition

ATHENS, Greece: Cyprus' president said Wednesday his government would press ahead with an offshore oil and gas exploration program, dismissing strong objections from Turkey.

But Tassos Papadopoulos warned that it was uncertain whether possible fuel deposits off the island's southern coast would be sufficient for commercial exploitation.

"We will exercise our sovereign rights," Papadopoulos said. "If (Turkey) wants to break international law in an act of provocation, I believe the international community must judge this."

"The exploitation of deposits, if they are located in commercially exploitable quantities — and this is a major if — will be handled accordingly," Papadopoulos said after talks with Prime Minister Costas Karamanlis.

Angering Turkey, Cyprus opened international bidding last week for 11 offshore areas, with a number of international firms showing interest. The divided island's internationally recognized Greek Cypriot government has also signed deals with Lebanon and Egypt to mark out Mediterranean sea boundaries.

Papadopoulos accused Turkey of engaging in "threats and provocations" by warning Cyprus not to go ahead with the project.

Karamanlis said it was "self-evident" that EU member Cyprus had the sovereign right to conduct offshore exploration.

He said Turkey, as a candidate for EU membership, was "obliged to maintain good neighborly relations and conform to international law."

The island has been divided into a Greek Cypriot controlled south and a breakaway Turkish Cypriot north since a Turkish invasion in 1974. Turkey — which does not recognize Papadopoulos' Greek Cypriot government — has said the exploration project would conflict with Turkish rights in the area, as well as those of Turkish Cypriots.

Turkish officials said they could proceed with their own exploration plans, threatening tension with Greece. Both countries came close to war in 1987 because of a dispute over oil rights in disputed areas of the Aegean Sea.


Tuesday, February 20, 2007

US genocide bill angers Turks

Simon Tisdall
Friday February 16, 2007
The Guardian

It seems an odd way to treat a friend. Washington's relations with Turkey, a key Nato ally, have been on the slide since 2003 when Ankara's parliament refused to allow US troops to transit into Iraq. That infuriated the Bush administration. Ensuing chaos in Iraq and the impetus the occupation has given Kurdish secessionism infuriated Turks in their turn. Iran and Hamas are other points of strain. One recent poll found that 81% of Turks disapprove of US policies.

Now the relationship is heading for a potentially spectacular rupture following the decision of the US House of Representatives' newly installed Democratic leadership to follow France in endorsing a bill officially recognising as genocide the 1915 killings of Christian Armenians by Muslim Turks. As matters stand, there is sufficient bipartisan support to pass the measure if, as expected, it is put to a vote in the next few weeks.

The genocide label is an ultra-sensitive issue in Turkey. It has long claimed that mass killings at the time by both sides were part of the civil upheavals accompanying the collapse of the Ottoman empire. "If this measure is adopted it will create a very serious problem in US-Turkish relations," a senior Turkish official said yesterday. "You cannot put Turkey in the same shoes as the Nazis." Armenia (and the Armenian diaspora) should accept a proposal by Turkey's prime minister, Recep Tayyip Erdogan, to set up a joint commission to study what happened, the official said.

But politics in Ankara and Washington are stoking confrontation. A presidential election is due in Turkey in May, followed by parliamentary polls this autumn. Neither Mr Erdogan, tipped as the next president, nor other candidates can ignore intense national feelings stirred by the genocide debate. At the same time, the Democratic speaker, Nancy Pelosi, like other House members from California, has a vociferous Armenian-American constituency to placate. When Turkey's foreign minister, Abdullah Gul, was in Washington last week, she refused to meet him. "Local politics must not be allowed to poison strategic ties," Mr Gul said later. Passage of the bill would create a "nightmare".

Calls are already being heard in Turkey for a downgrading of bilateral military cooperation, including logistical assistance to US forces in Iraq. General Yasar Buyukanit, chief of the Turkish general staff, went to the Pentagon this week to spell out the possible damaging consequences.

"Turkey is playing the security card against the genocide bill," wrote columnist Mehmet Ali Birand of the Turkish Daily News. That meant reminding the Americans of Turkey's contributions in Afghanistan and Kosovo, its supportive ties to Israel - Ehud Olmert was in Ankara yesterday - and the way it "actively participates in communications between Iran and the US".

The White House opposes the bill but may be unable to stop it. Meanwhile, the US is urging Turkish "outreach" to Armenia in the wake of the Hrant Dink murder.

But new reasons for killing off the resolution are emerging every day. One is that a surge in anti-Americanism following its passage could translate into a Turkish decision to ignore Washington and send its troops into northern Iraq, with potentially disastrous consequences for US efforts to stabilise the country.

The senior Turkish official said there was no plan to intervene and no link to the genocide bill. But Ankara is increasingly impatient over US reluctance to suppress armed PKK separatists who launch raids into south-east Turkey from Iraqi Kurdistan. And according to Asli Aydinbas, of Sabah newspaper, a "limited and defined" Turkish military intervention in Iraq is already on the cards.

"The US government believes passage of the Armenian resolution would make a cross-border operation more likely," he said. "Even a debate on the floor of the House of Representatives would end Washington's power to deter such an operation." Seen this way, the genocide bill could spark a whole new bloodbath.

Thursday, February 15, 2007

US-Turkey relations set to worsen over Iraq and Armenian 'genocide'

By Guy Dinmore in Washington and Vincent Boland in Ankara

Turkey's strained relationship with the Bush administration is likely to worsen after its foreign minister, Abdullah Gul, failed to make significant progress on Ankara's main objectives in Washington this week.
Disagreements, centred on Iraq and a resolution proposed in the US Congress that would officially recognise the mass killings of Ottoman Armenians as genocide, threaten to intensify anti-American sentiment in Turkey, while raising concerns in the US about a possible Turkish military intervention in northern Iraq.
Analysts suggest the disputes could undermine US efforts to enlist Turkey's support in isolating Iran, an issue that Dick Cheney, US vice-president, is believed to have raised.
Mr Gul's week-long visit to the US had three main aims: to get a firm US commitment to act against anti-Turkish PKK militants in northern Iraq; to postpone a referendum due this year on the status of Iraq's Kurdish-claimed and oil-rich city of Kirkuk; and to lobby against the Armenia resolution.
"Gul will not leave Washington a very happy man," said Bulent Aliriza, analyst with the CSIS think-tank. "Relations will take a hit."
Mr Gul told reporters that the proposed genocide resolution - which is backed by key lawmakers, including Nancy Pelosi, Democratic speaker of the House - posed a "real threat" to US-Turkey relations.
"It really is a nightmare for us and for you. It will overshadow and spoil everything between us," he warned.
Ms Pelosi signalled her position by not being available to meet Mr Gul.
The White House is also unhappy with the resolution, but it remains uncertain how far President George W. Bush will go to lobby against it.
Several countries, notably France, have already adopted a similar stance on recognising the killings of Christian Armenians by Ottoman troops as the empire collapsed in 1915. Armenians say it was genocide. Turkey denies this and says they, and hundreds of thousands of Muslim Turks, died as a result of civil war, displacement, disease and hunger.
Anxiety has been heightened by the murder in Istanbul on January 19 of Hrant Dink, a prominent Turkish-Armenian journalist. Mr Dink was well known among the Armenian diaspora in the US, especially in California, the home state of Ms Pelosi.
On Kirkuk, US officials say it is for the Iraqi government to decide whether to proceed with the referendum to decide its status.
Copyright The Financial Times Limited 2007

Monday, February 12, 2007

US-Turkey relations set to worsen over Iraq and Armenian 'genocide'

By Guy Dinmore in Washington and Vincent Boland in Ankara
Published: February 9 2007 02:00 | Last updated: February 9 2007 02:00

Turkey's strained relationship with the Bush administration is likely to worsen after its foreign minister, Abdullah Gul, failed to make significant progress on Ankara's main objectives in Washington this week.

Disagreements, centred on Iraq and a resolution proposed in the US Congress that would officially recognise the mass killings of Ottoman Armenians as genocide, threaten to intensify anti-American sentiment in Turkey, while raising concerns in the US about a possible Turkish military intervention in northern Iraq.

Analysts suggest the disputes could undermine US efforts to enlist Turkey's support in isolating Iran, an issue that Dick Cheney, US vice-president, is believed to have raised.

Mr Gul's week-long visit to the US had three main aims: to get a firm US commitment to act against anti-Turkish PKK militants in northern Iraq; to postpone a referendum due this year on the status of Iraq's Kurdish-claimed and oil-rich city of Kirkuk; and to lobby against the Armenia resolution.

"Gul will not leave Washington a very happy man," said Bulent Aliriza, analyst with the CSIS think-tank. "Relations will take a hit."

Mr Gul told reporters that the proposed genocide resolution - which is backed by key lawmakers, including Nancy Pelosi, Democratic speaker of the House - posed a "real threat" to US-Turkey relations.

"It really is a nightmare for us and for you. It will overshadow and spoil everything between us," he warned.

Ms Pelosi signalled her position by not being available to meet Mr Gul.

The White House is also unhappy with the resolution, but it remains uncertain how far President George W. Bush will go to lobby against it.

Several countries, notably France, have already adopted a similar stance on recognising the killings of Christian Armenians by Ottoman troops as the empire collapsed in 1915. Armenians say it was genocide. Turkey denies this and says they, and hundreds of thousands of Muslim Turks, died as a result of civil war, displacement, disease and hunger.

Anxiety has been heightened by the murder in Istanbul on January 19 of Hrant Dink, a prominent Turkish-Armenian journalist. Mr Dink was well known among the Armenian diaspora in the US, especially in California, the home state of Ms Pelosi.

On Kirkuk, US officials say it is for the Iraqi government to decide whether to proceed with the referendum to decide its status.