Turkish solders stay with weapons at Taksim square as people protest against the military coup in Istanbul on July 16, 2016. AFP
Turkish solders stay with weapons at Taksim square as people protest against the military coup in Istanbul on July 16, 2016. AFP
Turkish solders stay with weapons at Taksim square as people protest against the military coup in Istanbul on July 16, 2016. AFP
Turkish solders stay with weapons at Taksim square as people protest against the military coup in Istanbul on July 16, 2016. AFP


Why Erdogan can't cash in on a failed coup for much longer


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July 12, 2021

President Recep Tayyip Erdogan was enjoying a family holiday at the seaside villa of a businessman friend in the Mediterranean resort town of Marmaris when his brother-in-law called with news of a military-led attempt to overthrow his government.

After a live Facetime interview with CNN – “Let them do what they will. I have yet to see any power greater than that of the people," the president said – Mr Erdogan boarded a plane for Istanbul just before a swarm of armed putschists overran the villa, killing two policemen and injuring dozens of security personnel.

This Thursday marks five years since Turkey’s most recent coup attempt, which inspired a groundswell of support for the Erdogan government and has since reshaped the country's policies, institutions, political landscape and foreign posture as part of a new security state. The best of times for Mr Erdogan's backers have often been the worst of times for their opponents.

Ankara blamed the Islamic movement led by exiled preacher Fethullah Gulen for the failed coup and embarked on a series of purges, dismissing some 150,000 suspected Gulenists from public service and detaining tens of thousands. Following the cancellation of their passports, countless Turkish citizens with links to the movement fled the country, with some 30,000 ending up in EU countries, which mostly welcomed them.

Turkey has gone after them, and other foes. “The failed coup attempt of July 15, 2016, triggered a transformation in Turkey’s use of transnational repression,” says a 2021 report by rights watchdog Freedom House. The Turkish state went global in its hunt for so-called Feto (Fethullah Terrorist Organisation) members, detaining more than 110 suspects in nearly 30 foreign countries and returning them to Turkey to face prosecution. Just last week, Mr Erdogan announced that his government had captured the group’s Central Asia chief.

Meanwhile, at the government’s behest, Turkish nationalist and conservative groups have pegged the Kurdish movement, dissidents, activists and independent journalists as legitimate targets, along with Gulenists, and moved to weaponise the diaspora. In 2018, the head of the Turkish government’s diaspora oversight body urged Turks abroad to assist Ankara in its search for Gulenists, and Turkey's intelligence agency, MIT, released a smartphone app through which any Turkish citizen in Germany could report anyone for criticising Mr Erdogan or his government.

The ruling Justice and Development Party’s (AKP) parliamentary partnership with the far-right Nationalist Movement Party (MHP) began in late 2015, but their co-operation strengthened in the wake of the coup. Longtime MHP leader Devlet Bahceli, for instance, was among the first and the most vocal to support Mr Erdogan’s plan to shift Turkey to a presidential system, a move approved in a 2017 referendum.

Turkey’s self-exiled Islamic cleric Fethullah Gulen is blamed by President Recep Tayyip Erdogan for the 2016 coup attempt. AP Photo
Turkey’s self-exiled Islamic cleric Fethullah Gulen is blamed by President Recep Tayyip Erdogan for the 2016 coup attempt. AP Photo

The AKP sold its military activities in Syria, Libya and beyond as nationalist campaigns, which emboldened the MHP’s militant wing, known as the Grey Wolves, in Turkey and across Europe. A 2020 report by the Mena Research and Study Centre estimated that 20,000 members are active in Germany and at least 5,000 in Austria.

Last year, Grey Wolves attacked the Vienna rally of a Kurdish women’s organisation and a rally by French Armenians in Decines. “Let the Turkish government give me €2,000 and a weapon and I will do what needs to be done, wherever in France,” local Grey Wolves leader Ahmet Cetin reportedly said in a video from the latter event. France banned the Grey Wolves last November, and Germany, Austria and the Netherlands are considering similar measures.

This may be wise. In the 1970s and 80s, Grey Wolves would kill foes of the military regime on Turkish streets. This violence occasionally bled into Europe, as in 1981, when a Grey Wolf tried to assassinate Pope John Paul II in Vatican City. French journalist Guillaume Perrier says nationalist hate speech has become increasingly common among French Turks, who are mostly pro-AKP and supportive of the MHP.

Exiled journalist Can Dundar, who lives in Berlin, warned in The Washington Post of a Turkey-backed assassination plot, possibly linked to the Grey Wolves. The Turkish state responded by moving to seize his assets, in connection to his conviction for revealing state secrets. Ankara has also sought, and largely failed, to silence US-based professional basketball player Enes Kanter, who is openly supportive of Gulen, by prosecuting his father in Turkey.

Basketball star Enes Kanter, centre, has openly supported the Gulen movement. AP Photo
Basketball star Enes Kanter, centre, has openly supported the Gulen movement. AP Photo

At the same time, Ankara has also worked to shape European Islam. Turkish imams across the EU – thousands of them work at Turkish mosques under the guidance of Turkey’s religious directorate, the Diyanet – reportedly monitor their congregations for possible Gulenists, collect information and report back to the state.

A 2020 report by the French Senate describes the Muslim Brotherhood as the most problematic Islamist group in France and cites Turkey, which is responsible for training half the foreign imams in France while representing just five per cent of the population, as its main supporter. Turkey’s primary Islamist presence in Europe is Milli Gorus (National Vision), a movement created by Mr Erdogan’s mentor, former prime minister Necmettin Erbakan, that has as many as 150,000 members in Europe. In March, the Strasbourg municipal council approved €2.5 million (almost $3m) in funding for the construction of a Milli Gorus mosque that aims to be Europe’s largest. The funding was rescinded in April, following public outcry.

The ruling party is facing record low polling numbers and reports have detailed fissures in the AKP-MHP alliance

The AKP and Milli Gorus have been widely criticised for ties to the Muslim Brotherhood and violent extremist groups. Last month, a column in Turkish Islamist newspaper Yeni Safak, which is known to be close to the government, recalled the life of Brotherhood member and Al Qaeda co-founder Abdullah Azzam, describing him as a “Palestinian icon”. Lorenzo Vidino, director of the extremism programme at George Washington University, has argued that Turkey’s Islamist network across Europe increases Turkish influence and undermines European integration.

Exiled Turks in Germany have told news outlet ZDF they face direct threats from Turkey-run mosques, and German parliamentarian Sevim Dagdelen, who is of Turkish origin and has written for Turkish newspapers, lives under German police protection after she was targeted and suffered several personal attacks.

Just last week, exiled journalist Erk Acarer, who accused the AKP of “lies, hypocrisy and fraud” in an April tweet, suffered a knife attack at his Berlin home. "This is proof that everything we say about the Islamist, fascist AKP-MHP government is true," he tweeted after returning from the hospital, although his assailants have yet to be identified.

The morning after it had been defeated, Mr Erdogan labelled the failed coup a “gift from God” – a description that for him is likely to ring truer everyday. Turkish media last week ran images of his new 300-room, $74m summer palace, which has a crescent-shaped beach, swimming pools and a massive guesthouse along with gardens. Pro-government columnists referenced the 2016 coup plot in arguing that the new palace, which is in Marmaris, was needed for security reasons.

But just as the palace photos appeared online, First Lady Emine Erdogan urged Turks to consume smaller portions, part of a campaign to reduce waste. The juxtaposition angered many Turks, coming amid increasing poverty and 17.5 per cent inflation, a two-year high.

"People are starving, but he doesn't care,” Kemal Kilicdaroglu, head of the main opposition party, said of Mr Erdogan. “He built a summer palace for himself.”

Over the weekend, top pollster JamesinTurkey revealed that both the AKP and MHP are facing record low voter support, and several reports have detailed fissures in the AKP-MHP alliance as the former seeks to find a new coalition partner. After five years, Mr Erdogan’s days of cashing in on the failed coup to strengthen his control over Turkey and its diaspora may finally be coming to an end.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Sector: health technology
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Updated: July 12, 2021, 5:00 AM