The Bosphorus in Istanbul with the backdrop of the Ortakoy Mosque and the 15 July Martyrs Bridge. EPA
The Bosphorus in Istanbul with the backdrop of the Ortakoy Mosque and the 15 July Martyrs Bridge. EPA
The Bosphorus in Istanbul with the backdrop of the Ortakoy Mosque and the 15 July Martyrs Bridge. EPA
The Bosphorus in Istanbul with the backdrop of the Ortakoy Mosque and the 15 July Martyrs Bridge. EPA


How to lose the crown jewel of cities, by Turkey's opposition


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February 15, 2024

“The whole world thinks this city is the most beautiful place on Earth,” Italian novelist Edmondo de Amicis wrote of Istanbul in the 19th century, and the sentiment has aged well.

No destination welcomed as many visitors last year as Turkey’s financial and cultural capital, according to Euromonitor International. More than 20 million travellers passed through Istanbul, a sharp increase on 2022.

The glittering metropolis of 16 million is all set for its turn in the electoral spotlight. Last week’s anniversary of the earthquakes in Turkey’s south-east, the deadliest natural disaster in its recent history, kicked campaigns for next month’s vote into high gear. All provinces, cities and districts are up for grabs on March 31, but the biggest prize, as always, is the jewel on the Bosphorus.

Home to 20 per cent of the population and close to 30 per cent of gross domestic product, Istanbul, not the capital Ankara, is Turkey’s true centre of power. Conservative parties linked to President Recep Tayyip Erdogan – Welfare, followed by the Justice and Development Party (AKP) – had run the city since Mr Erdogan held the mayoralty in the 1990s.

But that run ended in 2019, when Ekrem Imamoglu defeated the AKP not once but twice, emerging as a rising star and helping lift the main opposition Republican People’s Party (CHP) to victory in more than a dozen big cities.

Istanbul Mayor Ekrem Imamoglu, of the main opposition Republican People’s Party (CHP), at a rally in the city in May 2023. Reuters
Istanbul Mayor Ekrem Imamoglu, of the main opposition Republican People’s Party (CHP), at a rally in the city in May 2023. Reuters

In late 2022, a Turkish court sentenced Mr Imamoglu to prison for insulting election officials – a conviction that, if confirmed, would bring a ban from holding office. But as his appeal winds through the courts, the lynchpin CHP nominee remains in office and on the campaign trail, where he faces stiff headwinds.

A united opposition drove his 2019 victory, as the nationalist IYI party, the main pro-Kurdish party and others backed his candidacy. Yet following months of alliance infighting after the 2023 defeats, and the removal of former party chief Kemal Kilicdaroglu, the CHP is running alone this time around. IYI has nominated party vice-chair Bugra Kavuncu as its Istanbul candidate, while the pro-Kurdish DEM Party, as is its tradition, is backing joint candidates Murat Cepni and Meral Danis Bestas.

Running against the AKP’s Murat Kurum, a former environment minister, the various opposition candidates are sure to split the non-AKP vote. This could spell doom for Mr Imamoglu, who won the initial 2019 Istanbul mayoral race by just 13,000 votes. It surely didn’t help that instead of replacing Mr Kilicdaroglu soon after last year’s defeats, the CHP waited half a year.

As a result, new party chief Ozgur Ozel has only been in the post a few months and has already clashed with Mr Imamoglu over the choice of mayoral candidates. It’s come to the point where one can almost trust Turkey’s opposition to stumble into the worst strategy.

They should have run multiple candidates for last year’s presidential election, taking advantage of the run-off system to allow voters to choose, then unified behind a single Istanbul candidate for this year’s single-vote mayoral race. But that would have been eminently reasonable, like choosing the most popular figure to challenge Mr Erdogan, so true to form they have done precisely the opposite.

Put it all together and it’s no surprise the AKP has campaigned more confidently and aggressively thus far, buoyed by its greater resources and position of power. Turks tend to sympathise with their fellow Muslims, so Erdogan’s strongly pro-Palestinian stance on the Israel-Gaza war, which has dominated Turkish news for months, ensured an early head start.

President Recep Tayyip Erdogan, centre, with Istanbul mayoral candidate Murat Kurum, left, and Ankara mayoral candidate Turgut Altinok, right, at the AKP Congress Centre in the Turkish capital. AFP
President Recep Tayyip Erdogan, centre, with Istanbul mayoral candidate Murat Kurum, left, and Ankara mayoral candidate Turgut Altinok, right, at the AKP Congress Centre in the Turkish capital. AFP

Earthquake response is an urgent issue, particularly as millions of voters in Turkey’s south-east remain without homes or in need of aid. “If the central government and the provincial government aren’t working hand-in-hand, nothing goes to that city,” Mr Erdogan said early this month, appearing to link voter choice to quake response and reconstruction. (He followed up with a similar assertion this past weekend.)

The President cited CHP-run Antakya, where Mayor Lutfu Savas has faced sharp criticism for the city’s sluggish quake response. Locals want new homes and justice: 3,500 lawsuits on questionable building permits have yet to net a single city official.

Disaster preparedness is crucial in Istanbul, where experts expect another major quake this decade, following the 1999 temblor in nearby Izmit. The AKP’s Mr Kurum promises to build hundreds of thousands of quake-resistant homes, while Mr Imamoglu says he’s unsure of the city’s vulnerability because the government has blocked his efforts to inspect local buildings.

The AKP won last year by invoking nationalist pride, and Mr Erdogan has revived that theme, vowing that top Turkish defence firms would invest heavily in quake-damaged areas. Overall, the outlook is rosy for the governing party, though a potential hurdle popped up last week.

The religion-influenced New Welfare Party, which is allied with the AKP in parliament, announced its plan to run its own mayoral candidates in major cities, including Istanbul. As one of the country’s newer parties, it’s unlikely to draw much support, but just about every vote it does attract will probably be a former AKP voter.

Mr Imamoglu’s supporters fear that the government could expedite his trial at the last minute, barring him from political office and leaving the CHP scrambling to field a candidate. But even if it is possible, that probably won’t be necessary.

Despite record tourist visits to Istanbul, many locals have had enough. More than a quarter of a million people moved away last year, the city’s largest population decline in decades, probably due to sky-high rents and years of inflation. More recently, three terror attacks over a single two weeks – on a church, a courthouse and a campaign rally – have further unsettled Istanbullus.

Besides, it’s only a matter of time before the opposition shoots itself in the foot again. After last year’s disaster, Turkey’s opposition had to mount a perfect campaign to triumph in March. Instead, they have squabbled, fallen into competition and stumbled off the blocks.

“The one who has Istanbul rules the world,” Napoleon once said. That’s a bit hyperbolic nowadays, but either way, we may soon see a changing of the guard.

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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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