1 00:00:03,279 --> 00:00:06,680 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:06,720 --> 00:00:09,760 Speaker 1: dot Com, the radio plus Global Laft and on your radio. 3 00:00:10,080 --> 00:00:14,080 Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters. 4 00:00:14,120 --> 00:00:17,040 Speaker 1: I'm Catherine Coldary Wall Street. Joining the global rally for 5 00:00:17,079 --> 00:00:20,320 Speaker 1: a second day, and the dollar is weakening their speculation 6 00:00:20,400 --> 00:00:24,000 Speaker 1: that policymakers will move to prevent the UK's European secession 7 00:00:24,280 --> 00:00:27,440 Speaker 1: from hampering global growth. The smp F I founded has 8 00:00:27,440 --> 00:00:30,000 Speaker 1: erased its loss for the year on Goldman SAX index 9 00:00:30,000 --> 00:00:32,600 Speaker 1: of the most shortage chairs is up the most since eleven. 10 00:00:33,040 --> 00:00:35,320 Speaker 1: Britain's foot see one hundred has he raised its post 11 00:00:35,320 --> 00:00:38,000 Speaker 1: Brexit losses with a six point three percent gain over 12 00:00:38,080 --> 00:00:40,880 Speaker 1: two days. We took the markets every fifteen minutes throughout 13 00:00:40,880 --> 00:00:44,000 Speaker 1: the trading day on Bloomberg Radio Now Industrial Leverage currently 14 00:00:44,000 --> 00:00:46,400 Speaker 1: have two hundred sixty eight points one and a half 15 00:00:46,440 --> 00:00:50,280 Speaker 1: percent trading at seventeen thousand, six hundred seventy nine. SMP 16 00:00:50,320 --> 00:00:52,880 Speaker 1: five founded up thirty five points one point seven percent 17 00:00:52,920 --> 00:00:56,080 Speaker 1: to two thousand seventy NAZAC up and ninety three points 18 00:00:56,120 --> 00:00:59,960 Speaker 1: I gain of two percent trading at eighty four West type. 19 00:01:00,000 --> 00:01:02,120 Speaker 1: This intermediate crude oil up a dollar eighty one and 20 00:01:02,200 --> 00:01:05,440 Speaker 1: barrel three eight percent to forty sixty six. It's about 21 00:01:05,440 --> 00:01:09,200 Speaker 1: gold up ten dollars thirty cents announced to twenty and 22 00:01:09,280 --> 00:01:11,320 Speaker 1: the tenure treasury is down one thirty second with the 23 00:01:11,360 --> 00:01:14,200 Speaker 1: yield of one point four six percent. And that sub 24 00:01:14,200 --> 00:01:19,120 Speaker 1: Bloomberg Business Flash you're listening to Taking Stock with Kathleen 25 00:01:20,600 --> 00:01:27,440 Speaker 1: Bloomberg Radio. We turn now to Turkey, to Istanbul, in particular, 26 00:01:28,080 --> 00:01:32,560 Speaker 1: uh Turkey deploying anti terrorism squads at Istanbul's main international 27 00:01:32,600 --> 00:01:36,600 Speaker 1: airport after three suspected Islama State suicide bombers killed forty 28 00:01:36,600 --> 00:01:39,839 Speaker 1: one people this week, and this underscores, among other things, 29 00:01:39,840 --> 00:01:42,480 Speaker 1: the country struggle to contain a spill over from serious 30 00:01:42,480 --> 00:01:44,959 Speaker 1: civil war. If you're watching all the news flow on 31 00:01:44,959 --> 00:01:47,480 Speaker 1: your Bloomberg today, you're seeing stories of how houses hit 32 00:01:47,960 --> 00:01:52,120 Speaker 1: Turkey's tourism U industry. You're seeing a story about the 33 00:01:52,160 --> 00:01:55,280 Speaker 1: lyri rizing with other emerging markets because there's a bet 34 00:01:55,320 --> 00:01:58,520 Speaker 1: now that they'll be stimulus to offset the damage. What 35 00:01:58,600 --> 00:02:02,559 Speaker 1: does this mean for the country, for its president and 36 00:02:02,800 --> 00:02:05,880 Speaker 1: its economy going forward? Very happy to welcome to the 37 00:02:05,880 --> 00:02:10,760 Speaker 1: show now Gareth Jenkins, political security analyst who is joining 38 00:02:10,919 --> 00:02:14,480 Speaker 1: us from Istanbul, Gareth, welcome to the show. Thank you 39 00:02:14,560 --> 00:02:16,240 Speaker 1: very much for having me. I had to start by 40 00:02:16,280 --> 00:02:20,600 Speaker 1: asking you about the mood in Istanbul today. It's very depressed. 41 00:02:20,639 --> 00:02:23,840 Speaker 1: I mean there were lots of concerns previously. We've already 42 00:02:23,880 --> 00:02:28,520 Speaker 1: had two attacks of course, earlier this year from miss 43 00:02:28,560 --> 00:02:31,399 Speaker 1: another one from the p k K. And I think 44 00:02:31,400 --> 00:02:34,400 Speaker 1: the scale of what happened last night has really hits 45 00:02:34,480 --> 00:02:40,239 Speaker 1: very hard. Well, it's uh, I mean hit. I think 46 00:02:40,360 --> 00:02:42,080 Speaker 1: when I saw the headlines crossing, I think all of 47 00:02:42,120 --> 00:02:44,000 Speaker 1: us our heart goes out. You feel it. It could 48 00:02:44,000 --> 00:02:46,480 Speaker 1: have been an airport anywhere. It feels like it's could 49 00:02:46,480 --> 00:02:50,200 Speaker 1: have been one of your loved ones. In Turkey in particular, though, 50 00:02:50,200 --> 00:02:55,600 Speaker 1: where there's so many cross currents, uh, so many dynamics politically, 51 00:02:56,400 --> 00:02:59,240 Speaker 1: What what do people leak to do? Who do they blame? 52 00:02:59,600 --> 00:03:04,200 Speaker 1: What do what? I think it's a certain extence. We've 53 00:03:04,200 --> 00:03:07,280 Speaker 1: had so many of these it's been very difficult to 54 00:03:07,440 --> 00:03:11,160 Speaker 1: single at anybody to blame. And this attack is unusual 55 00:03:11,200 --> 00:03:13,959 Speaker 1: in that previously mostly attacks be cool, they've been against 56 00:03:14,000 --> 00:03:17,520 Speaker 1: foreigners by ISIS. In in Istanbul we've had attacked by 57 00:03:17,520 --> 00:03:20,080 Speaker 1: the p k K that have been primarily directed as 58 00:03:20,120 --> 00:03:24,359 Speaker 1: the security forces. But this just seemed to be at people, 59 00:03:25,080 --> 00:03:28,360 Speaker 1: and I think that really is one of the reasons 60 00:03:28,360 --> 00:03:31,519 Speaker 1: it's has had such an impact. And of course there 61 00:03:31,600 --> 00:03:35,040 Speaker 1: is um there's anger with the government. Government gets gets 62 00:03:35,120 --> 00:03:38,680 Speaker 1: blamed because ultimately it's supposed to be responsible for security. 63 00:03:38,720 --> 00:03:42,760 Speaker 1: And we've also had some people questioning the security at 64 00:03:42,760 --> 00:03:46,600 Speaker 1: the airport itself. Um. But to a large extent, I 65 00:03:46,600 --> 00:03:49,160 Speaker 1: think the mood is is still very much one of shock. 66 00:03:50,280 --> 00:03:52,880 Speaker 1: The blame game really hasn't quite started yet that maybe 67 00:03:52,960 --> 00:03:55,560 Speaker 1: we may see that over the next few days. Well, 68 00:03:55,560 --> 00:03:58,440 Speaker 1: you know, you're a piece that would recommend everybody to 69 00:03:58,520 --> 00:04:01,160 Speaker 1: find online. Is one that you public just five days 70 00:04:01,160 --> 00:04:06,840 Speaker 1: ago June four. Currently no indication as to when President 71 00:04:06,920 --> 00:04:10,000 Speaker 1: Erdowa will leave power, but Turkey is now deep into 72 00:04:10,000 --> 00:04:13,200 Speaker 1: the final and highly turbulent stage of his domination of 73 00:04:13,240 --> 00:04:16,720 Speaker 1: the country's politics. Uh. Sometimes you think that people turn 74 00:04:16,760 --> 00:04:20,000 Speaker 1: to a strong man when they're under attack. Does instead 75 00:04:20,080 --> 00:04:23,200 Speaker 1: they'll yet another attack? We can has hold on power, 76 00:04:23,520 --> 00:04:28,760 Speaker 1: which you argue he's doing everything he can to maintain. Yes, 77 00:04:28,960 --> 00:04:31,000 Speaker 1: I think it does. I mean one of the one 78 00:04:31,000 --> 00:04:32,800 Speaker 1: of the big problems at the moments. Of course, we 79 00:04:32,839 --> 00:04:35,400 Speaker 1: have two security sets. We have what one from the 80 00:04:35,440 --> 00:04:37,880 Speaker 1: p k K, and we also have one from ISIS. 81 00:04:38,240 --> 00:04:40,760 Speaker 1: And I think most people outside ed On was in 82 00:04:40,760 --> 00:04:43,320 Speaker 1: the circle though that they whatever when they think of 83 00:04:43,400 --> 00:04:45,560 Speaker 1: the p k K. There there is a way forward there, 84 00:04:45,600 --> 00:04:49,479 Speaker 1: and that's the return to talks, which would also not 85 00:04:49,640 --> 00:04:53,040 Speaker 1: only probably persuade the p k K to an answer 86 00:04:53,080 --> 00:04:55,359 Speaker 1: sea file, but would free up a lot of the 87 00:04:55,400 --> 00:04:59,280 Speaker 1: resources as are needed in terms of intelligence um to 88 00:04:59,480 --> 00:05:03,119 Speaker 1: focus more on isis which is a you cannot talk 89 00:05:03,120 --> 00:05:05,000 Speaker 1: with isis M. You can talk with the p k 90 00:05:05,200 --> 00:05:09,000 Speaker 1: K and reduce the violence. But ed One's put himself 91 00:05:09,000 --> 00:05:10,680 Speaker 1: in a position where he found there can be no 92 00:05:10,800 --> 00:05:14,520 Speaker 1: returned the talks um where he's trying to change the 93 00:05:14,560 --> 00:05:18,239 Speaker 1: constitution to get a presidential system which concentrates all power 94 00:05:18,240 --> 00:05:24,040 Speaker 1: in his own hands, to demonstrate he can deliver solutions um, 95 00:05:24,040 --> 00:05:27,240 Speaker 1: and he's avowed to crush the p k K. It's 96 00:05:27,360 --> 00:05:29,840 Speaker 1: very difficult for him. It's now to step back and 97 00:05:29,960 --> 00:05:32,560 Speaker 1: return to to talk without losing a lot of credibility 98 00:05:32,600 --> 00:05:35,920 Speaker 1: amongst his hardcore supporters. Of course, of UH. The p 99 00:05:36,120 --> 00:05:41,279 Speaker 1: k K UH is the Kurdistan Workers Party. That's the 100 00:05:41,320 --> 00:05:44,520 Speaker 1: Kurdish acronym for it. For those that maybe who are 101 00:05:44,520 --> 00:05:49,880 Speaker 1: not following all of this quite so closely. So what 102 00:05:50,360 --> 00:05:54,600 Speaker 1: so the next as Ardawan reaches for power, then internally 103 00:05:54,720 --> 00:05:57,520 Speaker 1: and in terms of the various factions that are in Turkey, 104 00:05:57,640 --> 00:06:00,720 Speaker 1: who is supporting him, who may be opposed in him, 105 00:06:00,760 --> 00:06:04,960 Speaker 1: could we see some kind of I don't know, in 106 00:06:05,080 --> 00:06:08,280 Speaker 1: election and uprising something that that moves against him in 107 00:06:08,279 --> 00:06:13,360 Speaker 1: a very dramatic way. We've seen a very unfortunate erosion 108 00:06:13,400 --> 00:06:16,520 Speaker 1: of faith in the rule of law, and we're seeing 109 00:06:16,560 --> 00:06:20,080 Speaker 1: a couple of measures at the moments preparing to go 110 00:06:20,200 --> 00:06:24,440 Speaker 1: through Parliament that will tighten adman control of the judiciary. 111 00:06:25,279 --> 00:06:28,120 Speaker 1: We've just had a motion gone through Parliament that's lifted 112 00:06:28,160 --> 00:06:31,240 Speaker 1: the immunities of all of the current members of the 113 00:06:31,240 --> 00:06:35,200 Speaker 1: Parliament of five hundred and fifty deputies. Um. But we're 114 00:06:35,240 --> 00:06:40,960 Speaker 1: expecting there to be core cases against the opposition, both 115 00:06:41,080 --> 00:06:45,599 Speaker 1: the mainstreaming opposition of the Republican People's Party and also 116 00:06:45,640 --> 00:06:49,560 Speaker 1: the pro Kurdish People's Democratic Party. And I think this 117 00:06:49,760 --> 00:06:53,640 Speaker 1: call if these people are these opposition politicians that behind 118 00:06:53,680 --> 00:06:57,440 Speaker 1: bars and we could get a quite a lot of protests. 119 00:06:57,880 --> 00:07:01,320 Speaker 1: It's tempting to see the ruling system development part he 120 00:07:01,360 --> 00:07:04,800 Speaker 1: has being wholly united behind head on. They're certainly frightened 121 00:07:04,800 --> 00:07:07,560 Speaker 1: of him, but there are people within the party who 122 00:07:07,560 --> 00:07:10,800 Speaker 1: are very concerned about that. They're actually he's taking Turkey. 123 00:07:11,080 --> 00:07:14,120 Speaker 1: And the hope is that at some time they stand 124 00:07:14,200 --> 00:07:19,400 Speaker 1: up and and try to hold this seemingly accelerating slide 125 00:07:19,440 --> 00:07:22,880 Speaker 1: into authoritarianism. But quite what that trigger would be to 126 00:07:23,000 --> 00:07:27,080 Speaker 1: persuade um them to come out, we still don't know 127 00:07:27,720 --> 00:07:30,720 Speaker 1: now ether one President ear One has reached out. Just 128 00:07:30,840 --> 00:07:33,520 Speaker 1: this week, he's ending a six year rift with Israel. 129 00:07:33,680 --> 00:07:37,560 Speaker 1: He's unexpectedly moving to mentories with Russia. What is his 130 00:07:37,640 --> 00:07:40,840 Speaker 1: motivation there? Does he perceive himself as weakened by some 131 00:07:40,920 --> 00:07:42,920 Speaker 1: of these events? Do does he see this as part 132 00:07:42,920 --> 00:07:46,560 Speaker 1: of him increasing his hold on power to take a 133 00:07:46,600 --> 00:07:49,200 Speaker 1: move with countries In the past he's been very much 134 00:07:49,200 --> 00:07:55,360 Speaker 1: opposed to absolutely and with with the Israeli agreement, is 135 00:07:55,400 --> 00:07:57,120 Speaker 1: he's actually gone back on what he said was this 136 00:07:57,240 --> 00:08:00,480 Speaker 1: core demand, which was to remove the blockade the Gaza. 137 00:08:00,880 --> 00:08:05,360 Speaker 1: I don't think the agreement with themselves has been negotiated 138 00:08:05,400 --> 00:08:08,280 Speaker 1: for more than three years. It's not going to have 139 00:08:08,320 --> 00:08:11,600 Speaker 1: a big impact. What could have an impact is uh 140 00:08:12,080 --> 00:08:14,160 Speaker 1: the meeting, what the telephone call they had today, with 141 00:08:14,440 --> 00:08:20,600 Speaker 1: Vladimer prutin Um, particularly if that leads to um, you know, 142 00:08:20,640 --> 00:08:25,440 Speaker 1: an improvement in the economic relationship, because Russians were the 143 00:08:25,600 --> 00:08:30,040 Speaker 1: second largest source of tourism the Turkey UM since of 144 00:08:30,200 --> 00:08:34,680 Speaker 1: Putin effectively prevented Russians coming, we've had a nine percent 145 00:08:34,800 --> 00:08:38,640 Speaker 1: decrease in the Russian tourists coming to the country. And 146 00:08:38,679 --> 00:08:41,000 Speaker 1: of course tourism has been very badly hit by the 147 00:08:41,160 --> 00:08:46,040 Speaker 1: by security concern so that may have an impact, But 148 00:08:46,160 --> 00:08:48,920 Speaker 1: I think generally the reason he's moved now is because 149 00:08:48,920 --> 00:08:54,720 Speaker 1: he's understood that Turkey is very dangerously isolated internationally and 150 00:08:55,200 --> 00:08:58,920 Speaker 1: he needs to improve relations with with somebody, and with 151 00:08:59,040 --> 00:09:02,680 Speaker 1: Russian particularly. There's the opportunity to do something which could 152 00:09:02,679 --> 00:09:06,480 Speaker 1: give a boost to the tourism sector, which is huge. 153 00:09:06,480 --> 00:09:11,400 Speaker 1: It's a single largest source of Palm currency for Turkey 154 00:09:11,720 --> 00:09:16,920 Speaker 1: and numbers so far down down. The expectation is that 155 00:09:17,040 --> 00:09:20,280 Speaker 1: things go on once we get into the peak season, 156 00:09:20,280 --> 00:09:24,520 Speaker 1: they're going down even even further and a lot of hotels, etcetera. 157 00:09:24,559 --> 00:09:28,800 Speaker 1: Could could go into liquidation. So there was big economic 158 00:09:28,840 --> 00:09:33,600 Speaker 1: benefits for him. M you know, that's Pluton, and in 159 00:09:33,640 --> 00:09:35,160 Speaker 1: the way of a terrorist attack, people might find a 160 00:09:35,160 --> 00:09:37,439 Speaker 1: little bit trivial to talk about the tourism industry, but 161 00:09:37,520 --> 00:09:39,360 Speaker 1: as you point out, this is so important to Turkey. 162 00:09:39,360 --> 00:09:42,679 Speaker 1: Turkey also a very important destination for emerging market investors 163 00:09:42,840 --> 00:09:46,079 Speaker 1: more broadly, Uh, is that another threat to Arnawan that 164 00:09:46,120 --> 00:09:48,600 Speaker 1: the economy is not doing as well as it once was. 165 00:09:48,640 --> 00:09:51,199 Speaker 1: How much is all of this affecting the growth of 166 00:09:51,280 --> 00:09:55,960 Speaker 1: this very important destination for investors. Yes, I think it is. 167 00:09:56,000 --> 00:09:59,480 Speaker 1: I mean it's one of the the I think the 168 00:09:59,640 --> 00:10:03,920 Speaker 1: largely ignored factors behind the grip that he's been. He's 169 00:10:03,960 --> 00:10:07,440 Speaker 1: managed to put on on Turkish politics as a lot 170 00:10:07,480 --> 00:10:10,440 Speaker 1: of people voted for him and voted for the ruling 171 00:10:10,640 --> 00:10:14,760 Speaker 1: Justice and Development Party because of its economic record, But 172 00:10:14,840 --> 00:10:17,959 Speaker 1: he doesn't seem to understand that he's now undermining it's 173 00:10:17,960 --> 00:10:20,880 Speaker 1: for one of the things investors care most about. I 174 00:10:20,880 --> 00:10:23,880 Speaker 1: think they don't care how much unfortunately about democracy and 175 00:10:23,960 --> 00:10:26,920 Speaker 1: rule of law, but they do care very much about 176 00:10:26,960 --> 00:10:31,880 Speaker 1: stability um and they need to see at the moment 177 00:10:31,920 --> 00:10:35,400 Speaker 1: that their investments are going to be to be secure 178 00:10:35,400 --> 00:10:37,640 Speaker 1: if they put money into the country. Gareth quick final 179 00:10:37,760 --> 00:10:40,560 Speaker 1: question ten seconds, will will air to one hold under 180 00:10:40,559 --> 00:10:42,839 Speaker 1: power in a year? In two years and five years? 181 00:10:44,040 --> 00:10:47,440 Speaker 1: My predictions has been until two thousand, two thousand nineteen 182 00:10:47,480 --> 00:10:51,360 Speaker 1: will be gone. Thank you so very much. Fascinating discussion 183 00:10:51,400 --> 00:10:54,679 Speaker 1: of Turkey, where the country is heading and where President 184 00:10:54,679 --> 00:10:56,839 Speaker 1: are to On is heading as well. Gareth Jenkins, thank 185 00:10:56,840 --> 00:11:00,160 Speaker 1: you so much. Writer, independent political security analysts and a 186 00:11:00,240 --> 00:11:05,280 Speaker 1: senior fellow with the Central Asia CAUCUSUS Institute and Silk 187 00:11:05,360 --> 00:11:10,280 Speaker 1: Road Studies Program Joint Center. Joining us today from Istanbul. 188 00:11:10,760 --> 00:11:13,559 Speaker 1: I'm Kathleen Hayes. This is taking Stock on Bloomberg Radio.