WEBVTT - Gareth Jenkins Says Turkey Needs to Forge Relationships (Audio) 0:00:03.279 --> 0:00:06.680 Global business news twenty four hours a day at Bloomberg 0:00:06.720 --> 0:00:09.760 dot Com, the radio plus Global Laft and on your radio. 0:00:10.080 --> 0:00:14.080 This is a Bloomberg Business Flash from Bloomberg World Headquarters. 0:00:14.120 --> 0:00:17.040 I'm Catherine Coldary Wall Street. Joining the global rally for 0:00:17.079 --> 0:00:20.320 a second day, and the dollar is weakening their speculation 0:00:20.400 --> 0:00:24.000 that policymakers will move to prevent the UK's European secession 0:00:24.280 --> 0:00:27.440 from hampering global growth. 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We turn now to Turkey, to Istanbul, in particular, 0:01:28.080 --> 0:01:32.560 uh Turkey deploying anti terrorism squads at Istanbul's main international 0:01:32.600 --> 0:01:36.600 airport after three suspected Islama State suicide bombers killed forty 0:01:36.600 --> 0:01:39.839 one people this week, and this underscores, among other things, 0:01:39.840 --> 0:01:42.480 the country struggle to contain a spill over from serious 0:01:42.480 --> 0:01:44.959 civil war. If you're watching all the news flow on 0:01:44.959 --> 0:01:47.480 your Bloomberg today, you're seeing stories of how houses hit 0:01:47.960 --> 0:01:52.120 Turkey's tourism U industry. You're seeing a story about the 0:01:52.160 --> 0:01:55.280 lyri rizing with other emerging markets because there's a bet 0:01:55.320 --> 0:01:58.520 now that they'll be stimulus to offset the damage. What 0:01:58.600 --> 0:02:02.559 does this mean for the country, for its president and 0:02:02.800 --> 0:02:05.880 its economy going forward? Very happy to welcome to the 0:02:05.880 --> 0:02:10.760 show now Gareth Jenkins, political security analyst who is joining 0:02:10.919 --> 0:02:14.480 us from Istanbul, Gareth, welcome to the show. Thank you 0:02:14.560 --> 0:02:16.240 very much for having me. I had to start by 0:02:16.280 --> 0:02:20.600 asking you about the mood in Istanbul today. It's very depressed. 0:02:20.639 --> 0:02:23.840 I mean there were lots of concerns previously. We've already 0:02:23.880 --> 0:02:28.520 had two attacks of course, earlier this year from miss 0:02:28.560 --> 0:02:31.399 another one from the p k K. And I think 0:02:31.400 --> 0:02:34.400 the scale of what happened last night has really hits 0:02:34.480 --> 0:02:40.239 very hard. Well, it's uh, I mean hit. I think 0:02:40.360 --> 0:02:42.080 when I saw the headlines crossing, I think all of 0:02:42.120 --> 0:02:44.000 us our heart goes out. You feel it. It could 0:02:44.000 --> 0:02:46.480 have been an airport anywhere. It feels like it's could 0:02:46.480 --> 0:02:50.200 have been one of your loved ones. In Turkey in particular, though, 0:02:50.200 --> 0:02:55.600 where there's so many cross currents, uh, so many dynamics politically, 0:02:56.400 --> 0:02:59.240 What what do people leak to do? Who do they blame? 0:02:59.600 --> 0:03:04.200 What do what? I think it's a certain extence. We've 0:03:04.200 --> 0:03:07.280 had so many of these it's been very difficult to 0:03:07.440 --> 0:03:11.160 single at anybody to blame. And this attack is unusual 0:03:11.200 --> 0:03:13.959 in that previously mostly attacks be cool, they've been against 0:03:14.000 --> 0:03:17.520 foreigners by ISIS. In in Istanbul we've had attacked by 0:03:17.520 --> 0:03:20.080 the p k K that have been primarily directed as 0:03:20.120 --> 0:03:24.359 the security forces. But this just seemed to be at people, 0:03:25.080 --> 0:03:28.360 and I think that really is one of the reasons 0:03:28.360 --> 0:03:31.519 it's has had such an impact. And of course there 0:03:31.600 --> 0:03:35.040 is um there's anger with the government. Government gets gets 0:03:35.120 --> 0:03:38.680 blamed because ultimately it's supposed to be responsible for security. 0:03:38.720 --> 0:03:42.760 And we've also had some people questioning the security at 0:03:42.760 --> 0:03:46.600 the airport itself. Um. But to a large extent, I 0:03:46.600 --> 0:03:49.160 think the mood is is still very much one of shock. 0:03:50.280 --> 0:03:52.880 The blame game really hasn't quite started yet that maybe 0:03:52.960 --> 0:03:55.560 we may see that over the next few days. Well, 0:03:55.560 --> 0:03:58.440 you know, you're a piece that would recommend everybody to 0:03:58.520 --> 0:04:01.160 find online. Is one that you public just five days 0:04:01.160 --> 0:04:06.840 ago June four. Currently no indication as to when President 0:04:06.920 --> 0:04:10.000 Erdowa will leave power, but Turkey is now deep into 0:04:10.000 --> 0:04:13.200 the final and highly turbulent stage of his domination of 0:04:13.240 --> 0:04:16.720 the country's politics. Uh. Sometimes you think that people turn 0:04:16.760 --> 0:04:20.000 to a strong man when they're under attack. Does instead 0:04:20.080 --> 0:04:23.200 they'll yet another attack? We can has hold on power, 0:04:23.520 --> 0:04:28.760 which you argue he's doing everything he can to maintain. Yes, 0:04:28.960 --> 0:04:31.000 I think it does. I mean one of the one 0:04:31.000 --> 0:04:32.800 of the big problems at the moments. Of course, we 0:04:32.839 --> 0:04:35.400 have two security sets. We have what one from the 0:04:35.440 --> 0:04:37.880 p k K, and we also have one from ISIS. 0:04:38.240 --> 0:04:40.760 And I think most people outside ed On was in 0:04:40.760 --> 0:04:43.320 the circle though that they whatever when they think of 0:04:43.400 --> 0:04:45.560 the p k K. There there is a way forward there, 0:04:45.600 --> 0:04:49.479 and that's the return to talks, which would also not 0:04:49.640 --> 0:04:53.040 only probably persuade the p k K to an answer 0:04:53.080 --> 0:04:55.359 sea file, but would free up a lot of the 0:04:55.400 --> 0:04:59.280 resources as are needed in terms of intelligence um to 0:04:59.480 --> 0:05:03.119 focus more on isis which is a you cannot talk 0:05:03.120 --> 0:05:05.000 with isis M. You can talk with the p k 0:05:05.200 --> 0:05:09.000 K and reduce the violence. But ed One's put himself 0:05:09.000 --> 0:05:10.680 in a position where he found there can be no 0:05:10.800 --> 0:05:14.520 returned the talks um where he's trying to change the 0:05:14.560 --> 0:05:18.239 constitution to get a presidential system which concentrates all power 0:05:18.240 --> 0:05:24.040 in his own hands, to demonstrate he can deliver solutions um, 0:05:24.040 --> 0:05:27.240 and he's avowed to crush the p k K. It's 0:05:27.360 --> 0:05:29.840 very difficult for him. It's now to step back and 0:05:29.960 --> 0:05:32.560 return to to talk without losing a lot of credibility 0:05:32.600 --> 0:05:35.920 amongst his hardcore supporters. Of course, of UH. The p 0:05:36.120 --> 0:05:41.279 k K UH is the Kurdistan Workers Party. That's the 0:05:41.320 --> 0:05:44.520 Kurdish acronym for it. For those that maybe who are 0:05:44.520 --> 0:05:49.880 not following all of this quite so closely. So what 0:05:50.360 --> 0:05:54.600 so the next as Ardawan reaches for power, then internally 0:05:54.720 --> 0:05:57.520 and in terms of the various factions that are in Turkey, 0:05:57.640 --> 0:06:00.720 who is supporting him, who may be opposed in him, 0:06:00.760 --> 0:06:04.960 could we see some kind of I don't know, in 0:06:05.080 --> 0:06:08.280 election and uprising something that that moves against him in 0:06:08.279 --> 0:06:13.360 a very dramatic way. We've seen a very unfortunate erosion 0:06:13.400 --> 0:06:16.520 of faith in the rule of law, and we're seeing 0:06:16.560 --> 0:06:20.080 a couple of measures at the moments preparing to go 0:06:20.200 --> 0:06:24.440 through Parliament that will tighten adman control of the judiciary. 0:06:25.279 --> 0:06:28.120 We've just had a motion gone through Parliament that's lifted 0:06:28.160 --> 0:06:31.240 the immunities of all of the current members of the 0:06:31.240 --> 0:06:35.200 Parliament of five hundred and fifty deputies. Um. But we're 0:06:35.240 --> 0:06:40.960 expecting there to be core cases against the opposition, both 0:06:41.080 --> 0:06:45.599 the mainstreaming opposition of the Republican People's Party and also 0:06:45.640 --> 0:06:49.560 the pro Kurdish People's Democratic Party. And I think this 0:06:49.760 --> 0:06:53.640 call if these people are these opposition politicians that behind 0:06:53.680 --> 0:06:57.440 bars and we could get a quite a lot of protests. 0:06:57.880 --> 0:07:01.320 It's tempting to see the ruling system development part he 0:07:01.360 --> 0:07:04.800 has being wholly united behind head on. They're certainly frightened 0:07:04.800 --> 0:07:07.560 of him, but there are people within the party who 0:07:07.560 --> 0:07:10.800 are very concerned about that. They're actually he's taking Turkey. 0:07:11.080 --> 0:07:14.120 And the hope is that at some time they stand 0:07:14.200 --> 0:07:19.400 up and and try to hold this seemingly accelerating slide 0:07:19.440 --> 0:07:22.880 into authoritarianism. But quite what that trigger would be to 0:07:23.000 --> 0:07:27.080 persuade um them to come out, we still don't know 0:07:27.720 --> 0:07:30.720 now ether one President ear One has reached out. Just 0:07:30.840 --> 0:07:33.520 this week, he's ending a six year rift with Israel. 0:07:33.680 --> 0:07:37.560 He's unexpectedly moving to mentories with Russia. What is his 0:07:37.640 --> 0:07:40.840 motivation there? Does he perceive himself as weakened by some 0:07:40.920 --> 0:07:42.920 of these events? Do does he see this as part 0:07:42.920 --> 0:07:46.560 of him increasing his hold on power to take a 0:07:46.600 --> 0:07:49.200 move with countries In the past he's been very much 0:07:49.200 --> 0:07:55.360 opposed to absolutely and with with the Israeli agreement, is 0:07:55.400 --> 0:07:57.120 he's actually gone back on what he said was this 0:07:57.240 --> 0:08:00.480 core demand, which was to remove the blockade the Gaza. 0:08:00.880 --> 0:08:05.360 I don't think the agreement with themselves has been negotiated 0:08:05.400 --> 0:08:08.280 for more than three years. It's not going to have 0:08:08.320 --> 0:08:11.600 a big impact. What could have an impact is uh 0:08:12.080 --> 0:08:14.160 the meeting, what the telephone call they had today, with 0:08:14.440 --> 0:08:20.600 Vladimer prutin Um, particularly if that leads to um, you know, 0:08:20.640 --> 0:08:25.440 an improvement in the economic relationship, because Russians were the 0:08:25.600 --> 0:08:30.040 second largest source of tourism the Turkey UM since of 0:08:30.200 --> 0:08:34.680 Putin effectively prevented Russians coming, we've had a nine percent 0:08:34.800 --> 0:08:38.640 decrease in the Russian tourists coming to the country. And 0:08:38.679 --> 0:08:41.000 of course tourism has been very badly hit by the 0:08:41.160 --> 0:08:46.040 by security concern so that may have an impact, But 0:08:46.160 --> 0:08:48.920 I think generally the reason he's moved now is because 0:08:48.920 --> 0:08:54.720 he's understood that Turkey is very dangerously isolated internationally and 0:08:55.200 --> 0:08:58.920 he needs to improve relations with with somebody, and with 0:08:59.040 --> 0:09:02.680 Russian particularly. There's the opportunity to do something which could 0:09:02.679 --> 0:09:06.480 give a boost to the tourism sector, which is huge. 0:09:06.480 --> 0:09:11.400 It's a single largest source of Palm currency for Turkey 0:09:11.720 --> 0:09:16.920 and numbers so far down down. The expectation is that 0:09:17.040 --> 0:09:20.280 things go on once we get into the peak season, 0:09:20.280 --> 0:09:24.520 they're going down even even further and a lot of hotels, etcetera. 0:09:24.559 --> 0:09:28.800 Could could go into liquidation. So there was big economic 0:09:28.840 --> 0:09:33.600 benefits for him. M you know, that's Pluton, and in 0:09:33.640 --> 0:09:35.160 the way of a terrorist attack, people might find a 0:09:35.160 --> 0:09:37.439 little bit trivial to talk about the tourism industry, but 0:09:37.520 --> 0:09:39.360 as you point out, this is so important to Turkey. 0:09:39.360 --> 0:09:42.679 Turkey also a very important destination for emerging market investors 0:09:42.840 --> 0:09:46.079 more broadly, Uh, is that another threat to Arnawan that 0:09:46.120 --> 0:09:48.600 the economy is not doing as well as it once was. 0:09:48.640 --> 0:09:51.199 How much is all of this affecting the growth of 0:09:51.280 --> 0:09:55.960 this very important destination for investors. Yes, I think it is. 0:09:56.000 --> 0:09:59.480 I mean it's one of the the I think the 0:09:59.640 --> 0:10:03.920 largely ignored factors behind the grip that he's been. He's 0:10:03.960 --> 0:10:07.440 managed to put on on Turkish politics as a lot 0:10:07.480 --> 0:10:10.440 of people voted for him and voted for the ruling 0:10:10.640 --> 0:10:14.760 Justice and Development Party because of its economic record, But 0:10:14.840 --> 0:10:17.959 he doesn't seem to understand that he's now undermining it's 0:10:17.960 --> 0:10:20.880 for one of the things investors care most about. I 0:10:20.880 --> 0:10:23.880 think they don't care how much unfortunately about democracy and 0:10:23.960 --> 0:10:26.920 rule of law, but they do care very much about 0:10:26.960 --> 0:10:31.880 stability um and they need to see at the moment 0:10:31.920 --> 0:10:35.400 that their investments are going to be to be secure 0:10:35.400 --> 0:10:37.640 if they put money into the country. Gareth quick final 0:10:37.760 --> 0:10:40.560 question ten seconds, will will air to one hold under 0:10:40.559 --> 0:10:42.839 power in a year? In two years and five years? 0:10:44.040 --> 0:10:47.440 My predictions has been until two thousand, two thousand nineteen 0:10:47.480 --> 0:10:51.360 will be gone. Thank you so very much. Fascinating discussion 0:10:51.400 --> 0:10:54.679 of Turkey, where the country is heading and where President 0:10:54.679 --> 0:10:56.839 are to On is heading as well. Gareth Jenkins, thank 0:10:56.840 --> 0:11:00.160 you so much. Writer, independent political security analysts and a 0:11:00.240 --> 0:11:05.280 senior fellow with the Central Asia CAUCUSUS Institute and Silk 0:11:05.360 --> 0:11:10.280 Road Studies Program Joint Center. Joining us today from Istanbul. 0:11:10.760 --> 0:11:13.559 I'm Kathleen Hayes. This is taking Stock on Bloomberg Radio.