Erdogan’s Putsch Purge Spreads Into Media, Energy, Finance

EghtesadOnline: Turkey’s post-putsch purge of dissent reached deeper into the economy as authorities shuttered scores of media outlets, detained the head of a major company and banned the chief strategist of a leading brokerage.

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02 August 2016

More than 130 media organizations, including 16 television broadcasters and 45 newspapers, were ordered closed in a decree published late Wednesday. The Cihan news agency, which has more than 500 employees, and the newspapers Taraf, Zaman and its English-language Today’s Zaman were among them, reports Bloomberg.

Turkey has suspended or removed at least 60,000 people from jobs in the military, security services, judiciary, Finance Ministry and academia since the failed July 15-16 coup left more than 250 dead. Another 1,600 soldiers, including 149 generals and admirals, were dismissed just hours after President Recep Tayyip Erdogan huddled with the chief of the armed forces.

“More than 40 percent of Turkey’s highest ranking officers have been discharged, suggesting that this coup attempt had considerable support, or acceptance, from the highest levels of the armed forces,” said Aaron Stein, resident senior fellow at the Washington-based Atlantic Council. “The implication is that they either were supportive of the coup attempt, or that the top civilian leaders felt that they couldn’t be trusted. Both are bad.”

Hunting Gulenists

The crackdown is targeting alleged followers of Fethullah Gulen, the U.S.-based cleric Erdogan blames for the uprising. Erdogan accuses Gulen, a former ally who denies any wrongdoing, of operating a “parallel state” through legions of followers in his secretive organization. Almost 16,000 Turks have been detained in the post-coup sweep, about half of whom are awaiting trial.

Efforts to root out suspected Gulenists resulted in the first firing and detention of a head of a top 30 Turkish company, Petkim, a unit of Azerbaijan’s state oil company SOCAR. Petkim said its general manager, Sadettin Korkut, is among dozens of employees that have been fired since the Energy Market Regulatory Authority called on companies to dismiss Gulen supporters.

Turkish stocks and bonds advanced after the Federal Reserve signaled it was in no rush to raise rates, boosting emerging market assets and outweighing concerns of political turmoil in the country of 79 million people.

Authorities widened the scope of the clampdown Wednesday when they stripped the head of research of one of the country’s largest brokerages of his license over a report analyzing the impact of the putsch, stunning investors.

Illegal Insults

Mert Ulker of Ak Investment failed to “fulfill his responsibilities” in publishing his analysis, the Capital Markets Board said in a statement, without elaborating. Ulker, who couldn’t be reached for comment, faces criminal charges under laws against insulting the president or its institutions.

“If this environment persists, Turkey will reach a point where confidence in its financial sector and economy will crumble, as far as foreign investors are concerned,” Ghanem Nuseibeh, the founder of London-based risk consultancy Cornerstone Global Associates.

Turk Telekomunikasyon AS, the country’s largest phone company by sales, said that it sacked more than 200 employees and that three of those, including its chief technology officer, are in custody. Lebanon’s Hariri family controls 55 percent of Turk Telekom, with the state owning 30 percent.

The upheaval is decimating Turkey’s tourist industry, a key source of foreign-currency revenue. Data released by the culture and tourism ministry Thursday showed arrivals dropped in June for the 11th straight month, the longest streak of declines on record. The government expects the economy to expand 4.5 percent this year, a full percentage point more than the consensus forecast of economists surveyed by Bloomberg.

The Supreme Military Council is scheduled to meet Thursday to replace ousted officers and debate further purges. Erdogan, who’s said he’d sign a bill bringing back the death penalty for crimes including treason, announced a three-month state of emergency last week, giving the cabinet the power to issue decrees with the force of law.

“The key point from an investor perspective is having predictability and a strong rule of law,” said William Jackson, senior emerging markets economist at Capital Economics in London. “On their own these individual decisions might not have much impact, but taken together they suggest policy-making may be becoming more centralized and possibly more arbitrary too.”