Turkish Area Studies Review Bulletin of the British Association for Turkish Area Studies www.batas.org.uk No 32 Autumn 2018 ISSN 1474-0125 BATAS The 2018 John Martin Lecture Friday 30 November 2018 at 7.15 pm Richard Moore British Ambassador to Turkey, January 2014 to December 2017. on UK-Turkey relations in the Erdoğan Era in The Wolfson Lecture Theatre Paul Webley Wing, Senate House, SOAS University of London, Malet Street, WC1E 7HU Registration from 6.45 pm Free entry for BATAS members and all full-time students (on production of student ID) For others entry is £5.00 To be sure of getting a seat, you may reserve a place by emailing [email protected] Spring Symposium 2019 11 May 2019 at Emmanuel College, Cambridge Details will follow (see also www.batas.org.uk for more information) TAS Review Autumn 2018 CONTENTS A Bayraktaroğlu & S-B Martin 2 Editorial Politics, Society & Economics Mina Toksöz 3 The Turkish Economy Clement Dodd 9 Cyprus Update 2018 Mahmut Deniz Tansı 12 Turkish-Israeli Relations From the BATAS Symposium (May 2018) Gül-Berna Özcan 16 Piety, business and politics: Anatolian Capitalism at a Scary Altitude History & Culture Ceren Lord 21 The Diyanet’s Expanding Reach & the Tariqa Orders Gerald MacLean 26 Some British Equestrian Travellers in Ottoman Anatolia Filiz Yenişehirlioğlu 31 Koç University VEKAM Nilüfer Mizanoğlu Reddy 36 Sait Faik Abasıyanık & Sleeping in the Forest Şeref Hazinedar (translator) 42 Yahya Kemal Beyatlı, Nights of Melancholy Sigrid-B Martin 43 Some Noteworthy Events Conferences & Organisations Evrim Emir-Sayers 47 Ottoman Crossings Vienna 2017 John Moreton 49 WOCMES Seville 2018 Brian Beeley 50 BRISMES London 2018, Claire Reynolds 51 BIAA/ BATAS Oxford, September 2018 Reminiscence Mehmet Ali Dikerdem 53 1968 The year of living vicariously Part 1 John Moreton 59 East of Trebizond - A 2016 Update Book Reviews & Publications Emre Aracı 65 Murat Bardakçı, Neslishah: The Last Ottoman Princess Arın Bayraktaroğlu 68 Recent & Forthcoming Publications In memoriam Compiled by A Bayraktaroğlu 69 Bernard Lewis Bülent Gökay 71 Christopher Brewin Please note: Opinions expressed and stances taken are exclusively those of the contributors themselves. 1 TAS Review Autumn 2018 Editorial Since the last issue of TAS Review (no 31) both this publication and its interest area, Turkey, have gone through significant changes. Dr Brian Beeley, after a most successful co-editorship spanning nine years, resigned from this post last March. Dr Arın Bayraktaroğlu agreed to take his place working together with Sigrid Martin, the remaining Co-editor. Two co-editors who are not native speakers of English need reliable proof-readers and Stephen Parkin kindly agreed to make sure that each article reads well. However, Brian has not been able to ‘retire’ completely from TAS Review, and most of the contributions in this issue have undergone his perusal, for which we are most grateful. Turkey meanwhile has also gone through an unsteady period, with an escalating economic crisis, deteriorating foreign relations and elections for the presidency and the parliament which have consolidated a change in the regime from a democratic parliamentary system to presidential governance. The new presidency had been endorsed in April 2017 by the votes of only a slim majority (52% to 48%) amid widespread complaints that state resources and almost all the media had been unfairly used to the advantage of the administration. Furthermore, Turkey’s stance on freedom of expression continues to be a major concern both nationally and internationally. There are negotiations currently between the ruling party and its supporting partner in the parliament about who should benefit from a general amnesty which will probably release most detainees except offenders against children and women and supporters of `the enemies of the state`. Yet, it seems likely that the amnesty will (unfortunately) not cover many imprisoned academics, journalists, MPs and university students who criticised the government. These problems apart, the main difficulty in Turkey today seems to be the economic crisis which has developed as a result of (1) the government investing for sixteen years in infrastructure instead of in areas with a return in productivity, (2) deteriorated relations with Europe and the USA, discouraging foreign investment, and (3) the military presence in Syria and coping with nearly four million Syrian refugees. The current multi-faceted situation is analysed in our lead article by economist Mina Toksöz while Clem Dodd comments on developments in Northern Cyrpus. Our readership’s broad interests are also catered for with cultural, literary, socio-economic and historical pieces, as well as book reviews and conference reports. In the ‘Reminiscence’ section the reader is taken back to events of 1968 and on a journey through Anatolia in 2016. Aspects of religion versus politics are covered in contributions by Gül Berna Özcan and Ceren Lord. Two prominent scholars who each left a profound mark on Turkish Studies – Professor Bernard Lewis and Dr Christopher Brewin of Keele University – are remembered in the ‘In memoriam’ section. The next issue, just before our 2019 Spring Symposium, promises similarly diverse coverage. Please bring BATAS and TAS Review to the attention of all who are interested in Turkey and Turkish affairs. Arın Bayraktaroğlu Sigrid-B Martin Co-Editor Co-Editor 2 TAS Review Autumn 2018 The Turkish Economy Blundering into a Crisis by Mina Toksöz University of Manchester Business School Turkey blundered into a sharp lira turbulence in August that had begun in May. The causes were the classic text-book combination of domestic policy mistakes, deteriorating global environment, and a foreign policy spat – this time with the US and heightened by the clash between two strong-man leaders. With the latest August plunge, the lira lost around 40% per year by early-September when it was still not stabilised, increasing roll-over risks for the heavily indebted banks and corporates. The travails of the lira rippled across into other emerging market (EM) currencies; European banks with exposure to Turkey were affected, while Italian bond yields rose and the Euro weakened. As is usually the case, the actual events that set off the currency turmoil were not that momentous. In August, it was President Trump tweeting that he was doubling tariffs on Turkish steel and aluminium even though Turkish exports of these items to the US amount to only around $1bn – a tiny fraction of total exports. In May, it was a statement by President Erdoğan in London that when re-elected he would take charge of monetary policy – repeating something he had said before. But, given the context of accumulated vulnerabilities of the Turkish economy and growing worries about central bank independence, both these high-level interventions alarmed international investors bringing a sharp sell-off of lira assets and a rush into foreign currency by domestic investors. Since the start of 2018, the lira had been choppy. The global context for EM had deteriorated since April and in Turkey, the economy was steaming ahead growing 7.4% in the first quarter of 2018 that continued to widen the current account deficit (CAD) and fuel inflation. A reactive sharp rate rise by the CBRT (Central Bank) taking the main policy rate to 16.50% in response to the May lira plunge acted as a holding operation until after the June presidential election. But nervousness about Turkey continued about the impact of lira depreciation on the foreign currency debt of corporates and banks and worries that the new centralised Presidential system would further weaken institutions. However, it was the CBRT’s failure to raise the policy rate at its July meeting that brought a major loss of confidence about its commitment to fighting inflation. Announcements that policies to rebalance the economy would be revealed with the Medium-Term Plan (MTP) in September were seen as lacking credibility and urgency. The escalation of Trump’s trade war, singling out Turkey, against a backdrop of wider deterioration in relations with the US added fuel to the lira bonfire. The new government wanted to engineer a gradual, soft landing for the Turkish economy; but it turned into a sharp adjustment instead. 3 TAS Review Autumn 2018 Misjudging the global risks The Turkish government has known for some time that they need to tighten policy and to implement structural reforms to rebalance the economy from its heavy reliance on imports and foreign capital. The new government wanted to engineer a gradual, soft landing for the Turkish economy but it misjudged the extent and speed of changing global economic and political conditions and seemed oblivious to the worsening international sentiment towards Turkey. This was in major contrast with the positive investor interest during the early years of AKP rule with the start of the EU membership talks in 2005. Their early years also saw high levels of foreign direct investment inflows associated with Turkey’s privatisation programme; a real appreciation of the lira; and falling inflation and interest rates – in complete contrast to current conditions. Moreover, the global role of the US had changed dramatically with the election of President Trump: previous US presidents would try to calm market turmoil, but he was prepared to intensify it. Postponing policy adjustment since the global financial crisis (GFC) This isn’t the first time that Turkish governments have misjudged global conditions and delayed adjusting domestic policy. Most famously it happened in the mid- seventies; as oil prices shot up, the Ecevit government failed to rein in public spending resulting in the payments crisis of 1977. Turkey had a fixed currency regime then that made the adjustment process more painful. Today, the flexible currency takes the first hit from external shocks with the overall impact depending on how vulnerable the economy is.