Where Is Netanyahu Taking Israel? Part 2

In a previous post, I discussed how Netanyahu and conservative forces have been pushing Israel inexorably towards a one state solution and how this was causing a major change in the outlook and attitude of Jews in Diaspora.

Today, I want to focus on the substantive reasons behind this change.

One State or Two States?

As you might know, there is a debate about a one-state vs two-state solutions for the Palestinian statehood issue.

The former would require the establishment of a federal state on the current territories including Gaza and West Bank. It would mean that Israelis could no longer have a Jewish state and Palestinians would have to give up their aspiration to become independent and autonomous.

The latter, on the other hand, would entail, as the name implies, the creation of two states for two nations.

Lately, many international observers (and, I gather, quite a few Palestinians) are starting to favor the one state approach. I understand the intellectual appeal of the single state solution.

It would solve the major stumbling block of finding a contiguous territory on which to build a viable Palestinian state. The single state solution would also keep all parts of Jerusalem in the same country. And the Palestinian claims to their repossessed land could be handled through regular legal and compensatory means of a unitary state apparatus.

I am also aware that most of the "progressive" observers favor this solution.

You might say, "what's wrong with that idea? Why should "they" have a Jewish state, Wouldn't you object to a Muslim or Catholic or an ethnic state?"

I get the inference.

But Jewish state means something different from, say, a religious source of legitimacy like the one provided by House of Wahhab or some racial notion as a political foundation. To assume this is to ignore Jewish history.

I am not Jewish. But I know their history quite well. Unlike your average gentile who thinks that "they" are good with money and "they" run the world, I know that Jews have always prioritized education over material possessions, they have maintained, by and large, a progressive political identity and they have usually sided with the oppressed groups in their societies.

I also know that they are unique among all minorities in that they have been relentlessly persecuted throughout recorded history.

To non-Jews, Israel is a nation state like any other. And I grant that, in many instances, it behaves like one.

But to Jews, Israel is not any nation state. It is a safe haven, a place they can go to if things turned nasty again, as they did so many times in the past. They may not like to live there right now (40 percent of Israelis are thinking of emigrating elsewhere and a million Jews left the country in the last two decades). They may fret about the growing influence of religious Jews and where it might take Israeli society. But the idea of a Jewish state out there is incredibly important to them.

This is why your Jewish friends wince and grow silent when you criticize Israel, even if they quietly agree with the points made. This is also why they ignore or tolerate Israel's very questionable actions and policies towards Palestinians, even though they would have opposed the same policies if they were implemented by any other nation state.

Within that context, it is not an exaggeration to claim that a one state solution might require Jews to give up the idea of a Jewish state because such a state would hardly conform to the Jewish identity as they know it.

I know it is a big claim. Let me explain it.

Consequences of Managing the "Other"

What I mean is something quite straightforward: Since a large majority of Israelis say that they would never give up the idea of a Jewish state, a de facto one state solution would necessitate Jews "to manage" a sizable minority, - one that would become a majority in a decade or so- i.e. to treat them as second class citizens and deprive them of their rights.

You might think the terminology of "managing" is loaded and misleading. Actually, it is not my word, it belongs to the current Defense Minister Moshe Ya'alon, as he talks about "managing" the problem without ever solving it. And you know what that means.

“There are those who mislead the people or part of the people when they say that peace can be achieved,” Ya’alon said, and explained at length why “this conflict cannot be resolved.” He also said that “there are problems that cannot be solved and shouldn’t be solved,” arguing that “until the Palestinians give up their narrative, there will be no peace here.” Since the Palestinian people are unlikely to give up their narrative, Ya’alon suggests we shake off ''the illusion of conflict resolution'' and make do with managing the conflict. “We don’t have a time problem,” concluded the senior minister. “Time works in favor of those who know how to put it to good use.”

You might wonder what that management specifically includes.

Domestically, it means an ever expanding settlement regime (while denying building permits to Palestinians). It also refers to a carefully designed system to maintain a segregated and unequal arrangement:

An editorial in Haaretz this month observed that Israel was really “two separate states, one Arab and one Jewish. … This is the gap between the Jewish state of Israel, which is a developed Western nation, and the Arab state of Israel, which is no more than a Third World country.” 

Segregation is enforced in all the main spheres of life: land allocation and housing, citizenship rights, education, and employment. 

None of this is accidental. It was intended this way to guarantee Israel’s future as a Jewish state. Legal groups have identified 57 laws that overtly discriminate between Jewish and Palestinian citizens, with a dozen more heading towards the statute books.

If you need to see a detailed account of what occupation does to Israeli society, there is more here.

In any event, to put the issue in starker and more provocative terms, a combination of one state solution and a Jewish state would inevitably lead to a society where Israelis would have their very own "other," a group that would live amongst them, carrying their own invisible "star" on their nonexistent lapels.

If you think I am giving in to hyperbole, remember Professor Yeshayahu Leibowitz's decades-old warning:

“A state ruling over a hostile population of one million people will necessarily become a Shin Bet state, with all that this implies for education, freedom of speech and thought and democracy. The corruption found in any colonial regime will affix itself to the State of Israel. The administration will have to suppress an uprising on the one hand and acquire Quislings, or Arab traitors, on the other.”

I once pointed to a distinction between the Jewish and Israeli perspectives (while discussing Shin Bet and Gatekeepers). If Israel continues to believe that the Palestinian populations can be "managed" within a one state structure, using similar policies, that distinction could become too sharp to be tenable.

And Jews in Diaspora know this. AIPAC change of heart reflects that new reality, something the Netanyahu government and conservative Israelis have not yet grasped.

At this point, you might wonder, what happens next. After all, if I claim that no one can evict settlers, that means the peace process is dead, right?

Maybe. Maybe not.

First I want to highlight the divergence of strategy between the Palestinian and Israeli sides, as they can prove instructive for the first time in a long time. And I will point to a lever to force a change in polarized countries like Israel and Turkey where the conservative forces seem immutable.

Stay tuned.

Where Is Netanyahu Taking Israel? Part 1

If you are a regular reader of this humble soapbox, you will know my obsession with the twin peace processes involving the Kurds and the Palestinians.

And my rarely shared conviction that the US has been pushing for Kurdish and Palestinian statehood to ensure regional stability. And my occasional despair that shortsighted leaders like Erdogan and Netanyahu doing all they can to stop this from happening.

But this shortsighted charge actually hides a much more complicated reality and an intriguingly similar political climate in Israel and Turkey.

You see, in both countries, conservative voters are on the rise and are forcing their choices on these deeply polarized societies. In recent years, conservative forces everywhere have developed a strong sense of martyrdom. They maintain that the whole world is against them. They claim that they are being stabbed in the back by their progressive countrymen. And as a result, they are in no mood to compromise and to work with their political adversaries. It is the universalization of the Tea Party mentality.

In both Turkey and Israel, after years of denial and lengthy speeches, the political left and the center finally came to the bitter realization that the right created such a strong reality on the ground that nothing they can do will be enough to reverse it. Indeed, it is not an exaggeration to state that in Turkey the Islamist and in Israel the settlers and the extremists control the future and in both countries the left and center share the same deer-in-a-headlight frozen desperation.

I discussed Turkey's future in a recent post. This post is about what the future holds for Israel.

In Israel, no one believes that settlers can be removed from even some of the lands they occupied. There is no such force. Even the IDF is incapable of doing that. Perhaps consequently, a whopping 87 percent of Israelis believe that nothing will come out of the current peace talks.

It is true that the current coalition government is simply incapable of negotiating and concluding a peace deal. One of Netanyahu's larger partners, Naftali Bennett's HaBayit HaYehudi is dead set against any accord with the Palestinians. In fact, recently, the blustery conservative politician threatened to quit if Palestinian prisoners were freed.

If Netanyahu wants to remain PM, he has no real options to replace Bennett's party. There are a few Orthodox parties that would be happy to join the coalition but Netanyahu's largest partner, Yair Lapid's Yesh Atid used his veto against this move. And the Labour Party is in no mood to help Netanyahu climb out of the hole he dug himself into.

In that sense, Netanyahu is a lame duck PM who is left with stalling as his survival strategy.

Someone else in his position might have called early elections or use the American pressure to bargain with some of his current or prospective coalition partners. Not him. Instead, he opted to alienate and anger Israel's biggest and best ally, the US.

Goading the Obama Administration

First, he appointed Ron Dremer as Israel's ambassador. Ron who, you might ask. Well, he was the guy who arranged for Netanyahu to host a fund raising dinner in Jerusalem for Mitt Romney in July 2012.

This was like giving President Barack Obama the finger. Later, Dermer traveled to the United States to help the casino mogul Sheldon Adelson goad as many Jews as possible into voting for Romney. That didn't pan out. Adelson’s gamble, into which Netanyahu, Dermer and Israel were dragged almost against their will, proved to be a bust. Subsequently, the already problematic relations were further shaken up. It was then that Netanyahu decided to dispatch Dermer to Washington as his ambassador.

A few months ago, Minister of Defense Moshe Ya'alon tried to pull a Sharon and publicly ridiculed Kerry. (His "Messianic fervor" remark earned his government a strong rebuke from Washington and Israel had to apologize.)

When John Kerry realized that his shuttle diplomacy was going nowhere he expressed his displeasure rather bluntly. Instead of taking the American frustration seriously, Netanyahu upped the ante.

On April 13, the Israeli daily Ha'aretz ran a headline stating that the Obama administration was furious at Israel for not siding with the United States at the United Nations during one of the administration’s most important diplomatic initiatives on Russian interference in Ukraine. Ron Prosor, Israel’s ambassador, was absent from the vote. The official excuse was a strike at Israel’s Foreign Ministry. This wasn’t the only vote in which Israel did not participate during that time, but below the surface, the issue has become a bona fide crisis. Having enjoyed an automatic US veto for many years — a veto that occasionally gives Obama a serious ulcer and is cast (reluctantly) due to a commitment to historical relations — Israel could have, as a declarative statement, stood by the United States during this difficult time. Instead, it opted to sit on the bench and clutch on to a diplomatic strike as a pretext.

Moreover, when the Administration communicated their anger to the Israeli government, Maj. Gen Amos Gilad from the Ministery of Defense said this: "The US is involved in its own way, but our [Israel's] security interests should not be defined as identical to that of any one else, even the US."

As an Israeli commentator put it:

In other words, there are times when Israel is closer to the Russian side than to the US side — an utter folly that could prove to be a historic mistake.

You might speculate that Netanyahu chose to go after the Obama Administration because he knew that AIPAC and Israel's solid support in Congress would provide him cover. If this was true at some point, it is no longer valid.

AIPAC, once the unwavering supporter of everything-Likud, has been putting some distance between itself and the Netanyahu government. After losing two bruising battles in Congress upon Netanyahu's insistence (the appointment of Chuck Hagel as Secretary of State and the imposition of additional sanctions after Iran signed the nuclear deal), AIPAC decided to pull back.

Sen. Bob Corker, the ranking Republican on the Senate Foreign Relations Committee, spoke about this with the Israeli ambassador in Washington, Ron Dermer, telling The Daily Beast afterward, “AIPAC and Israel are in different places on this issue.”

As you can imagine, this is huge: First, AIPAC never loses a battle in Congress. Second, it never acknowledges any distance between itself and Israel.

In case you wonder if this is the work of a Democratic President and a his Senate majority, it goes beyond that. When Netanyahu tried to use AIPAC to lobby against the Iran nuclear deal, Bush's National Security Adviser Stephen Hadley, a true hawk when it comes to Israel, simply stated that Israel would have to "choke down" the deal, meaning they had no choice but accept it.

The reason for this major shift in AIPAC and others is partly what one Israeli journalist called "Netanyahu's World Jewry Dilemma."

My heart goes out to Mark Halperin of New York, Brigitte Cohen of Marseilles and Frank Lipschitz of Berlin (all the names are fictional). The three, like other activists in their Jewish communities, are enthusiastic Israel supporters. All three believe that the two-state solution is the sole key to ensuring the Jewish and democratic nature of the State of Israel. What are they telling their congressman, the students in their class or the neighbor across the way when asked these days where Israel’s government is heading?

His answer is that:

There are few things that world Jewry despises more than the dilemma of loyalty to two homelands. Behind the thousands of enthusiastic activists who greet Israeli leaders at Jewish conferences hides a growing Jewish majority that prefers to stay home. When Israel’s interests contradict the essential interests of their countries of residence, and don’t fit in with their values, it gets harder and harder for Halperin, Cohen and Lipschitz to act according to the principle that has for years guided world Jewry: Right or wrong, we are always on Israel’s side.[my emphasis]

Why the Jews in Diaspora are upset with Netanyahu's foot dragging?

The answer is that they are aware that Netanyahu's actions are preventing a Two-State solution and they dislike what a de facto One-State solution would do to Israel and to Israeli society.

Let me explain what I mean in the second part of this post.

Municipal Elections in Turkey and the Future

I have been following the Turkish elections with renewed attention. Although they were for local administrations and municipalities, the recent corruption leaks about PM Erdogan turned them into a referendum of sorts.

They also showed Erdogan's unmatched political skills.

Remember how Karl Rove took a draft-dodger from an upper crust East Coast dynasty and turned him into a good-ol' boy from Texas with working class roots and tastes (and his war hero opponent into an effete Boston Brahmin)?

Well, Erdogan would have made him proud with these elections in Turkey.

When it became evident that he and his family were involved in a massive corruption scandal, just like Rove, he went into offensive and started accusing "the parallel structure" (referring to the Gulen movement) of plotting against him and his followers. He hijacked the agenda and effectively put the opposition on the defensive. They could barely catch up with him. Every day he fed the news cycle with new accusations and bombarded them with sound bites.

When Gulen movement responded with new embarrassing leaks, he countered by banning their rebroadcast and discussion in traditional media. Eventually, he even shut down Twitter and YouTube to ensure that only the technically savvy people (those using VPNs) could access the damaging material. There were many such people on the opposition side but very few within the AKP's constituency. And that was the point.

In short, he successfully prevented a wider discussion of the corruption allegations: his supporters heard too little to feel ambivalent about him and his opponents could find no stable medium or convincing message to challenge him. When they tried, the AKP pundits shut them up with glee. It was like Rove making Bush's dismal service record disappear and keep the narrative on the superficiality of John Kerry's war wounds.

When he won 43-44 percent of the votes, his opponents were so disheartened that the only thing they could do was to lash out at the lemmings-like tendencies of the electorate.

I think that is a facile and somewhat elitist verdict.

Let me first explain why the AKP was victorious despite these serious allegations. I will then try to outline a likely roadmap for the rest of the year.

The AKP: A Unique Political Profile

The AKP is an interesting coalition which defies easy categorization, especially if you use some kind of Western political party affiliation framework.

The party has an Islamist constituency at its core but that core is far from being monolithic. There are moderate Islamists that you could compare to the supporters of Christian Democratic parties of Western Europe. There are also religious nationalists who hold their Turkish identity as dear as their Muslim identity (and that is something quite unique in the Islamic world). There are pious people who believe in the primacy of charitable works and who suspect that capitalism may be corrupting the souls of Muslims. If you have to, you could liken them to Social Catholics. There are regular corporate conservatives who give priority to deregulation and free markets. You know, your basic Mitt Romney folks without the Mormon outlook. And there are social conservatives who cherish a patriarchal society where everyone has a predetermined position within a traditional gender division of labor. A version of the Christian right in the US.

Erdogan's genius was to leverage these disparate forces to occupy the center left, the center and the center right of the political spectrum.

This is much harder than it sounds. In fact, the AKP might be the only conservative party in the world to initiate massive social assistance programs to help the poor and the marginal. Whereas most Western conservative parties currently try to cut down social assistance and feed the poor to the volcanoes, the AKP created massive domestic aid programs: there are close to 12 million people receiving social assistance in Turkey. And there were practically none before they came to power.

Besides social assistance, the party invested in hospitals, schools and universities. They improved municipal services wherever they came to power. More importantly, they made these services essentially free. They also reduced corruption for basic services to individuals and channeled the graft for large projects and permits to (Islamist) charitable works.

For instance, the Islamic precept to bury your dead before the next sunset, previously made the funeral procedures ripe for corruption. When the AKP took over local governments, they streamlined the process and eliminated bribes completely. Even now, they distribute basic staples like flour and dried legumes free of charge in many poor neighborhoods. Consequently, from the perspective of the poor and disaffected, they are directly responsible for a marked improvement in their standards of living and their daily life.

In that context, you could think of Erdogan as a right wing Chavez (but a much better operator than the late El Commandante).

At the same time, the party implemented large scale deregulation and privatization schemes and allowed private sector companies to take over many state-owned businesses like telecommunications. Under AKP rule, private sector prospered like never before. Besides dramatically expanding in the domestic market, Turkish companies became a major force in the Middle East, Russia and Southeast Asia.

Having covered the center-left and center-right economically, the AKP similarly positioned itself socially. On the one hand, it vigorously defended the yearning of its supporters to incorporate Islamic symbols and principles into daily life (the most prominent ones being lifting the headscarf ban and limiting the consumption of alcohol). And Erdogan used a rather polarizing discourse in the process. But his government never fully implemented concrete measures to enshrine these symbols into daily life. Headscarves came to be widely tolerated and there were some minor restrictions on alcohol consumption in public.

This way, for its supporters, the party became the guarantor of these symbols for as long as it was in power but it prevented the other side from claiming that they were turning Turkey into Saudi Arabia. It was a shrewd tactic.

However, there was one crucial problem with all that: this massive economic boom, which enabled Erdogan to maintain capitalist and social democratic policies simultaneously, was based on the twin pillars of construction and consumer spending. As we all know from the US experience (not to mention the GIIPS), such booms are bubbles waiting to burst.

When the economy began to slow down (just before the Occupy Istanbul incidents) Erdogan and his lieutenants quickly realized that they could no longer maintain their benevolence vis-a-vis the poor and their redistributive largess vis-a-vis the business classes.

At the time, I suggested that, at the heart of the Occupy Istanbul discontent was a conflict over the distribution of the existing pie and the only solution under the circumstances was to apply more authoritarian and polarizing approaches.

In that sense, it was an easy decision for Erdogan to go back to what Rove called 50-percent-plus-one strategy. Since then, he has been in every city in the country decrying the effete West Coast liberal and claiming to be the hero of the heartland. And after the corruption allegations, he also took over the mantle of martyrdom. As you might remember from US political scene, nothing is more effective than playing the victim card in limiting the discursive options of your opponents.

Not surprisingly, his message resonates with the poor masses who instinctively dislike those godless liberals and who credit him for the undeniable improvements in their daily lives.

But in the process, he made a fatal mistake: He listened to the advise of his spy chief, Hakan Fidan and, instead of trying to solve the Kurdish problem, as he should have, he exacerbated it by supplying arms to Jihadis in Syria and by harassing the PKK's Syrian offshoot, the PYD.

That turned the Syrian conflict into a long and protracted civil war with no clear winners and made the Kurdish issue much harder to solve.

More importantly, it really upset the Obama administration.

What Will Happen Next?

Erdogan has two elections ahead of him.

The first one is the presidential elections in August as the President will be elected by popular vote for the first time in the history of the Republic. The other is the general elections that will take place sometimes in mid-2015. The AKP's bylaws do not allow their members to stand elections for the same position for more than three times and the 2015 elections will be Erdogan's fourth as an MP (and Prime Minister as well).

For that reason, he expressed his desire to become President. It was assumed that the incumbent Abdullah Gul might withdraw from the race in Erdogan's favor. But right now, this does not look like a done deal.

As I outlined before, Gul has been rebranding himself and might have different plans about the Presidency. But a lot of those plans depend on what Erdogan will do next.

Erdogan has two options.

Option 1: Stay the Course and Pursue Domestic Polarization and Regional Isolation

Erdogan might persist with his defiant attitude and might try to control events through heavy-handed and authoritarian policies. This includes the intransigent Syria policy and its Kurdish component, the purge of state apparatus of Gulen sympathizers and the disastrous foreign policy in the Middle East.

Most Turkish pundits think this is the most likely choice.

If that happens, I predict that, electoral successes notwithstanding, he will be forced to retire from politics in the foreseeable future.

Under that scenario, one of the first things that will happen is a massive capital exodus. Turkey has a significantly large current account deficit and is very vulnerable to such a move. Erdogan does not have many alternatives to fix that problem. His volatile and incompetent foreign policy in the last couple of years alienated the Saudis and the Gulf countries. So, he cannot not expect any influx of capital from them. Western hedge funds and institutional investors stay away from Turkey because of the instability caused by Erdogan's polarizing rhetoric and authoritarian policies. Russia might have helped, as it did in the past, but because of the Crimean crisis, Putin is in an economic bind himself and cannot afford such gestures.

In short, under that scenario, I expect a very severe economic crisis.

There is very little doubt that if the economy takes a nosedive, his support will quickly vanish. For instance, in 2009, right after the 2008 crisis, when the economy slowed down, the 47 percent the AKP received in the 2007 elections was reduced to 38 percent according to contemporary opinion polls. And if the crisis continued, the AKP would have shrunk to its core Islamist constituency, which is estimated to be around 20 to 25 percent (including the ultra-conservative Muslims of the Felicity Party and the Gulenist).

If and when that happens, the AKP coalition will unravel and a serious intra-party power struggle will ensue.

Secondly, most observers believe that there are a lot more damaging recordings that were not made public before the elections. If Erdogan maintains his current course of action, these tapes are likely to become public in dizzying succession. Sooner or later, the allegations will start creating doubts in the mind of his supporters. Especially, if they take place in an adverse economic climate.

Some observers assume that he can actually manage additional allegations as he now controls most media outlets, the judiciary and the police. But there is one component of the graft scandal over which he has no say.

The $4.5 million found in shoe boxes on December 17 belonged to the CEO of a state controlled bank called Halkbank. Halkbank was involved in a gold-for-gas scheme with Iran to circumvent US imposed sanctions. They used an Azeri-Iranian businessman by the name of Reza Zarrab (who was naturalized under the name of Riza Sarraf). It is alleged that Zarrab moved over $13 billion in gold through individuals to ensure compliance with the sanctions. The setup was pretty complicated:

A system was hatched to bypass SWIFT queries by setting up front companies in China. Then, money was transferred from Iran with falsified documents to bank accounts opened in the names of those companies in the guise of reimbursements for imports from China. The money was immediately transferred to the accounts of real or front companies in Turkey as payment for exports, and used to purchase gold. The gold was then sent via couriers to Iran, or to Dubai to be forwarded to Iran.

So far so good.

Right after the raids in Turkey, in late December, President Rouhani ordered that the investigation of former Vice-President and top Ahmadinejad aid Reza Rahimi be fast-tracked. Reza Rahimi has shady dealings with Iranian tycoon Babak Zanjani.

Zanjani’s name also emerged in Turkey’s graft probe as the alleged partner of Iranian-origin Iran in exchange for money via state-run Halkbank.
businessman and gold dealer Reza Zarrab, the key suspect in the case, who is accused of illegal transfers of gold to

 The Turkish connection is the most sensitive part of the investigation for Erdogan:

The English-language Turkish Daily News quoted an Iranian parliamentarian as saying that an Iranian judicial team would travel to Turkey to try to uncover secret assets of Zanjani and his alleged business partner, Reza Zarrab, who is a suspect in a high-level graft probe in Turkey.

This is critically important for Rouhani. Ahmadinejad had appointed the head of the Islamic Revolutionary Guards (known as Sepāh-e Pāsdārān-e Enqelāb-e Eslāmi or Sepah for short) Brig-Gen Rostam Ghasemi as the oil minister. The alleged corruption would weaken both Sepah and Ahmadinejad. And the
conservative Mullahs who supported them.

Which means that Rouhani is unlikely to give this up. In the Rouhani-Ahmadinejad power struggle, Zanjani could make a deal to avoid prosecution and provide damning evidence against Zarrab. And by extension senior AKP politicians.

That is not something Erdogan can control.

For these reasons, I suspect that we will witness a major shift in attitude and policy.

Option 2: Adopt a Conciliatory Foreign Policy Along While Maintaining the Authoritarian Domestic Approach

That major policy shift I find likely will be in the foreign policy area.

Erdogan and his top aid know that they can no longer continue to help the Jihadis in Syria. Besides alienating the US, they are beginning to realize that these hardened radicals are not easy to control and they might create all sorts of problems in Turkey.

Erdogan also needs Kurdish votes if he stands for election for the position of President. Without their support, the opposition parties could easily get a single candidate elected to the Presidency. Even if Erdogan decides not to run for president, he still needs Kurdish votes to shore up his waning support.

All of these variables mean that Erdogan and his team will have to start dealing with the PKK and its jailed leader Abdullah Ocalan.

In the coming months, I expect Erdogan to relaunch the peace initiative with Ocalan and perhaps even provide some indirect support to PYD in Syria (depending on the evolution of the talks).

This could dramatically alter the course of the war of attrition in Syria. As I claimed from the beginning, Kurds are the key to the Syrian conflict.

The second olive branch will be towards Iran. There are already burgeoning efforts in that respect and Erdogan himself visited Tehran in January. He rightly fears the Reza Zarrab investigation could engulf his administration and he will try to find a way to placate Rouhani. He does not have many carrots he can offer him but he has no other options. Rouhani, for his part, is happy to be the rising star in the region and he just announced that he will be visiting Turkey shortly.

The third (and not as certain) component of a conciliatory foreign policy would be to start normalizing relations with Israel. Although I maintained that the initial kerfuffle was a kabuki theater, in the last year or so, Erdogan seems to have gone off the deep end. His top aids are likely to try to pull him back. Such a move would ease the US anger, might bolster investor confidence and might even help Turkey reclaim the "honest broker" role it once tried to play n regional politics.

Finally, Turkey might try to persuade Saudi Arabia to give up its policy to undermine Iran and its slow burning feud with Qatar. It is about the only country in the region with sufficient economic power and military might to convince the Saudis that they cannot achieve their goals with their current policies.

If these measures work, Turkey might regain some of its regional stature and might find its economic footing to avert the looming economic and social disaster.

In short, I expect a very busy diplomatic season for FM Davutoglu and probably for Erdogan himself.

As for the domestic scene, some observers said that Erdogan might surprise everyone by adopting a unifying rhetoric and more liberal attitude.

Personally, I don't see him taking this possibility too seriously. In the upcoming period of economic and social turmoil, a liberal approach would not help him much. It would not appease his opponents and it would not please his supporters.

My take is that he will maintain his strident rhetoric and attacks on the opposition, he will continue the purge of Gulen supporters in the judiciary and the security apparatus and he will try to control social media as much as he can.

In the process, he will have to deal with corruption allegations, as more direct and convincing evidences of corruption will surface in the coming months. He will either have to try to block their investigation or let friendly prosecutors perform a perfunctory inquest.

This brings me to the question whether he will try to become President or change his party's bylaws to remain Prime Minister.

If my predictions are valid, Erdogan will need a lot of administrative and political leverage to perform these tasks. The President of the Republic is more than a symbolic figurehead but his powers are dwarfed by the powers of the Prime Minister. After all, it is a Cabinet-centric parliamentary system. Erdogan would be better off if he stayed Prime Minister.

This has two additional advantages for him.

One, he would not have to ask his former fellow Islamist warrior Abdullah Gul to give up his own candidacy. Gul relishes his role as President of the Republic and he is a lot more popular among the opposition than Erdogan and his top lieutenants. There is also the possibility of Gul refusing to step down and to become Erdogan's rival for the presidency.

Secondly, partly as a result of Erdogan's polarizing rhetoric, the opposition hates him with such passion that they might simply unify behind a single candidate and defeat him for the presidential elections. This is a much more likely outcome than it was six months ago. It is hard to predict whether the opposition could stay unified long enough but after the defeat in recent local elections they might have no other option if they want to get rid of Erdogan.

If he loses the presidential elections, it would be a lot harder for him to change the bylaws of his party to stand for the general elections in 2015. He would look desperate and petty.

For all these reasons, I think Erdogan will simply ask his party's general congress to change the bylaws to become a candidate for the fourth time. He will pretend that he detests such overtures but he will eventually let them convince him that he cannot abandon the country at such a critical juncture.

Especially, he will add, when the opposition is so obviously incapable of handling these problems. And reluctantly, he will accept the party's invitation to stand for more terms as Prime Minister.

Some people suspect that he might call early elections to combine them with the presidential ballot. I am not convinced. But if does that this would be another indication that he is eyeing his current post rather than the presidency.