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.

Arunachalam Muruganantham Is My Hero

And he should be yours too.

Aruna who, you might ask.

The short answer is, he is one of the most amazing human beings of our time.

Bar none.

The long answer is like this.

Muruganantham is an Indian man who lives with his widowed mother and his beloved wife Shanthi. His remarkable story begins when one day he notices his wife trying to hide some dirty rags from him. He asks her what they are and she reluctantly confesses that they are bits of fabric she uses as sanitary pad.

"I will be honest," says Muruganantham. "I would not even use it to clean my scooter." When he asked her why she didn't use sanitary pads, she pointed out that if she bought them for the women in the family, she wouldn't be able to afford to buy milk or run the household.

As her Prince Valiant,  he goes out and buys her some pads, only to realize how exorbitantly priced these were. A bulb goes up above his head, cartoon-style, and he decides that he can do better than the commercial pads.

He does a little checking up and discovers that only 12 percent of Indian women use sanitary pads and in rural areas they use all kinds of unhygienic substitutes like sand, sawdust, leaves and ash.

So, he creates a cotton pad and gives it to Shanthi for a test ride.

She said he'd have to wait for some time - only then did he realise that periods were monthly. "I can't wait a month for each feedback, it'll take two decades!"

Being a forceful person, he asks around. Everyone, including his sisters, refuses.

Undeterred, he goes to the nearby medical college and asks some female students to test his designs. If you know a little bit about India (or the subcontinent in general) you will appreciate how audacious a scheme this is. It simply is not done. Yet, miraculously, he convinces 20 students to try his designs out.

Muruganantham, the barely educated school drop out, designs a questionnaire for his volunteers to collect their feedback to improve his designs. But one day, he discovers that these medical students simply asked a couple of their colleagues to fill out his questionnaire and realizes that the data he has been collecting was useless.

What would you do if you were in his shoes?

I know I would have quit.

Not Muruganantham.

It was then that he decided to test the products on himself. "I became the man who wore a sanitary pad," he says. 

He created a "uterus" from a football bladder by punching a couple of holes in it, and filling it with goat's blood. A former classmate, a butcher, would ring his bicycle bell outside the house whenever he was going to kill a goat. Muruganantham would collect the blood and mix in an additive he got from another friend at a blood bank to prevent it clotting too quickly - but it didn't stop the smell.

He walked, cycled and ran with the football bladder under his traditional clothes, constantly pumping blood out to test his sanitary pad's absorption rates.

Think about this for a minute. Picture his daily routine in your mind. And imagine how it would look in a traditional setting like his village.

Not unexpectedly, everyone assumes that he has lost his mind. In fact, the whispering, daily avoidance and rumors get so bad that, the woman for whom he started this crazy effort, his wife, decides to leave him. Perhaps understandably, the terrifying ostracism of the villagers becomes just too much for her.

Muruganantham accepts the hand that was dealt to him with equanimity. As he has not much to lose at that point, he decides to press on.

His next insight is to examine the existing pads to determine why they are more absorbent than his cotton designs. But that is not easy to ascertain.

This idea posed an even greater risk in such a superstitious community. "Even if I ask for a hair from a lady, she would suspect I am doing some black magic on her to mesmerise her," he says.

Once again, he convinces his medical students to let him examine their pads. But he runs into another big problem.

 He laid his haul out in the back yard to study, only for his mother to stumble across the grisly scene one afternoon. It was the final straw. She cried, put her sari on the ground, put her belongings into it, and left. 

First his wife, now his mother. That's it, right? Well, not quite.There was more in store for him.

The villagers became convinced he was possessed by evil spirits, and were about to chain him upside down to a tree to be "healed" by the local soothsayer. He only narrowly avoided this treatment by agreeing to leave the village. It was a terrible price to pay. "My wife gone, my mum gone, ostracised by my village" he says. "I was left all alone in life."

What would you have done if you were in his shoes?

I know I would have quit.

Not Muruganantham.

By then he figures out that his cotton pads are not as absorbent as the commercial stuff. There is something missing and he is unable to find what that is. He decides -against all odds- to ask those big multinationals, like P&G, what is different about their designs. As he puts it:

"It's like knocking on the door of Coke and saying, 'Can I ask you how your cola is manufactured?' 

Muruganantham wrote to the big manufacturing companies with the help of a college professor, whom he repaid by doing domestic work - he didn't speak much English at the time. He also spent almost 7,000 rupees (£70) on telephone calls - money he didn't have.

He tells them that he is a mill owner who needs to test their products. They send hims some samples and he realizes that the missing ingredient is cellulose. That is essentially tree bark and requires expensive machinery to break down.

End of the road, right?

I know I would have quit.

Not Muruganantham.

He decides that he can design a machine that can break down the cellulose and create a sanitary pad.

He gets to work.

Four-and-a-half years later, he succeeded in creating a low-cost method for the production of sanitary towels. The process involves four simple steps. First, a machine similar to a kitchen grinder breaks down the hard cellulose into fluffy material, which is packed into rectangular cakes with another machine. 

The cakes are then wrapped in non-woven cloth and disinfected in an ultraviolet treatment unit. The whole process can be learned in an hour.

The machine is simple and skeletal. His design goal is to make it easy for rural women to use, maintain and fix.

He takes it to Indian Institute of Technology (IIT). They like it so much that, unbeknownst to him, they enter his creation to a national innovation award. Out of 943 entries, his design wins and the President of India is there to give him the prize.

Suddenly he was in the limelight

"It was instant glory, media flashing in my face, everything" he says. "The irony is, after five-and-a-half years I get a call on my mobile - the voice huskily says: Remember me? 

It was his wife, Shanthi.

The happy ending is all around as his mother came back too and his villagers acknowledged that he was not a crazy person possessed by evil spirits.

What would you have done at that point if you were in his shoes?

I know I would have tried to make a few bucks after such an arduous journey.

Not Muruganantham.

"Imagine, I got patent rights to the only machine in the world to make low-cost sanitary napkins - a hot-cake product," he says. "Anyone with an MBA would immediately accumulate the maximum money. But I did not want to. Why? Because from childhood I know no human being died because of poverty - everything happens because of ignorance."

His business model is to get women to work the machines, to create the product and to sell it to other women in the village. He wants them empowered and employed instead of Muruganantham living in a hideous 27-storey high-rise overlooking Mumbai slums.

Most of Muruganantham's clients are NGOs and women's self-help groups. A manual machine costs around 75,000 Indian rupees (£723) - a semi-automated machine costs more. Each machine converts 3,000 women to pad usage, and provides employment for 10. They can produce 200-250 pads a day which sell for an average of about 2.5 rupees (£0.025) each. 

Women choose their own brand-name for their range of sanitary pads, so there is no over-arching brand - it is "by the women, for the women, and to the women".

In an age where every Silicon Valley whiz-kid, who comes up with an extraordinarily brilliant iOS or Android app like getting you to rent your bathroom to drunken strangers during some Mardi Gras-type events, believes that they deserve to be a billionaire and to become an icon, Arunachalam Muruganantham is more than a breath of fresh air.

Muruganantham now lives with his family in a modest apartment. He owns a jeep, "a rugged car that will take me to hillsides, jungles, forest", but has no desire to accumulate possessions. "I have accumulated no money but I accumulate a lot of happiness," he says. "If you get rich, you have an apartment with an extra bedroom - and then you die."

This is a man who nearly lost everything in life in pursuit of a solution for billions of poor and rural women. And he never thought that he should be handsomely compensated for his travails. He still travels long distances to install his machines and to train rural women to use it.

But perhaps more importantly than that, you know what is is his proudest achievement?

He was once asked whether receiving the award from the Indian president was the happiest moment of his life. He said no - his proudest moment came after he installed a machine in a remote village in Uttarakhand, in the foothills of the Himalayas, where for many generations nobody had earned enough to allow children to go to school. 

A year later, he received a call from a woman in the village to say that her daughter had started school. "Where Nehru failed," he says, "one machine succeeded."

Let me repeat once again: Her daughter was the first child to attend school from that village thanks to his machine and his business model.

This is why he is my hero.

Next time some wild-eyed twenty-something lectures you about the importance of protecting and valuing Intellectual Property (IP), lest we forgo important innovation, simply ask him if he knows the story of Arunachalam Muruganantham.

What's Next in Turkey?

In late December, I posed this fateful question regarding the embattled Turkish Prime Minister: "is this the end for Erdogan?" At the time, I predicted that damaging information about Erdogan and his family members will almost certainly be leaked before the municipal elections in March 2014.

And I suggested that while Abdullah Gul (the President) would be on the rise (along with Deputy PM Ali Babacan), Erdogan would find it very hard to cling on to power and he might be forced to quit sometime this year.

In fact, it is widely rumored in Turkey that more dossiers are being readied and some of them will implicate Erdogan and his family members. One of the ministers who had to resigned openly called for the PM's resignation and said that all of the large construction projects were approved personally by the PM.

As you know, this has now happened.

Last week, an audio tape containing five separate conversations between the PM and his son hit the Internet. (An English language transcript can be found here.) During these conversations, you hear Erdogan instruct his son to give large piles of cash to several business associates for safekeeping. At some point, the son hesitantly tells his father that he almost got rid of everything and there is only 30 millions euros left to move. Only.

A second tape was leaked a couple of days later, in which Erdogan's son informs him of a businessman's offer to pay them only $10 million, a sum apparently much less than what was agreed upon, and Erdogan tells him not to accept the lesser figure.

I am not a moralist and by itself, a garden variety (albeit involving massive sums) grifter story would not be of interest to me. But this case is relevant because it contains telling clues about a coherent plan to unseat Erdogan.

The Original Scandal

The details are here.

I only want to make the following point: It is nearly impossible to conduct an investigation for two years involving senior members of the Cabinet without any leaks. This could only be done if the investigators were members of a tight group, none of whom interested in career rewards that some judicious whistleblowing might bring.

As I wrote at the time, this is why I rejected corruption vs a plot against the government dichotomy: it was both.

In other words, the corruption allegations were correct but the agents who brought them forward were doing it to unseat Erdogan.

Give Him Enough Rope

The aftermath of the initial blow was intriguing. Apart from giving his first ever interview to a foreign journalist, and denying the accusations, Gulen remained silent for the most part. He let Erdogan to be the sole actor on stage.

This calculation paid off nicely. Erdogan's huge overreaction and the autocratic steps he has taken were much more damaging that anything Gulen or his supporters might have said.

He started with a massive purge in the executive branch and dismissed or moved thousands of police officers and state prosecutors. Even to those who knew that Gulen supporters were occupying key positions in state institutions, this undertaking looked more like a cover up than a genuine desire to reform the system.

Erdogan then proceeded with several highly questionable laws. One scrapped the independence of the judiciary and attached the body that appoints judges and prosecutors to the Ministry of Justice. Another law strengthened government control over the Internet and social media by requiring all ISPs to maintain logs for two years and make them available to the authorities. It also allowed the blocking of Websites without court ruling.  

Finally, because Erdogan firmly believes that the only state apparatus uninfected by the Gulen virus is the Turkish Intelligence Agency (MIT), he pushed a law that removed all Parliamentary oversight of MIT's activities. The law also provides the Agency with much wider eavesdropping powers, including unfettered access to corporate IT systems. It accords immunity to its officers (and collaborators) and makes it a crime to report or leak its activities.

The overreaction and overreach was simply mindboggling.

Predictably, President Gul, a presumed sympathizer of the Gulen movement, signed these texts into law. Since he has no real veto power (he can only send them back for review and has to sign them the second time) he used these opportunities to raise his concerns. Once again, Gul was positioning himself as the statesman, while emphasizing Erdogan's dictatorial choices.

Once it looked like Erdogan won the power struggle and he was feeling invincible, those infamous recordings showed up on YouTube.

Are the Recordings Genuine?

Erdogan's predictable reaction to these serious allegations was vociferous indignation over what he claimed to be doctored tapes.

As you can imagine, I have no way of knowing one way or the other. But I can suggest a couple of pointers.

If these were collages, i.e., dialogues created with separate words taken from different speeches, it would be impossible to end up with a convincing exchange since the human ear is very sensitive to pitch changes such a method would necessarily entail.

It is also not possible to have impersonators to produce such recordings since every voice has a unique frequency imprint and it would be very easy to verify the authenticity of the speakers.

On the other hand, you could slightly edit actual conversations and rearrange some sentences in those conversations to create a much clearer causality. Here is a discussion of these points in English and here is the original research in Turkish.

If I were to venture a guess, I would opt, like I did previously, for both. That is to say, I believe that it is highly likely that the gist of the conversations is accurate but some editing might have taken place to sharpen their direction and content.

Who Could Eavesdrop on Encrypted Phones?

The day after the tapes hit YouTube, Erdogan inadvertently blurted out that "they are listening to government's encrypted phones."

In the tapes, you hear his son mentioning a secret number and Erdogan talks about encrypted phones, so we can safely presume that these conversations took place on a secure line using encrypted phones, like the one you see on the right.

The question is this: Assuming, as I do, that the bulk of the conversations is authentic (even if edited), how did they eavesdrop on encrypted phones? People who simply maintain that the Gulen supporters might have done it are missing an important point.

Unless you are the NSA, the only way you can listen in on these conversation is to get hold of the encryption key. In Turkey, encrypted phones sold to private citizens can be monitored with a court order as their encryption keys have to be made available to the Information and Communication Technologies Authority (BTK).

But the encrypted phones used by ministers are exempted from this practice and they use 256-bit AES (Advanced Encryption Standard), which is impossible to crack through blunt computing force.

In short, unless you have backdoor access or have the actual encryption key, there is no way you can monitor such conversations. That leaves two institutions, one is the NSA, the other is MIT. While I am sure the NSA listens in on all world leaders, I seriously doubt that they would willingly leak anything.

That leaves MIT, the executive branch institution most trusted by the Prime Minister.

Will People Care?

In Turkey, bribe accepting politicians are the equivalent of cheating presidents in France: they are part of a natural order of things. And indeed, opinion polls show that there is barely a move in Erdogan's popularity.

But this could change rapidly.

Let's look at this logically: If there was a plan to unseat Erdogan what do you think the next steps would be?

If I were implementing such a plan, I would continue what I have been doing, that is to say, leak allegations, give him space for his shadow boxing, let him deny the whole thing aggressively. And when he starts to feel like he is gaining the upper hand, hit him with video recordings of these alleged incidents. Does it not make sense?

Even Erdogan's staunchest supporters would desert him if they saw his family stuffing money bags into the trunk of several S-Class sedans.

I actually don't know if they have the appropriate visuals for these events but if something like that shows up on the Internet in the coming days, you can bet your last Lira that this whole things was a plan to get rid of Erdogan.

Why and Who?

The "why" is fairly easy.

In the last year, Erdogan made huge blunders in the region. He sided with Jihadis in Syria just to gain leverage against Kurds, he failed to start a peace process with Turkey's Kurds. He alienated all the Sunni powers in the region, like Saudi Arabia and Egypt (there is no Turkish diplomatic representation in Egypt and the last ambassador was declared persona non grata). And he stood by as Iran rose to prominence and Turkey lost most of its leverage.

In short, he disappointed his most important ally in a big way.

Domestically, since May, Turkish economy is in a free fall. The lira is down, the current account deficit is huge, unemployment is high and there is a net capital outflow. Not surprisingly, Middle East funds are now shunning Turkey.

I will let you guess the "who" using my black hole analogy.

What's Next?

I stand by my prediction in December.

What they want -let's call them the markets- is for Erdogan to leave and Ali Babacan to replace him as the Prime Minister. In that post, I also emphasized Abdullah Gul's impressive re-branding and his bright future.

I still think that they would be the dream team, Gul, the newly branded centrist statesman as President and Babacan, the brilliant technocrat, as Prime Minister.

Incidentally, this is what the Economist said this week:

Still, the conventional wisdom is that, unless voters feel the economic pinch, few will be bothered by their rulers’ sleaze. Should this prove wrong (and several people now expect AK to lose Ankara), Mr Erdogan’s fellow AK party members may at last decide it is time to replace him. 

Mr Gul is still touted as one possible successor. Another is Ali Babacan, the deputy prime minister, who has a spotless reputation.

If that happens, that is, if Erdogan leaves, Gul remains President and Babacan becomes the Prime Minister, expect smooth sailing in the region.

The American plan will be back on track, peace with Kurds will have a genuine shot, the Syrian conflict will finally have a reasonable framework and the Saudi-Sunni silliness will be in check.

If Erdogan refuses to go, dark clouds will get darker for Turkey and the region.

The Significance of Google's "Do No Evil"

This summer, as a result of series of hard o duplicate coincidences, I found myself working as a consultant for a large company's rebranding efforts.

This is not my field of expertise but I know enough about the corporate world and I am a full-fledged contrarian. So I accepted the assignment. It turned out to be a fascinating exercise.

I explained to them that when you are a large company with many activity areas that touch upon people's daily lives, it is very important that they perceive you as a benevolent force. And for that to work, you need to be and to act like a benevolent giant.

I gave them Google as an example.

Google's informal motto is "Don't Be Evil" but it is generally rendered as "Do No Evil."

Why is that curt reassurance necessary?

Well, think about it.

Google knows everything about your digital footprint. You look for a plane ticket, the following day all the Web sites you visit contain airline commercials.

You check a site in Bahasa and if you refuse Google's helpful offer to translate it for you, an hour later you are served ads in that language. Gmail has your entire mail history, in searchable format and any key word in any message will trigger new ads for you.

Here is what a journalist found out when he researched how much Google knew about him.

Google Docs, Google Maps, Google Translate contain information about your activities, your location and your interests. Picasa has your pictures, Google Drive safeguards your valuable data. Blogger maintains your blogs, YouTube holds on to your video clips.

They introduced Google+ not as a competitor to FaceBook but as a unifying framework for all these services and data. You are a blogger, your Google+ identity ties you to your content and enlarges your readership. You are a small business owner, your presence in Google Maps is enhanced through Google Plus Local Business pages.

Your online searches, your presence and activities in Google+ Communities and your data in all Google services are solidified in one detailed, accurate and perfect identity. While Google+ features only 540 million users (FaceBook has 1.2 billion), it is growing faster than FaceBook or Twitter.

Actually, the comparison with FaceBook is silly. I have been avoiding FaceBook for years and I have suffered no loss. But it would be utterly impossible for me to function on the Internet if I were to try to avoid Google. They are ubiquitous and their services are very hard to ignore.

As a result, Google knows a lot about most of us.

But what makes Google different is the way they go about their business.

Those of you old enough might remember this: Microsoft almost gave away Word (and it had no copy protection) until they destroyed Word Perfect. Same thing with Excel and Lotus 123. Then they bundled these products into Office, they installed a very hard to break copy protection scheme and charged an exorbitant price for it. We all bought it and used it because, by then, we had no choice. But we resented every minute of it.

Google does not work that way. They are not into destroying other companies. Picasa is not there to kill off Flickr or Instagram. It is there to collect more of your data.

They also do not like to force you into things. If they wanted to, most of us would be obliged to sign up for Google+. Instead, they develop excellent services and give them to you for free to entice you to come in.

This is where "Do No Evil" slogan becomes important.

If I am aware of what Google does and if I have some freedom not to sign on this, that or the other Google services, I don't mind Google selling my information from the services I use. I would have minded it if it was Microsoft, Apple or Oracle collecting my data because rightly or wrongly, I perceive them as capable of doing evil.

I am quite aware that there are many people who do not share my vision of Google. But the reason I trust Google is the fact that they actually operate differently than most companies.

Or as I told my client, they practice what they preach. Without that unison, they could not maintain that brand image.

Let me give you an example.

There is a secret Google Lab called Google X. Their operating principle is rewarding failure. Yes, you read that correctly. It is not that they want you to fail all the time. They are simply aware that unless you remove failure from the equation, most people will not look into outrageous solutions.

You must reward people for failing, he says. If not, they won't take risks and make breakthroughs. If you don't reward failure, people will hang on to a doomed idea for fear of the consequences. That wastes time and saps an organisation's spirit. 

Can you say Microsoft?

The Lab has three simple operating principles.

One, you have to identify a problem to be solved. Even brilliant ideas are discarded if they do not address a specific problem.

Two, the solution should be so amazing and effective that, it it worked, it would eradicate that problem.

Three, "there has to be some reason to believe the science or technology underpinning that solution, that makes us think the idea is only mostly crazy."

As an example, he cites the problem of a million people dying on the roads each year. The science fiction solution it came up with was driverless cars that don't crash. Google has now clocked up hundreds of thousands of miles of testing that suggests this technology will work and could transform our world.  

Tellingly, unlike every other corporation operating in what we euphemistically call the free market, Google Lab projects never take into account whether their solution would make money. They believe that you need solid marketing if your solution is incrementally better. But if the solution you cam up with is exponentially better, "the money's going to come and find you in a fair and elegant way."

Crucially, the director of the Lab adds that this has always been Google's way of conducting business.

"Things like search or translate, things like maps, have been in the public domain free to the users but often without advertising or any form of compensation - sometimes for many years - when Google didn't make money on it or even have a plan to make money on it and Google was just 'Let's make value for the users. We'll figure out how to make money later'." 

One other thing.

Unlike every other company out there with an Alpha male at its helm running a tight and hierarchical ship, Google takes another approach to management.

Google managers need to keep their staff happy because, Mr Teller says, you don't need your manager's permission to leave a particular section if you believe they are behaving in an obnoxious manner. 

"Not only will you leave but everyone will leave and that guy is going to find himself voted off the island by his own people," he adds.

That's why I believe them when they tell me they won't be evil.  

Will Hillary Clinton Run in 2016?

It is an open secret that Hillary Clinton is the leading contender in the 2016 presidential race. In fact, she is the biggest Democratic front runner of all times.

According to Washington Post, she holds a 6 to 1 lead over other Democratic candidates. Joe Biden is second with 12 percent and Senator Elisabeth Warren is third with 8 percent.

Moreover, the largest Democratic Super PAC (Priorities USA Action) has just declared that it is regrouping to support Clinton's presidential ambition. They have a huge Rolodex and they can raise billions.

Besides this extremely favorable situation, she has another advantage: there is no clear front runner on the other side.

The Republican Great White Hope Chris Christie is embroiled in a slow burning scandal. With a leaked letter accusing him of having prior knowledge of the Fort Lee incident and many subpoenaed witnesses waiting to testify, this has all the makings of a prolonged investigation with many pitfalls along the way.

Tea Party candidate Paul Ryan fizzled out when Romney - Ryan ticket performed poorly and I doubt that this time around the mainstream media will give him the same benefit of the doubt that they were willing to extend to his math-defying, if not fraudulent budget proposals.

The Libertarian candidate, the junior senator from Kentucky Rand Paul is unlikely to go far in the GOP primaries. Marc Rubio in an unknown quantity for federal politics. And despite what McCain says, Bobby
Jindal will never, ever get the majority of GOP primary voters.

And there is also the consideration (rarely mentioned in these situations) that she is by far the most qualified candidate. When she ran against Obama, I was convinced that she would have made a much better president. For one thing, her Health Care Act would have been much more progressive than Obama's (can you say "single payer"?) and she would have been a much better negotiator than the President on contentious issues.

Perhaps more importantly, it would have been much more difficult for the National Security State folks to bamboozle her. She was in the White House before and she knows how the system works.

Obama was an easy prey for these guys and they quickly positioned themselves around the inexperienced President and impressed (and intimidate) him with one scary scenario after another. From Guantanamo to NSA, there is a whole list of terribly conservative policies Obama acquiesced to during his first term.

I seriously doubt that Clinton would have gone along with the same policies.

Therefore, when we ask the question, "will she run?", the obvious answer is, she would be a fool not to. Although a lot of things can change between now and the elections, right now, it looks like it would be impossible for her to lose.

There is, however, a reason for her not to run: to leave the door open for Chelsea.

It is not an outlandish idea. When asked whether he or Hillary would be a better president, Bill said:

"Day after tomorrow, my wife, because she's had more experience," Clinton told CNN's Piers Morgan when asked whether Hillary or Chelsea Clinton would be a better president. "Over the long run, Chelsea. She knows more than we do about everything."

There is more to it than a flippant answer. The Clintons have been carefully grooming her for higher office. She went to the right schools, married the right person, stayed away from any kind of embarrassing situations. It is almost as if all her major decisions were made with a future vetting in mind.

She is also much more media and image conscious than her feminist mother, who sometimes give in to her hippie roots, when it comes to her public appearances.

I think this would the only hesitation in her mind.

She knows she can win, she knows that she is more than qualified and would make a great president.

But she does not know whether her Presidency could prevent Chelsea from running for the same office down the line. Three Clintons in, say, 46 Presidents might be too much for the country.

I personally hope that she does not run and support Elisabeth Warren, as I think Warren is more progressive than Clinton at this point.

But human nature is what it is. Just the fact that Warren would be the next likely candidate (Biden can never get elected to anything outside Delaware) might push Clinton to go for it.

To become the first female President is not something that could be easily relinquished.

And I get that.

Turkey's Risky Strategy in the Syrian Conflct

Syria continues to take up world's attention with multinational talks in Geneva. The hostile and uncompromising tone that dominates the meetings clearly demonstrates the intractable nature of the problem.

This is hardly surprising, as after millions of Syrians were displaced and many thousands killed, and the unspeakable atrocities committed, it is unlikely that Syrians could find a way to see eye-to-eye, let alone negotiate the parameters to live in the same country.

Unfortunately, as I noted before, this is a feature and not a bug.

However, the disunity and discord are not just the result of a cynical Pipelinistan map redraw. They are also caused by the fact that Syria has become the fulcrum for too many competing scenarios: every time someone pushed in one direction, there are five or six pulling the other way.

Consequently, even the Pipelineistan blueprint has become much harder to implement.

Among all these competing actors, there is one that seems to follow a dangerously complex and risky road map and that is Turkey.

The problem with Turkey is that, despite a comfortable majority in Parliament, an ineffective opposition and a very large conservative constituency, the Prime Minister feels surrounded by enemies and acts accordingly. There are many reports that the only person he really trusts is the head of the Turkish Intelligence Agency MIT, a man by the name of Hakan Fidan.

As I recently reported, some of his actions are not exactly helping Erdogan. But the two seem to have formed an interesting alliance and their strategy looks like what-if-an-intelligence-agency-was-formulating-policy.

This is clearly visible in the Syrian conflict.

Turkey and Syrian Kurds

As I explained before, Turkey dropped its "zero problem with neighbors" policy and changed its stance towards Syria overnight. And Erdogan moved from being Assad's BFF to becoming his mortal enemy within the span of a week.

Since then, Turkey has been providing shelter to hundreds and thousands of Syrian refugees. It set up (with Qatari and Saudi funds) secret military bases for the Free Syrian Army (FSA). It trained FSA fighters and allowed for their free movement between Syria and Turkey. And, of course, it opened its border to shipment of arms and equipment.

Initially, the Turkish strategy was fairly straightforward: Help the rebels in anyway you can, work with Qatar and Saudis as the Sword of Sunni Islam and benefit from the largess of Sunni countries in the short run and position yourself as a critically important player (and a major energy hub) in the medium to long run.

If Syria was partitioned into three or four smaller states in the post-Assad era, one of those was inevitably going to be a Kurdish territory along the lines of Barzani's Kurdish Regional Government (KRG) in Northern Iraq. And Turkish government has privileged relations with that entity.

But there is a problem: the leading Kurdish group in Syria PYD (and the one likely to dominate an autonomous Syrian Kurdistan) is an offshoot of the PKK.

This means that Turkey's efforts to help overthrow Assad and create a (de facto or de jure) partitioned Syria will almost certainly lead to an autonomous Kurdish region controlled by the PKK and its imprisoned leader Ocalan.

Let me make a side point here:

Most observers believe that, Turkey is afraid to lose its Kurdish region to a new state of Kurdistan. I hold the contrarian view that they know that the rise of a Kurdistan is inevitable. What they want is to have a lot of influence in that new entity and perhaps envisage some sort of regional integration, modeled after their current arrangement in Northern Iraq. If that works out, instead of losing a chunk of their territory, Turkey could gain privileged access to a larger and potentially richer autonomous entity. What they fear is that, if they get the opportunity, Ocalan and the PKK might not allow Turkey'a tutelage over a newly formed Kurdistan.

Hence the serious misgivings of MIT.

As the PYD strengthened its leadership position in Syria (despite Barzani's military and financial support to other Syrian Kurdish groups), Erdogan and the MIT began to look for ways to weaken them. They arbitrarily closed border posts to stop Kurdish fighters retreat, regroup and go back fighting while allowing ISIS and Jabhat al Nusra fighters to go in and out freely.

The Kurds, who landed control of a string of towns and villages in northeast Syria after the men of Bashar Assad, the Syrian president, left voluntarily over a year ago, insist they are the victims of a proxy war that is being orchestrated by Turkey through its Syrian rebel protégés. These allegedly include foreign fighters from Jabhat al-Nusra and the Islamic State in Iraq and Syria (ISIS), the radical Islamist militias that have shot to global notoriety with their brutal ways. 

“The Turks have cleared mines, cut barbed wire fencing to let these armed gangs come through the Turkish border,” grumbles Saleh Muslim, the leader of the Democratic Unity Party (PYD), the Syrian Kurdish group that runs the de-facto autonomous Kurdish enclave. A Syrian rebel fighting the Kurds told our correspondent that “Allah be praised, Turkey is giving us some weapons” though he added that the France and Saudi Arabia were “much more generous”.

While the government insisted that Turkey was not providing arms to Jihadis, there were numerous reports to the contrary.

What the government, or should I say, MIT was hoping to achieve was some kind of temporary defeat for the PYD, so that they could pressure Ocalan to accept a peace agreement that favors Turkey and gives it more power and access to any future Kurdish entity.

Instead, Turkey found itself under immense pressure to drop its support for the Jihadis and they were forced to back off. As soon as they began to ease off arms shipment and logistic and training support, Syrian Kurds started to achieve impressive victories.

Which might have prompted Erdogan and the MIT to move that military support underground.

Last December, a convoy of large lorries were stopped by the Turkish military for containing arms and ammunition destined for Syrian Jihadis. Two agents belonging to the MIT were part of the convoy and they refused to allow the military to seize the trucks. Within hours Ankara intervened, the local governor was sacked and the convoy was allowed to move on.

Foreign Minister Davutoglu has since been maintaining that the convoy contained humanitarian aid to Turkmen groups inside Syria. But, understandably, not many people are buying that argument, especially since more such trucks have been observed.

What is interesting is that this foreign-policy-by-intelligence-organization has seriously backfired.

The overall result of their cynical ploy was the dangerous ascendancy of al Qaeda affiliated groups. These forces are now capable of acting like regular troops and they are invading regions and taking over cities. Moreover, they are extending their influence zone into neighboring countries.

Their impressive push into Ramadi and Falluja in Iraq must have been a wake up call. They are also active in Lebanon. And Jordan is clearly worried.

There are also allegations of al Qaeda bases inside Turkey, which are denied by the Minister of Foreign Affairs.

If this is not the proof of the failure of the government-by-intelligence-agency I don't know what is.

If I had a Person of the Year Award

My choice would not be the Pope.

He seems like a nice guy (though he should go easy about his PR goons who leak his every move to the media). But his organization has a bit too much to apologize for. And I didn't even linked to massive sexual abuse scandal in the previous century.

My person of the year would be Edward Snowden.

First, I am not sure that at his age I would leave a $200,000 job in Hawaii and get myself in the crosshairs of the largest intelligence organization in the world.

He did it.

People don't seem to understand how much courage and determination that takes.

Moreover, his goals were really outstanding. As he recently explained, he was not trying to change the world, he was just trying to let people decide whether they want the world changed.

I am pretty sure that at his age, I would have missed this nuance.

The only person I admired more was a former neighbor of mine.

His name was Wilhelm Pfeffer (or as I knew him Bill Pfeffer) and he was the right age to have been part of the WWII. Yet, no one knew his history. One day I asked him how it was and he told me rather matter-of-factly (just-because-you-asked-young-man) that as a young German at the tender age of 19, he decided that Hitler was an abomination. And he made the decision to move to France not to be part of his army of murderers, he said.

That is not all.

Once France was occupied, he moved with the French Resistance to Algeria but told them them he was a pacifist and would not fight and kill. He was a geologist and he offered to train French soldiers instead.

Think about that.

At 19 (a) he knew Hitler was an abomination (something that most West Europeans and North Americans did not get for a long time) (b) he accepted the consequences of leaving his country (c) he refused to become a killer for the other side just to be accepted.

That is the definition of courage to me.

I don't know anyone who could do these things at that age and especially at that time.

Perhaps more importantly, he never shared these details with friends and neighbors. He did the right thing and he did not even let others know he was on the side of the angels.

That is a mensch in my book.

He was my hero.

So, if I had a Person of the Year Award, it would be called Wilhelm Pfeffer Person of the Year Award.

And I would give it to Edward Snowden this year.

But I don't have such an award because I doubt that I will ever find another worthy recipient.