Turkey's coup trial tests the rule of law



It wasn't long ago when the mention of Turkey's derin devlet, the deep state, brought blank stares and uncomfortable silence. Today, not only is this shadowy locus of power being discussed, it is going on trial.

An Ankara court yesterday began hearing the case of General Kenan Evren, a former president and the engineer of the 1980 military coup, in which dozens of people were executed, 650,000 were detained (according to official statistics) and hundreds more "disappeared".

Gen Evren's trial will test the judicial system's ability to cut through the murk of allegations and counter-allegations. More importantly, it will be a bellwether of how this government deals with the military that it so recently dislodged from political dominance.

Prime Minister Recep Tayyip Erdogan, speaking to his Justice and Development Party (AKP) this week, said the country's history of coups and an overweening military had always harmed the "legitimate" government. Defenders of Turkey's Kemalist principles contend that the military takeovers were necessary to remove governments that had violated the country's secular foundations; until recently, Gen Evren and his co-defendant had immunity from prosecution.

The Islamist-leaning civilian government clearly has the upper hand these days. But these questions are integral to the health of the body politic. Two more cases of deep-state intrigue, "Ergenekon" and "Sledgehammer", deal with alleged assassination plots against leading AKP figures.

Whether justice has a chance of prevailing in any of these trials is questionable. Hundreds of people - military officers and opposition figures, but journalists and activists as well - are still being held on politically related charges. The AKP's critics contend that these suspects are arrested first, and the evidence found later.

For all of the popularity of Mr Erdogan and his party, there are fears that the prime minister has now become an authoritarian threat. Critics, at least those who are not in jail, claim that the deep state prosecutions are a witch hunt, and opaque investigations feed those fears.

The trial of General Evren, a symbol of the old guard, may bring justice to 1980's victims, but it won't transform Turkey. Reform of the coup-era constitution, and enshrining a new civilian-military balance, will be necessary. But the fairness and transparency of these trials will signal whether AKP is the right party to shepherd that change.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Europe’s rearming plan
  • Suspend strict budget rules to allow member countries to step up defence spending
  • Create new "instrument" providing €150 billion of loans to member countries for defence investment
  • Use the existing EU budget to direct more funds towards defence-related investment
  • Engage the bloc's European Investment Bank to drop limits on lending to defence firms
  • Create a savings and investments union to help companies access capital
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1. Mathieu van der Poel (NED) Alpecin-Fenix - 3:45:47

2. David Dekker (NED) Jumbo-Visma - same time

3. Michael Morkov (DEN) Deceuninck-QuickStep   

4. Emils Liepins (LAT) Trek-Segafredo

5. Elia Viviani (ITA) Cofidis

6. Tadej Pogacar (SLO UAE Team Emirates

7. Anthony Roux (FRA) Groupama-FDJ

8. Chris Harper (AUS) Jumbo-Visma - 0:00:03

9. Joao Almeida (POR) Deceuninck-QuickStep         

10. Fausto Masnada (ITA) Deceuninck-QuickStep