Turkey's prime minister, Recep Tayyip Erdogan, right, with the then chief of staff General Ilker Basbug at the mausoleum of Mustafa Kemal Ataturk, founder of modern Turkey, in Ankara in 2010. Adem Altan / AFP
Turkey's prime minister, Recep Tayyip Erdogan, right, with the then chief of staff General Ilker Basbug at the mausoleum of Mustafa Kemal Ataturk, founder of modern Turkey, in Ankara in 2010. Adem AltShow more

Verdict in Turkish in coup trial due on Monday



ISTANBUL // It is the culmination of one of the most controversial trials in recent Turkish history.

A top court is expected to hand down verdicts tomorrow against hundreds of military officers, politicians and academics accused of a far-reaching conspiracy to bring down the government.

General Ilker Basbug, a former chief of staff of the once all-powerful military, is among the almost 300 accused in the Ergenekon trial, held in a prison complex in Silivri, 40 kilometres west of Istanbul.

The trial, triggered by the discovery of an illegal weapons cache in Istanbul in 2007 and opened in 2008, has lasted about five years and has divided the country.

Some say Ergenekon has given civilian institutions the chance to tackle the so-called "deep state", a term that describes right-wing members of the security forces and the bureaucracy in a country that has had four civilian governments pushed from power by the military since 1960.

But others say a lack of evidence and long detention periods for the accused showed the trial was an effort by the religiously conservative government of the Justice and Development Party (AKP) of the prime minister, Recep Tayyip Erdogan, to silence critics.

Nationalist and secularist groups have called for protests outside the court tomorrow, and authorities have refused to allow access to members of the public.

Yesterday, police in Istanbul and Ankara searched offices of two groups that had called for protests and detained 20 people.

Aydin Engin, a veteran Turkish journalist who was prosecuted by the military after the coup of 1980, said the Ergenekon trial had been more than just a judicial procedure.

"This trial has been a reckoning between the AKP camp on one hand and the Kemalists on the other," Mr Engin said. Kemalists, who follow the strictly secularist ideology of Mustafa Kemal Ataturk, modern Turkey's founder, ruled the country for much of the time before the AKP came to power in 2002.

In charge sheets running into thousands of pages and drawing on the statements of unnamed informants, prosecutors have been arguing in 600 hearings of the trial that the 275 accused were members of a "terrorist organisation" with the aim to create chaos and topple Mr Erdogan.

Prosecutors said the Ergenekon group, named after the mythological home of the Turks in Central Asia, orchestrated the assassination of a senior judge in 2006 and planned attacks on representatives of Turkey's non-Muslim communities and of prominent liberals such as the Nobel laureate Orhan Pamuk.

They also said high-ranking officers of the armed forces made preparations for a coup against Mr Erdogan in 2004. Prosecutors called for life sentences for 64 of the accused.

In a separate trial last year, another court in Silivri sentenced 324 suspects, including three former military commanders, to prison terms of up to 20 years for using a war game titled "Sledgehammer" in 2003 to plot a coup against the government. That decision is being appealed.

In the Ergenekon trial, key accused have portrayed the prosecution's case as part of a "psychological exercise" to undermine public trust in the armed forces.

Gen Basbug told the court in June that military personnel had been "dragged to court with the help of baseless claims without concrete evidence".

The Erdogan government has come under pressure from Europe, especially because of detention periods of more than five years in some cases.

"Concerns persisted over the rights of the defence, lengthy pretrial detention and excessively long and catch-all indictments," the European Union said in a major report last year created to review Turkey as a candidate for membership.

There have also been worries about the detention of journalists in the Ergenekon case.

Mustafa Balbay, the former head of the Ankara bureau of Cumhuriyet, a staunchly secularist newspaper opposed to Mr Erdogan, has been in detention for more than four years under accusation of having been involved in coup plots.

Mr Engin said the Ergenekon trial had been important for Turkey despite its shortcomings.

"In the old days, reporters in Ankara used to joke that politicians formed the government but did not rule the country," he said. "There was a state within the state. Turkey needed this trial."

But other observers are not convinced. Murat Somer, a political scientist at Istanbul's Koc University, said autocratic tendencies were present in other parts of society as well. "Turkey seems to settle scores with people rather than authoritarianism itself," he said.

"Recent events have shown that elected governments can act oppressively as well," said Mr Somer, in reference to the government crackdown on widespread protests against Mr Erdogan in June.

"Turkey will not get true democracy unless people from all segments of society confront their own authoritarian and majoritarian beliefs."

* With additional reporting by Reuters

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.”

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