Supporters of Recep Tayyip Erdogan, Turkey’s president, wave Turkish national flags during a pro-government demonstration at Taksim Square in Istanbul, Turkey (Photographer: Danielle Villasana/Bloomberg)  

Erdogan Crackdown Has Turkey on Edge as Kurd Leaders Jailed

(Bloomberg) -- A Turkish court ordered the nation’s most prominent Kurdish lawmakers jailed, sharply escalating a crackdown by President Recep Tayyip Erdogan and sending markets tumbling over fears of renewed violence and a possible rupture with the West.

Selahattin Demirtas and Figen Yuksekdag, co-chairs of the Peoples’ Democratic Party, or HDP by its Turkish initials, were two of 11 members of parliament to be detained in overnight raids on Friday. Erdogan accuses the party of close links to separatist PKK rebels and in May, at the president’s request, parliament passed a law stripping HDP lawmakers of their immunity from prosecution, enabling them to be charged with terrorism-related offenses.

The sweep is part of an ever-widening purge of Erdogan’s opponents after a July 15 attempted coup. The government has sacked tens of thousands of civil servants for links to an Islamic movement led by U.S.-based cleric Fethullah Gulen, who the government says masterminded the failed putsch. But the crackdown soon extended beyond the Gulen network, as more than 100,000 people were fired from their jobs, suspended or detained in the months following the botched putsch, including prominent journalists, activists and academics with no known connection to Gulen’s group.

The latest round of arrests took place as investors and European diplomats are already wondering whether Turkey can still be considered a democracy. Kati Piri, the European Parliament’s Turkey rapporteur, recommended that the EU suspend membership talks with the government in Ankara, which she said is “clearly heading towards a dictatorship.” The 62-year-old Erdogan has ruled the nation since 2003 and is looking to further concentrate power with constitutional changes that would heighten the already considerable authority of his office.

Lira Plunges

“It will get worse and worse as democracy is faltering in that country,” said Cristian Maggio, head of emerging-market research at TD Securities in London. “Investors invest in authoritarian regimes that were already so, not the ones that U-turn on democracy and are so close to the West as Turkey.” The country is likely to become increasingly isolated from Europe and possibly the NATO Western military alliance as well, he said.

Turkey’s government says the HDP is merely a front for the PKK, or Kurdistan Workers’ Party. The group has been fighting for autonomy in Turkey’s southeast for decades, and has recently expanded its influence in neighboring Syria and Iraq. Erdogan has used that fact to justify military interventions in both countries, as well as repression at home. He’s doubled down on those policies since the failed coup, arguing that the attempt to topple him justifies a determined effort to root out enemies within.

Demirtas rejects the claim but has said that doesn’t mean he has to see the PKK -- classified by Turkey, the U.S. and EU as a terrorist organization -- in the same way Erdogan does.

The lira plunged by the most since the week following the coup attempt, dropping as much as 2 percent to a record 3.1728 per dollar at 5:50 p.m. in Istanbul. It also fell to a record against the euro. The Borsa Istanbul 100 Index declined for a fourth day, erasing 3.2 percent and extending the biggest loss among the world’s major indexes on Friday. The yield on the 10-year lira-denominated government bond jumped 19 basis points to 10.37 percent, the highest since May 23.

Turkey, once held up by U.S. officials as the Muslim world’s “model democracy,” has failed to fulfill that promise in recent years, with a slide on international indexes of democratic quality that coincided with Erdogan’s increased influence over everything from the judiciary to the legislature and education system.

It ranks 99th of 113 countries on the latest Rule of Law Index compiled by the Washington-based World Justice Project. It’s 151st of 180 countries on the Reporters Without Borders Press Freedom Index, placed between Tajikistan and the Democratic Republic of Congo.

Rights Lawyer

It didn’t take long for fears of more violence to materialize after the arrests of Kurds’ elected representatives. Over 100 people were wounded and eight were killed after a bomb-laden vehicle exploded in Diyarbakir, Turkey’s biggest Kurdish-majority city, shortly after the detentions on Friday, Prime Minster Binali Yildirim said. The HDP won more than 70 percent of the vote there in the last general election in November 2015.

Demirtas, a charismatic 43-year-old former human rights lawyer, looked until recently to be a rising political star in Turkey. He led a pro-Kurdish party to win seats in parliament for the first time, passing the threshold of 10 percent of the national vote. He also ran for president in 2014, broadening the party’s support from Kurds to liberals and secularists attracted by his progressive stance and promise to prevent Erdogan from transferring the seat of power from parliament to an enhanced executive presidency.

Any surge in violence following the detentions may help Erdogan rally the nationalist opposition party MHP behind his bid to secure executive powers, according to Nigel Rendell, a senior emerging-markets analyst at Medley Global Advisors LLC in London.

It’s “no coincidence that the arrest of the HDP leaders comes just at a time when” the ruling AK Party is seeking parliament’s backing for a referendum on the constitutional overhaul, he said by e-mail.