Reforms in Turkey come to a halt as Erdogan tightens his grip

Turkish economic reforms, including an overhaul of the labour market, the introduction of a government-mandated retirement scheme and the creation of national bond and equity markets, have come to a halt after the removal of Prime Minister Ahmet Davutoglu, who championed these reforms. This means Turkey's low savings rate, inflexible labour market, unproductive agriculture sector, and low rates of foreign direct investment may continue to drag down the country's economy. If so, the country will become increasingly dependent on consumption-driven growth as President Recep Tayyip Erdogan places economic reforms behind his priority to cement his grip on power.

“This is amazing and so sad,” an Istanbul native told me on a Friday night in April as we strolled a nearly empty Istiklal Avenue, the broad pedestrian thoroughfare that is the city’s main artery. “I’ve never seen Istiklal this quiet on a weekend. Never.”

Terror warnings are now a weekly occurrence in Turkey. Suicide attacks and car bombs in Istanbul and Ankara this year, which killed nearly 200 people, have deepened the sense of fear. Major Istanbul soccer matches and art fairs have been canceled as newspapers print instructions for “spotting a suicide bomber.” Tourist arrivals have fallen more than 10 percent, the biggest decline in a decade.

Ankara is the capital, but Turkey revolves around Istanbul, its heart and economic engine, with a fifth of its people and 40 percent of tax revenues. As recently as 1970, it was home to just 2 million people. Decades of growth have remade it into a megalopolis of 16 million, stretching across more than 2,000 square miles — more than six times the size of New York City. Few major cities have grown faster in modern times, and still whole neighborhoods are being transformed and the government has budgeted more than $100 billion for a handful of megaprojects.

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But it’s about much more than growth. Perhaps more than anywhere else, Istanbul is the place to observe the current age in all its raging glory: urban expansion in overdrive, freedom squeezed, democracy in retreat, refugees seeking safe harbor, Islam and modernity in battle, and terrorism on the march. “Istanbul is and always has been a barometer,” Oxford historian Peter Frankopan said, “a sort of early warning system of pressure systems moving in.”

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A predominantly Muslim city bisected by the Bosporus, which cleaves Europe and Asia, Istanbul has long been a place where the traditions of faith and the progress of modernity push up against one another. Now, though, it is also becoming an ideological pivot point — torn between liberal democracy and authoritarianism, between secularism and an Islam-influenced state, between Ataturk and Erdogan — with all the foibles of one of the world’s fastest-growing megacities.

“The order that has ruled the world in the last few centuries is now crumbling,” Turkish President Recep Tayyip Erdogan warned the teenage graduates of Istanbul-area Islamic schools last month. “The sufferings we go through, the crises that follow one another are a precursor of a new wave of change.”

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In 1950, more than 80 percent of Turkish citizens lived in rural areas. Today, Turkey’s official statistics say 92 percent of Turks live in cities. Urban expansion has followed suit: Construction in Turkey increased nearly five times from 2002 to 2010.

Cranes dominate the Istanbul skyline as the city rushes to build more housing, offices, and infrastructure, competing with the likes of New York and Dubai for talent and investment. Since 2009, the city increased its international flight connections by 111 percent, compared to 4 percent in London, according to a 2015 study by MasterCard. Right now, some 13,000 workers are working around the clock on a new $30 billion airport. Dozens of new metro and monorail lines have been built, and, in March, construction workers slid into place the final segment of the world’s longest suspension bridge with a rail system.

Construction, however, is the world’s most corrupt industry, according to watchdog group Transparency International, and development in Istanbul is no exception. In March, US authorities arrested Turkish-Iranian businessman Reza Zarrab, a key figure in the corruption scandal that shook Turkey in late 2013. Prominent developers, local leaders, and top ministers were implicated, including Mustafa Demir, the mayor of Istanbul’s Old City, Fatih. As in ages past, Turkey’s current corruption is largely about cronyism, with a tight network of magnates cozying up to top officials. Big Istanbul projects often entail bribes or no-bid deals with vast conglomerates that oversee construction firms and media outlets.

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Erdogan has vowed to “root out the bad apples” — meaning those who might seek to undo this system — and has found some intriguing ways to do so. In 2014, when Azat Yalcin, an urban planner for the municipality of Fatih, sought to reveal vast graft within the district, his superiors dispatched him to a remote neighborhood to count street cats. He was later fired and has since decamped to Lisbon to continue his career. “I warned the mayor about the corruption,” Yalcin told me in a recent e-mail, “but he was defeated by his ego.”

Corruption erodes trust in government, particularly when you stir in the other main byproduct of hyper urbanization — inequality. In Istanbul, renewal projects often displace poorer locals, who, as the wealthy move into new high-end homes, are generally shunted to rows of remote, pastel-colored apartment towers on the city’s edge. This tends to spur frustration, as demonstrated by the Gezi Park protests that swept the country three years ago.

The Turkish government found a solution for such unrest: Last year, it passed a security bill that enables police to detain protesters for 48 hours without charge. Demonstrators covering their faces (to protect from tear gas, for instance) could face five years in jail. And police can now shoot people they believe are carrying explosives or attempting to attack a building or vehicle. One need only look at Istanbul’s muted, desultory May Day protests two weeks ago to see the impact of these laws.

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Democracy, freedom, and the rule of law “have absolutely no value any longer,” Erdogan recently declared. If true, this would mark an unprecedented shift. As Jason Brownlee, a professor of government at the University of Texas, recently explained in The Washington Post, for 40 years, analysts believed that no democracy with a gross domestic product per capita above $8,000 ($8,043 to be exact) could turn authoritarian. Turkey, where gross domestic product per capita now sits at about $10,000, is emerging as the poster child for a global authoritarian drift.

Elections do still take place in Turkey, and Erdogan’s Justice and Development Party, known as AKP, has never lost — 10 votes, 10 victories since its 2001 founding. In November parliamentary elections, it received about half of the vote, regaining its parliamentary majority.

The party’s rise and continued dominance are due in part to the successful integration of millions of mostly conservative Anatolians into Istanbul and other Turkish cities in recent decades. Like countless others, Erdogan’s family moved to Istanbul from the Black Sea coast when he was a boy.

Today, most of Istanbul’s new arrivals are fleeing the failed Arab Spring. Of the 2.7 million Syrian refugees in Turkey, some 400,000 live in Istanbul, mostly in the Old City. Turkey has spent $10 billion on Syrian refugees, mostly on the 300,000 in camps near the border with Syria. The rest have had to fend for themselves, and many have had a hard time of it, working for minimal pay, struggling with the language barrier, and living 8 or 10 to a cramped apartment.

At Salloura, a family-run baklava shop relocated from Hama to Istanbul’s Aksaray district, Syrians crowded sidewalk tables chatting and nibbling on Middle Eastern sweets on a sunny afternoon in late March. Ahmed Hadja has managed the shop for about a year. “Our workers don’t have work permits, they really don’t understand the laws very well,” he said. “We could definitely use some help to make Syrians feel more at home here.”

The world is facing its greatest refugee crisis in more than 70 years, with more than 60 million people forced from their homes. Next week, world leaders and the global aid community will descend on Istanbul for the world’s first-ever Humanitarian Summit. Their main objective will be managing the refugee crisis by seeking to help new arrivals integrate. There are lessons to be learned from Turkey’s approach: In recent months, Ankara has taken steps to help Syrians build new lives. The government has made it easier for Syrians to get work permits and recently teamed up with Istanbul’s Bahcesehir University to teach Turkish to more than 300,000 Syrian youths.

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Some have settled in quite nicely. A few miles from Salloura, in a lovingly restored wooden house, all variety of Middle Easterners stroll the aisles at Pages bookstore and cafe, opened last June by a Damascene publisher. The books are mostly in Arabic, with a smattering in French and English. The bright, comfortable space hosts workshops, concerts, screenings, and other events. “We welcome not only Syrians, but all Arabs, all peoples from the region,” Pages salesman Rawad Alsaman said on a recent afternoon, as a Syrian oud player accompanied an Iranian singer in the shop’s cafe.

Gathering places like Pages have begun to resurrect the famed cosmopolitanism of Constantinople, which in the early 18th century printed some 300 foreign-language newspapers. In addition to all the Arab arrivals, the Old City is home to communities from Central Asia, North Africa, the Caucasus, and elsewhere. It’s a place where Muslims mingle, sharing traditions and ideas. “The artistic and cultural Islamic circles have moved to Istanbul due to internal conflicts,” the Moroccan academic Ali Gahandorur said during a recent visit to the city. “Muslim intellectuals are now convening in Istanbul.”

Turkey’s leaders have long sought to position the city as a center of Islamic thought. Last year, the religious directorate, or Diyanet, announced plans for an Istanbul Islamic university to rival leading institutions like al-Azhar in Cairo and Saudi Arabia’s Medina Islamic University. Expected to open next year, with instruction in Turkish, English, and Arabic, the new university dovetails with the government’s broader advocacy of Islamic education. Marmara University, on the city’s Asian side, has emerged as a breeding ground for European imams. As part of a Diyanet program, the university trains Turkish theology students from Germany, France, the Netherlands, and Australia, who after graduation are placed at mosques in their home countries.

Erdogan regularly expresses his hope to create a “pious generation.” That vision may be partially about currying votes, but, under AKP rule, the number of students in Islam-focused public schools, known as imam hatip schools, has leapt from about 60,000 to more than a million. “Always keep in mind that Turkey is the hope of the Islamic world,” Erdogan said in that recent speech to imam hatip graduates in Istanbul. “And you are the hope of Turkey.”

Erdogan is a former member of the Welfare Party, an Islamist party that was banned in 1998 for violating the separation of religion and state. But today, the AKP, which Erdogan cofounded, has shown itself willing to use Islam as a political tool.

In 2014, after the government briefly shut down Twitter, the Friday sermon sent from the Diyanet to the country’s 80,000 mosques reminded Turks that “freedom requires responsibility.” Toss in censored theater productions, reduced hours for alcohol sales, and the allowance of headscarves in government buildings, and many critics see the gradual Islamization of Turkey — despite the fact that less than 15 percent of Turks support Sharia law.

Istanbul, meanwhile, has become a murky nexus of terror. Thousands of jihadis and ISIS recruits have passed through on their way hither and yon, including suspected Paris attack accomplice Hayat Boumedine in January 2015. In November, two Russian spies shot and stabbed a Chechen militant in his car. In December, Kurdish militants hit Sabiha Gokcen airport with several small blasts, killing a cleaning lady. Then ISIS struck twice — next to one of Turkey’s most iconic attractions, Sultanahmet Mosque in January, and on Istiklal two months later — killing 18 people, mostly foreigners, and wounding dozens more. An online map of terrorist detentions across Turkey shows more arrests have occurred in Istanbul than anywhere else.

The leaders of Jordan and Russia have accused the AKP of supporting ISIS. There’s little proof of that, but some of Ankara’s moves may have encouraged the growth of the Salafi jihadist group. Four years ago, Turkey bet on extremist groups to oust Syrian President Bashar Assad and reportedly funneled weapons to the Al Qaeda-linked Nusra Front. Thousands of foreign fighters passed through Turkey to Syria, and many ultimately joined ISIS. As part of the EU-accession process, Turkey has made it more difficult to detain foreigners for terror-related activity; to be held in custody, they now must be guilty of a terrorist crime. Such legal loopholes have helped enable ISIS to build a vast networks of cells in Turkey — a recent report found the group in 70 of the country’s 81 provinces.

Istanbul, ancient capital of empires, has been my home since early 2013. From my initial visit a decade ago, when I watched the sun sink behind pencil-thin minarets as the call to prayer sounded over cobblestone streets, I’ve been besotted. Drawn to the pulse of a weekend night in Pera, to the kebabs and kaymak, to chugging up the Bosporus on the deck of a stately ferry on a brilliant afternoon, past frolicking dolphins and the fairy tale of Dolmabahce Palace.

But my adopted home recently spit me out. In late April, as I returned from a holiday in Italy, I was stopped by immigration authorities at Ataturk airport and refused entry. Now, a few weeks later, I’ve little clarity about when, or even if, I’ll be allowed back in.

Globally, press freedom suffered more in 2015 than it had in more than a decade, according to a recent report by Freedom House. In Turkey, it has all but vanished. In just the past year, Erdogan has silenced hundreds of critics among the citizenry, the media, academia, the business community — even his own political allies. The government has jailed journalists, shuttered critical TV stations, and taken over leading newspapers. Erdogan’s long arm has even reached into Europe, where he prodded German Chancellor Angela Merkel to charge a television comedian with insulting a foreign leader under an obscure German law.

Most recently came the so-called palace coup — Erdogan’s May 5th ousting of Ahmet Davutoglu as prime minister and leader of the AKP. Davutoglu had reportedly criticized the president for arresting academics and journalists and declined to rally support for a plan to increase Erdogan’s power via an executive presidency. Sidestepping legality to oust a longtime political ally and consolidate his power, the president made a very sultan-like move.

In Istanbul, we may not be witnessing the fall of the Turkish model, as many have argued, but the rise of a different one, more in tune with our troubled age. “Fear, anxiety, turbulence, and volatility are the main [drivers],” says Frankopan, the Oxford historian. “That is how the world looked a thousand years ago. . . . Democracy itself is under pressure: That march of liberalism and tolerance seems to have gone into reverse.” He notes the rise of far-right demagogues in the United States and Europe, before adding: “Turkey is quite clearly at a crossroads, trying to work out if its future lies in the West or the East.”

Erdogan’s ouster of Davutoglu suggests Turkey has made its decision. Istanbul appears to be shifting eastward, into the past. Left to be seen is whether it pulls the rest of the world with it.

David Lepeska is a journalist who has written for The New York Times, the Atlantic, Foreign Affairs, Financial Times, the Economist, the Guardian, and other outlets. His work focuses on Turkey and Islam, the Middle East, urban issues, media, and technology. Follow him on Twitter at @dlepeska.