I happen to hear from friends from Turkey often these days that the country is not “soup du jour”. It is not “business as usual” anymore.

How should U.S.A. companies and others (from Europe or Asia) deal with Turkey now? Investments there – in our view – are unsafe and that once proud nation will become increasingly unstable.

We strongly advocate that current investors in Turkey consider how to limit their exposure and avoid new investments. The sense is that Turkey is set to devolve into chaos in a prolonged crackdown of established democratic processes labeled as “terrorist-linked” from the existing government. I cannot imagine businesses from civilized nations wanting to support a regime that is adverse to human rights of any kind.

The badly planned coup failed, I regret it. The distant shout, “I would free the state from a tyrant!”, was left unheard and silent in the night.

Friedrich von Schiller in 1797 in his famous poem (hated by the Nazis) wrote:

To Dionysius, the tyrant, would sneak

Damon, concealing a dagger;

He’s slapped by the guards in a fetter.

“What would you do with that dagger, speak!”

Demands the despot, his visage bleak.

“I would free the state from a tyrant!”

“For that, on the cross be repentant.”

 

Now Erdoğan wants to reinstate the death penalty. On July 26, 2016 in an interview Erdoğan pledged to follow up on his promise to reintroduce capital punishment if such a request is submitted by the country’s parliament, saying the government could not ignore the will of the people.  He was quoted:

What do the [Turkish] people say today? They want the death penalty reintroduced. And we as the government must listen to what the people say. We can’t say ‘no, that doesn’t interest us…I am not a king. I am only a country’s president. To be a stronger president does not mean to act in breach of constitution. Only in Europe is there no death penalty. Otherwise, it is almost everywhere.”

The death penalty was abolished by Turkey in 2004 in order to facilitate its acceptance as a European Union member. Since the failed coup well over 13,000 people, largely soldiers, have been detained in the massive purge. The fair trial and fate of these people is more than questionable and this is an issue, which worries me.

Resisting dictators is important. Turkey’s current president Recep Tayyip Erdoğan is one of the most vicious dictators to emerge in past years and he proudly takes the place in a select group of others such as Putin and the leader of China who do not hesitate to violate human rights on a daily basis. Thus the May 2016 World Humanitarian Summit in Turkey was a joke. It is as if the Nazis had celebrated human rights in a concentration camp.

Turkey has a long history of brutality and repression.  The country has a sad history of persecuting ethnic minorities.

The vicious occupation of Northern Cyprus continues.

Turkey’s argument that it faces terrorism is dangerous: none of the ancient battles against the Kurds (and Armenians) justifies massive repression of human rights, jailing of any and all opponents as well as the continued denial and defense of the Genocide of the Armenians. The major military incursions into Kurdish territory in past weeks were thinly camouflaged efforts at wiping out the Kurds.

The Kurdish people are repressed.  This has been going on for centuries and the brutal persecution of the Kurds is an activity shared by Iraq and Iran. Will they be subject of ethnic cleansing by Turkey’s president? Note that between 1925 and 1939 possibly over 1.5 million Kurds were deported or murdered. Will Erdoğan, the President, force a new ban on speaking Kurdish – akin to the 1924 mandate? In 1930 Turkey’s Minster of Justice reportedly stated:

I won’t hide my feelings. The Turk is the only lord, the only master of this country. Those who are not of pure Turkish origin will have only one right in Turkey: the right to be servants and slaves.

Turan Gunes, a former Minister of Foreign Affairs, at a session of the Council of Europe, reportedly said as he responded to the issue of Kurdish independence: “Let me tell you, with the tolerance of just a few countries like West Germany, France and England, we will have no problem liquidating millions of Kurds.”

Note that terrorism can be battled respecting human rights.  Note also that when I met many suffering Kurds in April 1991 during Operation Provide Comfort and Provide Comfort II I realized that Turkey’s approach to the Kurds was just as evil as was the case with Iraq.

Mustafa Kemal Atatürk established a secular Turkey and in many ways Turkey’s military as well as the TNP have been the protectors of the values established by Atatürk. Turkey’s current president has tried to emasculate the military with the most questionable arrest of senior generals and admirals – instilling a climate of fear in military (Operation Cage Action Plan).

Dictators rarely have a good end to their life. While I am certainly not advocating violence one must hope that brave officers of Turkey’s military and police possibly act again to rescue human right and the values of Atatürk. Turkey has a long history of coups (1960, 1971, 1980, and possibly 1993) and incidents such as the 1997 “military memorandum” or “Operation Sledgehammer” in 2003.

Investments in Turkey are questionable at best. Russia’s Gazprom – probably instructed so by the Russian dictator Vladimir Putin – on September 2, 2016 pledged a $1 billion investment in Turkey. Gazprom, which serves as a political instrument for negotiations with Europe, has today lost $300 billion market capitalization from its 2008 heyday valuation and the company is a financial shadow to what it was. And now Turkey invites Apples to invest in Turley following the ruling on taxes by Brussels.

Some U.S. firms with a modicum of historical memory know how IBM and Ford as General Motor’s Adam Opel unit supported the Nazis and provided some key tools for the murder of millions. It is a lesson, I hope, that has been remembered and learned.

Investing in Turkey now is but a support of a vicious regime. Europe is terrified of offending Turkey – the latter in order to apply pressure has reopened the doors for refugees to flood Europe. Over 300,000 came from Turley since the failed coup. And this can be a powerful tool to negotiate with the others.

What now?

Businesses have many other options. Investments in countries such as Bulgaria, Cyprus, Romania or Israel are probably more attractive and certainly safer and do not carry the odor of complicity with murderers. All these countries are empowered by young, educated and talented people, which is a treasure for any investment.

This company can provide advisory here as well as guide companies on a most treacherous complicated path. A consumer boycott of Turkish goods would also be useful.

Numerous U.S. companies are shying away from Turkey. Note this report:

The same cannot be said of investors from the West, particularly, if ironically, Silicon Valley, where “saving the world” has become a catch phrase. Many have pulled out of upcoming conferences and events to take place in Istanbul this fall.

“We’ve had nearly everyone from Silicon Valley cancel their plans to come to Startup Istanbul this October,” says Burak Büyükdemir, founder of the Istanbul based startup accelerator eTohum. eTohum hosts Startup Istanbul, a global demo day and conference that draws entrepreneurs and investors from Africa, Asia, Europe, Latin America, and the Middle East, every October.

Others from Europe and the U.S., Turkish venture capital investor Numan Numan says, are using Turkey’s many crises to “short change” Turkish startups, presenting term sheets and acquisition offers at reduced valuations. Numan is a partner at the Istanbul based firm 212.

 

Agostino von Hassell

The Repton group LLC

www.thereprongroup.com