TURKEY: Erdogan Fails to Regain Control
By Editorial Dept - Jun 07, 2013, 4:47 PM CDT
Bottom Line: If Prime Minister Erdogan continues to mismanage a crisis in the form of 7 days running of mass anti-government protests, the highly influential Gulen Movement will surface to unseat him and reshape the country’s energy ambitions.
Analysis: Mass protests that began benignly over plans to raze the last green park in Istanbul and then turned into mass anti-government riots have continued into their seventh day, with the ruling party and PM Erdogan misjudging their power and failing to get a handle on the situation. What is of most concern is the possibility that the Gulen Movement, a highly influential Islamist group, will take advantage of this opportunity to replace Erdogan with President Abdullah Gul, whom Washington views as a more controllable figure, particularly as Washington is keen to keep the Turks from making any more progress towards an economically independent Iraqi Kurdistan, via oil and gas. Indeed, Erdogan has already hinted at “foreign involvement” in the mass protests. In the meantime, President Gul has adopted an extremely conciliatory response to the protesters, which suggests his agenda is not in line with Erdogan’s. Gul has contradicted Erdogan over the past week, and the Gulen Movement’s mouthpiece newspaper, Zaman, is clearly propping Gul up against Erdogan. While the Gulen Movement has supported the AKP in its rise to power, this may be a sign that that support is being withdrawn. This brings into question…
Bottom Line: If Prime Minister Erdogan continues to mismanage a crisis in the form of 7 days running of mass anti-government protests, the highly influential Gulen Movement will surface to unseat him and reshape the country’s energy ambitions.
Analysis: Mass protests that began benignly over plans to raze the last green park in Istanbul and then turned into mass anti-government riots have continued into their seventh day, with the ruling party and PM Erdogan misjudging their power and failing to get a handle on the situation. What is of most concern is the possibility that the Gulen Movement, a highly influential Islamist group, will take advantage of this opportunity to replace Erdogan with President Abdullah Gul, whom Washington views as a more controllable figure, particularly as Washington is keen to keep the Turks from making any more progress towards an economically independent Iraqi Kurdistan, via oil and gas. Indeed, Erdogan has already hinted at “foreign involvement” in the mass protests. In the meantime, President Gul has adopted an extremely conciliatory response to the protesters, which suggests his agenda is not in line with Erdogan’s. Gul has contradicted Erdogan over the past week, and the Gulen Movement’s mouthpiece newspaper, Zaman, is clearly propping Gul up against Erdogan. While the Gulen Movement has supported the AKP in its rise to power, this may be a sign that that support is being withdrawn. This brings into question the fate of some game-changing oil and gas legislation that is currently being pushed through parliament and which would see a liberalization of the playing field and the potential privatization of the state-run oil and gas company, TPAO. The legislation would like go through regardless, but the beneficiaries would indeed change.

Recommendation: Any oil and gas deals with Turkey should be put on hold until we can see how the power dynamic may change. Keep an eye on foreign companies in Turkey right now, and watch the panic as the playing field is potentially redrawn.