Reflections of Istanbul mayoral re-run…

The joy of the winners and the grief of the losers were quickly left behind since we have serious issues that need urgent solutions. We are to face strategic tensions as G-20 Summit in Osaka approaches.

As matter of fact, markets’ reaction following the recent Istanbul mayoral elections was very similar to the one that took place after the annulled March 31elections. However, in the meantime, S-400 and F-35 issues have grown further, becoming a huge problem. That’s why mayoral elections which were concluded on Sunday are being interpreted as the “end of a problematic era” both for Ankara and Istanbul.

The way that the international press treats the electoral results indicates that their faith in Turkish democracy is re-established. The coverage of mayoral elections by the foreign media mostly comprised that voters celebrated the victory in the most peaceful way and the fact that Turkish citizens were quite happy to see the democracy is fully functional again. Nevertheless, the recent drop and the following rise in benchmark rate and exchange rates don’t go unnoticed.

The tensions of the upcoming G-20 Summit in Osaka have already started to affect markets. It was also interesting that Putin has ordered the Russian Forces to be fully ready before the summit. The powerful leaders of the world are working hard to create new tensions that they might reveal at Osaka in accordance with the “give-and-take” policy. I think Turkey will play the “Eastern Mediterranean” and “Syria” cards. The fact that Russians and Americans are acting in coordination with the PYD elements is trying Turkey’s patience.

“No more open politics …”

There are rumors that Russia made some requests about Syria in return for helping Turkey in S-400 missile system issue. In short, everyone wants to gain advantage in exchange for the compromise. It will be difficult for the United States to let go of the S-400, however if Turkey makes a kind gesture about Eastern Mediterranean and Syria, I hope Trump and Turkey will find common ground. According to some experts, it’s easier for Turkey and Russia to find common ground compared to a possible consensus between Turkey and Russia.

These relations, however, may become complicated when they are handled with “political openness”. Turkey needs to deliver all of its political messages during state-level negotiations and private talks in lieu of delivering them openly through media. Turkey’s current outlook is perceived by the world as “Yes, we did it but let us tell you why”. From now on, Turkey should start adopting a rather moderate tone of voice when addressing to the public while using a tone which is “more open to reconciliation” when negotiating with other countries. After all, there are cases that have not been yet closed. No matter what countermeasure we take, any strong decision taken against would have consequences.

The fact that the scenarios are highly diversified with multiple possible results is obviously influencing investment decisions; and the fact that political and economic uncertainty still remains intact is making it more difficult for administrators to manage expectations, which sadly brings negative impacts on the economy.