Following the July 2016 coup attempt by a faction of the military, A2 made a number of predictions. The majority of these have borne out.
On 15 July, the coup plotters struck. Fighter aircraft launched to patrol the skies above the capital Ankara without authorisation from air commanders, and ground units seized and closed the Fatih Sultan Mehmet and Bosporus bridges, which link the two sides of the north-western city of Istanbul. Gunfire and explosions erupted as the coup plotters, supported by armour, engaged loyalist military units.
Meanwhile, a rebel strike team deployed to capture President Recep Tayyip Erdo?an, who was holidaying on the south coast. Rogue troops seized control of several media outlets, and a senior commander issued a statement saying that the military had taken control of the government.
Yet the rebels failed. Erdo?an escaped capture, and issued a defiant statement via social media that he would return to Ankara. The majority of the Turkish Armed Forces, the heads of all political parties and the bulk of the national civil police and intelligence services declared their loyalty to the government. Thousands of civilians mobilised onto the streets, chanting their support for the administration. Rebel forces were overwhelmed and arrested, by a combination of loyalist units and mobs of civilians.
In the aftermath of the failed revolt, the Turkish government began a wide-ranging crackdown which is still ongoing, over a year later. The state, blaming the Islamic cleric Fethullah G'len and his alleged shadow organisation, has detained thousands with little to no due process. The ramifications of that night are still being felt, and have fundamentally altered Turkey's political landscape.
In the immediate aftermath of the event, A2 produced a report assessing the situation and predicting the consequences. These predictions have proven accurate, as demonstrated below.
A2 predicted that Erdo?an will use the coup-attempt to cement his own increasingly authoritarian rule. In the immediate aftermath of the coup, the government declared a state of emergency, allowing the administration to bypass parliament when enacting laws.
It also prevented the judiciary from challenging such legislation in court, and expanded the authority of the police and security services. As of August 2017, the state of emergency has not been removed, and statements from government officials suggest that it is unlikely to be stood down within at least the six-month outlook.
Meanwhile, Erdo?an has successfully reconfigured the Turkish political system from a parliamentary format to an executive presidency. On 17 April, the electorate voted in an affirmative referendum on a proposed wide-sweeping restructuring of the Turkish government. The office of prime minister was abolished, and the president a position that had been nominally ceremonial was formally invested with the powers of the executive.
The president was also granted broad powers over the legislative and judicial branches, such as the ability to appoint senior judges. This formalisation of executive control over the judiciary fulfils another prediction made by A2 last year, that new judges will be 'overwhelmingly pro-Erdo?an'.
The referendum campaign was conducted in an atmosphere of intimidation, with Erdo?an publicly stating that No voters were traitors and supporters of the coup. Police harassed and in some cases arrested No campaigners, and local government administrations often attempted to suppress No rallies. In contrast, state-level funding was provided for the Yes campaign. The final result was 51.18 per cent voting in the affirmative, with 48.82 per cent against.
The president was also granted broad powers over the legislative and judicial branches
The intergovernmental Organization for Security and Co-operation in Europe (OSCE), in its 16 April 2017 report, concluded the referendum was 'unlevel', and that there was substantial state intervention in order to secure a 'Yes' result. A2 discusses the referendum in more detail here
The continued centralisation of power in the hands of the political executive and the suppression of both democratic institutions and norms are likely to continue over the one-year outlook. This, in turn, has implications for rule-of-law in the country, which could affect businesses. Increased ambiguity over the legal and political environment could lead to international businesses downgrading investments in Turkey, and managers could find staff increasingly unwilling to deploy there.
Government actions following the coup-attempt have demonstrated a willingness to expropriate companies on spurious national security grounds. Around 950 Turkish companies have been expropriated by the state in the aftermath of the coup, including the major Koza ?pek conglomerate and the Dumankaya construction company.
Expropriations have been accompanied by the arrest of business leaders on charges of sympathising with the coup and acting against state interests. Government agents or individuals closely linked to the current regime then replace senior managerial and board staff.
The U.S. Department of State estimated in its 2017 Investment Climate Statement that the total value of the expropriated businesses was over USD10 billion. Managers of expropriated companies have no genuine legal recourse to recover assets, and attempting to do so could place them at escalated risk of detention by security forces.
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