Turkey dismisses 259 local officials for suspected terrorist links

Interior Minister Suleyman Soylu removed 259 local neighborhood heads — known as “muhtar” in Turkish — from their posts. (AFP)
Updated 15 October 2018
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Turkey dismisses 259 local officials for suspected terrorist links

  • Interior Minister Suleyman Soylu removed 259 local neighborhood heads
  • Turkey has suspended or sacked over 140,000 public sector employees because of alleged links to the US-based Muslim preacher Fethullah Gulen blamed for the July 2016 failed coup

ANKARA: Turkey has dismissed 259 local officials for suspected links to terrorist groups or unsuitable behavior, the government said on Monday, a move the pro-Kurdish opposition said was aimed at helping the ruling AK Party ahead of 2019 polls.
The elected officials, known as “mukhtars,” serve as the lowest administrative authority in Turkey. Although not officially members of any political party, they are influential in decision-making in their villages and local districts.
The officials were dismissed pending an investigation, the Interior Ministry said, adding they were suspected of links to groups that threaten Turkey’s security or of behavior not befitting their duties. It did not elaborate on the charges.
The ministry did not give a geographic breakdown of the dismissals, but a parliamentarian from the pro-Kurdish Peoples’ Democratic Party (HDP) said the move was the latest attempt by President Tayyip Erdogan’s ruling party to curtail the HDP’s influence in the largely Kurdish southeast.
“Following the arrest of municipality heads from the HDP, the appointment of trustees to municipalities and the removal of immunity and arrest of parliamentarians, it is now the mukhtars’ turn,” Meral Danis Bestas said in a statement.
A spokeswoman for the HDP said she did not know how many of the dismissed officials came from the southeast.
Some 94 of 102 municipalities in Kurdish-majority cities and towns are now administered by trustees rather than by their elected mayors. Authorities removed those mayors, elected in the last municipal elections in 2014, in a security crackdown that followed an attempted military coup in 2016.
Erdogan has said the government would appoint trustees to any municipalities held by the HDP after March 2019 local elections.
Erdogan and his AK Party say the HDP has links to the outlawed Kurdistan Workers Party (PKK), a militant group that has waged an insurgency against the Turkish state since 1984. The HDP denies accusations of links to the PKK and says it is being unjustly targeted by the government.
Last week the government dismissed 559 village guards for suspected terrorist links and another 76 for suspected involvement in human and drug smuggling.
Village guards are locals armed and paid by the state to protect their communities, mostly in the east and the southeast. They are frequent targets for PKK militants.
The PKK is deemed a terrorist organization by the United States, Turkey and Europe.


How pressing is Lebanon’s financial challenge?

Updated 17 January 2019
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How pressing is Lebanon’s financial challenge?

  • Lebanon has a current account deficit because it imports more than it exports
  • Lebanese banking sector has been applying financial sanctions and anti-money laundering legislation

BEIRUT: Financial strains in Lebanon have been brought into focus by turbulence on markets where its dollar-denominated sovereign bonds suffered a heavy sell-off last week following comments by the finance minister about the public debt.
The bonds recovered this week on assurances the government is “absolutely not” planning to restructure the debt and is committed to paying its maturing debt and interest payments at predetermined dates.
But the episode has added to the debate of Lebanon’s debt sustainability after warnings from politicians, the IMF and World Bank over economic and financial conditions in a country that has suffered years of low economic growth.
Lebanon’s factional politics has led to years of policy paralysis and obstructed reforms needed to boost investor confidence. More than eight months after an election, politicians have been unable to agree to a new government.
Lebanon has one of the world’s biggest public debts compared to the size of its economy, largely generated by servicing existing debt and high state spending. It amounts to roughly 150 percent of GDP.
The World Bank has estimated that financial transfers to the state-owned power producer alone averaged 3.8 percent of GDP from 2008 to 2017. A public-sector wage increase in 2017 and higher interest rates have added to pressures on the budget deficit.
Lebanon also has a current account deficit because it imports far more than it exports.
Financing these two deficits has depended on critical financial transfers from its diaspora.
But questions over this model have grown.
“At the heart of concerns is the recent slowdown in remittance/deposit inflows, which have traditionally funded a large part- if not all of Lebanon’s financing requirement,” Goldman Sachs said in a December analysis.
The World Bank, in an October report, said Lebanon was exposed to significant refinancing risks. “Attracting sufficient capital, and in particular deposits, to finance significantly larger budgetary and current account deficits is proving challenging in light of slower deposit growth.”
Lower oil prices have been seen by economists as a major cause of the slowdown, with many Lebanese working in oil-producing Gulf Arab states. Political instability and lower growth in Lebanon have also been cited as factors.
Economic growth rates have fallen to 1-2% from 8-10% in the four years before Syria’s civil war began in 2011.
Central bank governor Riad Salameh said last month the banking sector was capable of financing the state’s foreign and domestic debt in 2019. The central bank’s net foreign assets stand at around $40 billion.
The financial system has proven resilient through political crises, assassinations, and war. The Lebanese pound peg against the US dollar has been stable for over two decades.
Often in the absence of effective government, the central bank has maintained stability using stimulus packages and unorthodox financial operations, made possible by large diaspora deposits into the banks.
But since 2016, the slowdown in non-resident inflows prompted the central bank to embark on “financial engineering” to draw more dollars to its reserves.
The World Bank and IMF have praised the central bank for a critical role. But the World Bank’s October report noted some central bank tools were becoming less effective and that Lebanon’s risk profile was rising sharply.
Confidence is critical to encouraging the inflows upon which the system rests. This would be boosted if a new government was agreed and moved quickly toward making reforms of the power sector.
This could unlock some $11 billion in funding pledged by foreign states and institutions last year for a capital investment program.
The power wielded by the Iran-backed Lebanese Shiite group Hezbollah is at the heart of tension between Lebanon and Gulf states such as Saudi Arabia that once supported Beirut but have turned their attention elsewhere in recent years.
Goldman Sachs noted that one cause of the slowdown in remittance and deposit growth was “the perceived reduced likelihood of external support in light of heightened tensions between Lebanon and the oil-rich Gulf countries.”
The heavily armed group is listed as a terrorist group by the United States and fought a war with Israel in 2006.
“We have warned for some time that if there was a fresh escalation of tensions with Gulf countries or Israel, that could lead to another period of capital flight that puts the dollar peg under pressure,” Jason Tuvey of Capital Economics said.
The United States has tightened financial sanctions against Hezbollah, part of its wider effort to counter Iran. The Lebanese banking sector has been applying these measures and anti-money laundering legislation.
Lebanon lobbied Washington in 2017 to balance its tough anti-Hezbollah stance with the need to preserve the country’s financial stability. Consequently, sanctions were altered enough to allay fears of major economic damage.
The application of such measures may have weighed on some inflows to Lebanon, though it is difficult to know to what extent, Tuvey said.
Once Prime Minister-designate Saad Al-Hariri manages to form a government, investors will be looking for follow-through on promises of reducing the budget deficit. But there are concerns that politics could get in the way of reforms once again.
“Lebanese and international stakeholders agree that the budget deficit needs to narrow, but a credible, actionable plan for achieving this is still lacking and it remains unclear if political dynamics will allow for a concerted fiscal adjustment,” Fitch Ratings said.