Investors Eye Turkish Referendum Outcome Amid Uncertainties
By Coface, the international trade credit insurance company
Chart: Turkey’s Contribution of GDP Components (% points)
Turkey’s referendum ‘Yes’ vote over the weekend now paves the way for 18 amendments to the constitution that have long been sought by the ruling AKP. This has come six months after the failed coup attempt of 15 July 2016 in which the government reacted by declaring a state of emergency and sweeping purges.
The amendments include the introduction of an executive presidency that would replace the existing Parliamentary System. The main changes under the new system include:
The abolition of the office of the prime minister: The president now has the power to appoint cabinet ministers without requiring a confidence vote from parliament and to propose budgets. The president will also have the power to dissolve the national assembly and impose states of emergency.
The new system allows for a partisan president: The president will no longer have to be neutral (like under the current parliamentary system), but will be able to maintain an affiliation to his political party.
The number of members of the parliament: The ‘yes’ vote raises the number of lawmakers in the parliament to 660 from current 550. It also lowers their minimum age for political candidacy to 18 from 25.
The powers of Parliament to scrutinise ministers and hold the government to account, as well as granting ministers the power to issue decrees regarding certain matters, are abolished. Parliamentary terms are extended from four to five years.
Parliamentary and presidential elections will be held on the same day every five year.
The president will be able to appoint four out of 13 judges to the highest judicial body in the country. Seven will be appointed by the Grand Assembly. The other two members are Minister of Justice and Ministry of Justice Undersecretary, which is unchanged.
Military courts will be abolished
Supporters of “Yes”: They argued that the constitutional change will make Turkey stronger with the president having enough power to promote economic development and fight threats against the country. The stability will be permanent as it will not depend on an individual or a political party. The bureaucracy will be more effective and faster, which will boost economic growth. Actions related to the domestic security policy will be implemented quicker.
Supporters of “No”: They said the president will be extremely powerful and the separation of powers will be abolished. This may progressively turn into a more authoritarian regime. They also argued that there will not be enough checks and balances in the new system. They argued that the new system is not enough to contain the president’s power, removing from parliament the ability to oversee the executive branch, giving the president the power to appoint too many judges.
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