ISPI The Italian Instıtute for International Political Studies 12 May 2023 : The Economy's Role in Turkey's Upcoming Elections

 

ISPI The Italian Instıtute for International Political  Studies 

12 May 2023

The Economy’s Role in Turkey’s Upcoming Elections

Turkey 2023: the nation heads to the polls amid an uncertain future

Kadri Tastan 

The upcoming elections could be a real turning point for Turkey, because, in President Recep Tayyip Erdoğan’s 20 years in power, the consensus around him and the Justice and Development Party (AKP) political elite has never been so low as it has been in recent years, and polls published in recent months bear witness to this. President Erdoğan appears closer than ever to losing the presidential election. Already, signs of growing discontent with Erdoğan and the AKP were evident in the 2019 local elections, where the majority coalition (AKP and the Nationalist Movement Party -MHP) candidates lost in the country’s largest cities, including Istanbul and Ankara.

It is worth underlining that if today we are talking about the possibility of Erdoğan’s losing the elections, perhaps one of the most important reasons for this is the Turkey’s economic deterioration in recent years. Since the lira’s downward spiral began in 2018 and accelerated in 2021, the economic crisis has devastated all households and the middle class is collapsing in Turkey. Prescriptions promoted in recent years by President Erdoğan and the gradual reduction in the autonomy of the Central Bank have pushed inflation to hit a quarter-century high of over 85% in October 2022 – reminiscent of the 1990s, when inflation rates were in the triple digits, and have caused the periodic crashes of the value of the lira. As a result, the cost of living has risen dramatically, especially for the weaker section of society. But the middle class has also lost its purchasing power and the value of its savings. Even purchasing basic foodstuffs has become very difficult for millions of families as a result of the soaring prices. While growth remains robust, the most recent official statistics show that annual inflation is still above 50%. The official unemployment rate published by the TUIK (Turkish Statistical Institute) is at 10%; nevertheless, the broadly defined unemployment rate (underutilized labor rate) and youth unemployment rate seem to be two-fold, more than 20%. Unorthodox economic policies dictated by President Erdoğan, particularly in the area of interest rates, are considered by many economists as the main culprits for this situation.

Additionally, the earthquake was the final blow to the already poor economic and financial situation of the country. According to World Bank estimates, the direct physical damage caused by the earthquake is over $34 billion, equivalent to 4 percent of Turkey’s GDP in 2021. Add to this figure the cost of recovery, clean-up, reconstruction and secondary impacts on the economy, and the cost easily exceeds $100 billion.

The government’s inadequate response in the early days of the earthquake and the hardships earthquake victims still face in affected areas could cost the government votes. Therefore, the government is trying to mitigate this potential electoral harm by starting to rebuild very quickly before the elections. But despite these efforts of reconstruction and propaganda by the government, until the elections there will probably not be enough time to erase the government’s failure to manage the crisis and fully restore public confidence in the government.

Will history repeat itself?

It is ironic that some circumstances under which the AKP, led by Erdoğan, came to power are not unlike those of today. The AKP came to power at a time when Turkey was also economically devastated by an economic crisis and was still recovering from the 1999 earthquake. 2001, the year before the AKP came to power, was a decisive year in this sense as the country had gone through one of the worst financial crises and the government of the time started to implement a large-scale economic program, supported by the International Monetary Fund. Once in power, the AKP continued these reforms put in place by the previous government, adding some of its own measures, with success. During the post-crisis recovery period, the Turkish economy has made great strides, thanks to the economic and political reforms undertaken by the AKP governments and the favorable conditions offered by the EU process and quantitative easing of the major central banks that caused a large flow of capital into emerging markets. The country’s GDP more than tripled between 2001 and 2013, reaching its peak of $957 billion.

But in a few years, the country’s economic miracle has disappeared, and the current precarious economic situation has undeniably impacted Turkish politics along with the popularity of Erdoğan and the AKP, which has declined as economic conditions have deteriorated. The challenging economic conditions affecting millions are now also threatening Erdoğan’s career. Opinion polls show an increase in support for the opposition parties over the AKP and its coalition partner, the far-right MHP. So, the question everyone is asking is whether it is the economy that will dethrone Erdoğan.

The answer does not seem so simple. The rapidly rising rate of poverty and the dire economic situation in the country have reduced support for Erdoğan and the AKP in recent years, but the support still remains high. In fact, all opinion polls show that the AKP will be the first party in the parliamentary elections and that Erdoğan will run neck-and-neck with the long-standing opponent Kemal Kılıçdaroğlu in the presidential elections.

The economy alone will not determine everything

This resistance from President Erdoğan’s and the AKP’s support base shows that the state of the economy is not the main determining factor for voters in Turkey. Some other factors seem to be at play here. The first one is the decisive role of ideological and identity affiliation in people’s choices in Turkey. Turkey is politically a very polarized country and political tribalism has become one of the main factors influencing voter behavior. Several studies show that party identities are transformed into tribal affiliations and supporters of different political parties live in “echo chambers”, where individuals are only exposed to biased information or opinions, which only serve to strengthen their existing prospects.[1] The ideological affinity is simply more important than economic conditions for some voters. Therefore, this polarization could in part help the government to avoid a full punishment of mass.

Another factor that could mitigate the effect of the economic disaster on the votes of AKP supporters is the very robust clientelist system and networks the AKP has built during its 20 years of its rule. Even if the general state of the economy deteriorates, people who are close to the regime, whether they are the most advantaged or disadvantaged, can continue to prosper because of the assistance they receive from the state. This dynamic also helps to explain in part the resilience of the support base despite the economic challenges facing the country.

Therefore, while the May 14 elections will be the toughest for President Erdoğan in his 20 years in power, he still has a chance of winning. Finally, although it is difficult to predict the winner of the neck-and-neck race, the coming years will be very difficult for the Turkish economy, no matter who wins.

Kadri Tastan

German Marshall Found of the United States