- Turkey’s May 14 presidential and parliamentary elections could hardly come at a more polarized time for the country of 85 million people.
- The incumbent President Recep Tayyip Erdogan is fighting for his political life after two decades in power.
- Opposition leader Kemal Kilicdaroglu is gaining polls as Turks face a cost of living crisis and the current government is accused of becoming increasingly authoritarian.
Turkish President and leader of the Justice and Development (AK) Party Recep Tayyip Erdogan speaks as he and his wife Emine Erdogan attend an election rally in Mardin, Turkey, May 10, 2023.
Turkish Presidency | Handout | Agency Anadolu | Getty Images
With both presidential and parliamentary elections taking place in Turkey on May 14, a more polarized moment could hardly come for the country of 85 million people.
Just three months after the devastating earthquakes that killed more than 50,000 people there, the country which has the second largest military in NATO, houses 50 American nuclear warheads, harbors 4 million refugees and is a key mediator between Russia and Ukraine has occupied before an economic crisis crisis years in the making.
The incumbent President Recep Tayyip Erdogan is fighting for his political life after two decades in power. He was Prime Minister of Turkey from 2003 to 2014 and President from 2014. He rose to prominence as mayor of Istanbul in the 1990s and was celebrated in the first decade of the new millennium for transforming Turkey’s economy into an emerging market powerhouse.
But recent years have been far less rosy for the religiously conservative leader, whose own economic policies have sparked a cost-of-living crisis. Tensions between Turkey and the West continue to rise, and both international and domestic voices are sounding the alarm that democracy in Turkey is looking less democratic by the day.
“Under Erdogan’s leadership, Turkey has provided arguably the most vivid example of how a state with plausible, functioning institutions and relatively effective rule of law can be subjugated first to the will of a ruling party and ultimately to an individual,” said Hussein Ibish, a senior scholar at the Arab Gulf States Institute in Washington told CNBC.
The frequent arrests of journalists, the forced closure of many independent media outlets, and the crackdown on previous protest movements — as well as a constitutional referendum in 2017 that greatly expanded Erdogan’s presidential powers — signal what many are calling a slide toward autocracy.
Given the recent dip in support for Erdogan, some fear he may be acting dirty to secure his power. His main rival is opposition leader Kemal Kilicdaroglu, leader of the centre-left Republican People’s Party (CHP), who is running as a single candidate and representing six different parties all of which want to remove Erdogan from power.
“This will definitely be the closest campaign for Erdogan since he came to power in 2002,” said Ryan Bohl, a senior Middle East and North Africa analyst at Rane.
There is also anger at the government for its slow response to a series of devastating earthquakes in February that killed more than 50,000 people in both Turkey and Syria, particularly over corrupt practices that allowed construction companies to break building safety codes to bypass. But the vast majority of Turks in the affected areas are longtime supporters of Erdogan’s AKP party and appear to believe in Erdogan’s promise to rebuild those cities within a year, analysts say.
The stakes are high for the country as a whole and for global geopolitics – and the mood on the ground is tense. Opinion polls are very close, most currently showing Kilicdaroglu ahead, but not by much. Many are wondering: if Erdogan loses, will he actually leave?
Turkish President Recep Tayyip Erdogan addresses the press after magnitude 7.7 and 7.6 earthquakes struck Turkey’s southern provinces February 7, 2023 in Ankara, Turkey.
Mustafa Kamaci | Agency Anadolu | Getty Images
“I’m very concerned about that [Erdogan] “Can use underhand tactics, deceit and even violence,” Ibish said. “Of course that can provoke extreme measures on the other side.” So it’s a moment of great fear.”
The presidential election consists of two rounds. If no candidate gets more than 50% of the votes in the first ballot – which is generally expected – there is a runoff, which takes place two weeks later.
The Turkish economy has been in a downward spiral for the past five years. During this period, the Turkish currency, the lira, has lost 77% of its value against the dollar, inflation has skyrocketed and unemployment has worsened significantly. Turkey’s official inflation rate is over 50%, although economists say it is actually over 100%.
“The economy keeps ordinary Turks busy and is the driving force behind the dwindling support for the government,” said Bohl of Rane. “If Erdogan and the AKP actually lose power, it will be almost exclusively for economic reasons.”
Erdogan has largely refused to raise interest rates despite soaring inflation, and defies economic orthodoxy by insisting that raising interest rates makes inflation worse, not the other way around. This, coupled with costly central bank interventions to support the lira, which has led to shrinking foreign exchange reserves, has seen foreign investors flee Turkey in recent years.
The current monetary policy tools Erdogan’s government is using to give the economy a semblance of stability are unsustainable, economists warn, and will have to be phased out after the election – likely causing significant volatility.
“The currency must collapse if he [Erdogan] wins because there will be no confidence and he created this artificial scenario that cannot be sustained for any length of time,” predicted Mike Harris, founder of Cribstone Strategic Macro, boldly in February.
If the elections go smoothly, “I think we’ll see investment in Turkey pick up,” said George Dyson, a senior analyst at Control Risks, adding, “This will be particularly the case if the opposition wins – it will demonstrate Turkey’s democratic credibility.” and allay concerns about the rule of law.”
However, there are still a number of challenges ahead: a potential breakup of the opposition coalition, if it wins, could “create a negative stimulus for the economy,” Dyson warned. Worse still, if the election result is challenged by the loser with allegations of voter fraud, confidence in the economy will plummet, he predicted.
View over the tourist district of Istanbul, Türkiye on October 27, 2022.
Rita Franca | Nurphoto | Getty Images
Kilicdaroglu and his opposition coalition propose a completely different economic path in the event of victory.
“Importantly for investors, the opposition wants to return to an orthodox monetary system, as opposed to the incumbent government’s heterodox policymaking,” Goldman Sachs analysts wrote in a research note on Thursday.
Still, “in either case, one should not expect overnight miracles, as efforts to contain inflation through higher interest rates would likely lead to currency shocks in the short term,” warned Hakan Akbas, chief executive of Istanbul-Washington-based consultancy Strategic Advisory Services. “However,” he added, “a new political leadership with a credible, competent economic team will have more support and patience from investors.”
Although Turkey is a long-standing member of NATO, Erdogan’s trademark has been to squabble with his Western counterparts, criticizing them at home and strengthening ties with Russia. His frequent anti-Western rhetoric and continued opposition to Sweden’s attempt to join NATO have increased tensions with European and American leaders – something Kilicdaroglu wants to reverse.
“Turkey is a member of the Western Alliance and NATO, and Putin knows it very well,” Kilicdaroglu said in an interview with the Wall Street Journal this week. “Turkey must abide by NATO’s decisions.”
Kilicdaroglu also wants to “priority the close economic ties, particularly with Europe, while the incumbent government’s current non-aligned policy would likely continue,” Goldman Sachs analysts wrote in their note.
Turkish President Recep Tayyip Erdogan (L) meets with Russian President Vladimir Putin (R) during the 22nd session of the Shanghai Cooperation Organization (SCO) Heads of State and Government Summit September 16, 2022 in Samarkand, Uzbekistan .
Agency Anadolu | Agency Anadolu | Getty Images
Still, Turkey is likely to remain at the forefront of negotiations on the United Nations-brokered Black Sea Grains Deal, which has helped ensure vital Ukrainian food exports reach the countries that need them, regardless of who takes power. Country analysts also believe that in the event of victory, Erdogan will ultimately agree to Sweden’s NATO membership and continue to try to mediate between Ukraine and Russia.
But the power of nationalism and Erdogan’s popularity in Turkey mean that “even if he loses, his national presence and political clout will not be gone,” Ibish said.
“Of course, if Erdogan wins, we can expect more of the same: a continuation of Turkey’s membership in NATO and relations with European and other Western states on uncertain terms. But it won’t be nice.”