Turkey is currently in the midst of an economic crisis, with the Turkish lira plummeting in value and inflation hitting its highest level since 2002. Balki Begumhan Bayhan writes that ahead of elections set to be held in 2023, Turkish President Recep Tayyip Erdoğan now risks losing his hold on power

Begumhan Bayhan, Balki

English

LSE Research Online

Does	Turkey’s	economic	crisis	spell	the	end	forErdogan?Turkey	is	currently	in	the	midst	of	an	economic	crisis,	with	the	Turkish	lira	plummeting	in	value	and	inflation	hittingits	highest	level	since	2002.	Balki	Begumhan	Bayhan	writes	that	ahead	of	elections	set	to	be	held	in	2023,	TurkishPresident	Recep	Tayyip	Erdoğan	now	risks	losing	his	hold	on	power.Once	seen	as	an	emerging	economy	and	one	of	the	21st	century’s	success	stories,	things	are	not	looking	so	brightin	Turkey.	Although	the	country	has	experienced	a	number	of	economic	problems	in	the	past,	the	past	year	hasbeen	an	especially	challenging	one.With	the	Turkish	lira	slumping	to	record	lows	and	the	country	experiencing	skyrocketing	inflation,	Turkey’s	economyis	quickly	accelerating	downwards.	This	presents	a	risk	for	the	country’s	President,	Recep	Tayyip	Erdoğan,	whosepopularity	has	been	on	the	decline.	Ahead	of	upcoming	elections	in	2023,	the	combination	of	a	collapsing	economyand	the	government’s	plummeting	support	has	put	Erdoğan	in	an	extremely	vulnerable	position.Turkey’s	economic	woesThe	currency	crisis	has	seen	the	value	of	the	Turkish	lira	crash	at	an	accelerated	speed.	While	the	lira	was	at	7.3against	the	dollar	in	January	2021,	it	plunged	as	low	as	16.69	at	one	point	in	December.	Losing	over	40	per	cent	ofits	value,	the	lira	was	the	worst	performer	amongst	emerging	market	countries	in	the	past	year.	Although	it	seemedto	slightly	recover	at	the	end	of	December,	it	fell	again	thereafter.	The	lira	currently	stands	at	13.79	against	thedollar.In	addition	to	the	currency	crisis,	Turkey’s	inflation	rate	has	also	surged,	rising	from	21	per	cent	in	November	toover	36	per	cent	in	December.	The	current	rate	is	the	highest	recorded	in	Turkey	since	just	before	the	Justice	andDevelopment	Party	(AKP)	came	to	power	in	2002.	The	cost	of	food	and	drink	has	increased	by	over	43	per	centannually,	driven	by	a	rise	in	the	price	of	basic	food	items	such	as	bread,	flour,	and	milk.The	current	escalation	of	Turkey’s	crisis	was	triggered	by	Erdoğan’s	unorthodox	economic	policy	–	which	hasincluded	lowering	interest	rates	in	spite	of	the	spiralling	inflation	rate.	The	President	has	long	held	an	obsessionwith	ultra-low	interest	rates,	believing	that	lower	rates	carry	benefits	such	as	generating	economic	growth	andboosting	employment.	Part	of	Erdoğan’s	justification	for	this	unorthodox	economic	policy	is	Islamic	doctrine.	Herecently	stated	that	“as	a	Muslim”	he	“will	continue	to	do	whatever	the	religious	decrees	require”.	He	has	stuckrigidly	to	this	dogma	even	in	the	face	of	the	unprecedented	crisis.Turkey’s	central	bank	has	come	under	continued	pressure	to	comply	with	Erdoğan’s	policies.	In	December	itlowered	its	one-week	repo	rates	for	the	fourth	consecutive	time	to	14%	(previously	standing	at	19%	in	September)despite	the	rising	inflation.	The	bank,	once	fairly	independent	of	the	government,	has	become	progressively	less	sounder	Erdoğan,	to	the	extent	that	it	is	now	completely	under	government	control	and	open	to	widespreadinterference	by	the	President,	who	has	replaced	three	of	the	bank’s	governors	in	as	many	years.Is	this	the	end	for	Erdoğan?The	impact	of	the	ongoing	crisis	is	being	felt	in	everyday	life	by	the	Turkish	people.	According	to	polling	carried	outin	December	2021,	61.5	per	cent	believed	that	annual	inflation	had	accelerated	over	100	per	cent.	For	a	regime	thathas	built	much	of	its	support	on	its	reputation	for	economic	stewardship,	these	are	worrying	numbers.	Moreover,Erdoğan’s	personal	ratings	have	also	been	hit,	with	his	approval	slumping	to	38.6	per	cent	against	57.2	per	centwho	disapprove	of	his	actions	as	President.	All	of	this	indicates	that	his	hegemonic	position	in	Turkish	politics	couldbe	eroding.Erdoğan	now	finds	himself	in	a	vulnerable	position.	Economic	crises	have	precipitated	the	downfall	of	severalauthoritarian	regimes	in	recent	history.	The	ongoing	protests	in	Kazakhstan	–	triggered	by	increased	fuel	prices	–might	serve	as	the	latest	example.	However,	the	situation	is	all	the	more	threatening	for	Erdoğan	given	the	prospectof	elections	in	2023,	which	were	already	shaping	up	to	be	a	tight	contest	for	him	but	have	now	become	far	moredifficult.LSE European Politics and Policy (EUROPP) Blog: Does Turkey’s economic crisis spell the end for Erdogan? Page 1 of 2		Date originally posted: 2022-01-11Permalink: https://blogs.lse.ac.uk/europpblog/2022/01/11/does-turkeys-economic-crisis-spell-the-end-for-erdogan/Blog homepage: https://blogs.lse.ac.uk/europpblog/The	elections	carry	an	even	greater	threat	due	to	the	level	of	coordination	that	now	exists	among	the	country’sopposition	parties.	This	coordination,	which	began	in	the	2018	elections,	has	not	only	been	maintained	over	the	lastfew	years	but	has	even	increased.	The	Nation	Alliance	of	anti-Erdoğan	parties	now	possesses	a	wide	field	ofpopular	candidates	for	the	presidency	who	outpoll	Erdoğan.	Several	of	these	candidates	are	the	Mayors	of	largecities	such	as	Istanbul	and	Ankara.	They	were	elected	as	part	of	opposition	alliances	in	2019	at	a	time	when	boththe	President’s	approval	ratings	and	the	economy	were	in	a	far	rosier	position.According	to	polling	in	December,	the	most	admired	politician	in	Turkey	is	the	Mayor	of	Ankara,	Mansur	Yavaş,	whorepresents	the	Republican	People’s	Party	(CHP)	and	is	thought	of	favourably	by	around	60	per	cent	of	the	public.Ekrem	İmamoğlu,	the	current	Mayor	of	Istanbul,	who	also	represents	the	CHP,	ranked	in	second	place	on	51	percent,	with	Meral	Akşener	of	the	Good	Party	coming	third	on	39	per	cent.	Erdoğan	was	only	ranked	fourth	on	38	percent,	a	dire	result	for	a	politician	who	has	dominated	the	political	scene	for	two	decades.Erdoğan’s	current	approval	rating	is	similar	to	the	situation	in	June	2015,	when	a	general	election	was	held	in	whichthe	AKP	couldn’t	win	outright.	This	was	the	closest	the	party	had	come	to	losing	power	–	through	electoral	means	atleast	–	since	its	breakthrough	in	2002.	Back	in	2015,	Erdoğan’s	approval	rating	was	only	about	one	percentagepoint	lower	than	it	is	today.While	the	AKP	managed	to	escape	their	moment	of	weakness	in	2015,	rebounding	in	a	repeat	election	held	in	theautumn,	they	did	not	have	to	contend	with	such	a	poor	economic	situation,	and	they	faced	a	far	less	unitedopposition.	In	addition,	the	past	six	years	have	seen	a	build-up	of	additional	grievances	against	the	regime	as	itsauthoritarian	character	has	been	strengthened,	especially	following	the	2016	attempted	coup.Erdoğan’s	responseErdoğan	is	trying	to	build	a	narrative	about	the	economic	crisis	which	attributes	blame	to	a	variety	of	differentfactors,	including	the	influence	of	‘foreigners’	and	‘outsiders’.	However,	the	electorate	doesn’t	seem	to	be	buyingthe	argument,	and	there	is	growing	recognition	that	Turkey	is	experiencing	a	homemade	crisis	resulting	fromgovernment	policy.Polling	carried	out	in	December	showed	that	76	per	cent	of	people	reported	their	confidence	in	the	government’seconomic	policy	had	decreased,	and	earlier	polling	carried	out	in	October	showed	that	64	per	cent	did	not	believethe	government	would	be	able	to	resolve	the	current	economic	problems.Erdoğan	has	made	some	attempts	to	rectify	the	situation,	such	as	increasing	the	minimum	wage	by	50%.	However,it	is	doubtful	this	will	make	a	real	difference	considering	the	rising	prices	and	the	ongoing	currency	depreciation.While	the	old	minimum	wage	was	equivalent	to	$387	a	year	ago,	the	new,	‘higher’	amount	is	only	worth	$309dollars	in	current	prices.	In	addition,	many	basic	products,	including	their	components,	are	imported,	so	the	fall	ofthe	lira’s	buying	power	means	essentials	are	more	expensive	in	Turkey	than	previously.Erdoğan	gave	a	speech	on	20	December	where	he	pledged	to	guarantee	savings	in	the	lira.	This	causedsomething	of	a	recovery,	but	the	currency	soon	resumed	its	decline	and	there	is	no	saying	how	bad	the	situationcould	get.	He	will	soon	have	to	fight	an	election	against	a	unified	and	popular	opposition,	in	the	midst	of	economichardship	and	shorn	of	his	reputation	for	competent	governance.	All	is	not	yet	lost,	not	least	because	the	possibilityof	electoral	manipulation	remains	real,	but	the	current	upswell	of	anger	among	ordinary	people	may	well	spell	theend	for	Erdoğan’s	hegemony	over	Turkish	politics.Note:	This	article	gives	the	views	of	the	author,	not	the	position	of	EUROPP	–	European	Politics	and	Policy	or	theLondon	School	of	Economics.	Featured	image	credit:	European	CouncilLSE European Politics and Policy (EUROPP) Blog: Does Turkey’s economic crisis spell the end for Erdogan? Page 2 of 2		Date originally posted: 2022-01-11Permalink: https://blogs.lse.ac.uk/europpblog/2022/01/11/does-turkeys-economic-crisis-spell-the-end-for-erdogan/Blog homepage: https://blogs.lse.ac.uk/europpblog/

Does Turkey’s economic crisis spell the end for Erdogan?

http://eprints.lse.ac.uk/114139/1/europpblog_2022_01_11_does_turkeys_economic_crisis_spell_the_end_for.pdf

Does Turkey’s economic crisis spell the end for Erdogan?

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