7 Minutes Read more about the election test slated for 2023, the centennial of the Turkish Republic. After a decade of advances, the year 2013 marked a turning point. Measures of equality, prosperity, and employment have all declined* The president’s voter base has been bolstered by improvements in health and other areas. ISTANBUL, July 15 (Reuters) – Turkey’s president, Recep Tayyip Erdogan, has vowed President Tayyip Erdogan’s hopes of extending his leadership into a third decade may hinge on his ability to reverse an economic downturn that has seen Turks’ prosperity tmsnrt.rs/2TaYZu5, equality tmsnrt.rs/3jhqMnU, and employment tmsnrt.rs/3x6AXj1 plummet. Since 2013, there has been a downward trend. Erdogan will be up for re-election in 2023, the centennial of the Turkish Republic. Following a financial crisis, a strong recession, and the coronavirus outbreak in the last three years, polls suggest his popularity has dwindled. Even though Erdogan’s AK Party (AKP) remains popular, with a strong base among rural and working-class conservatives, some reports show the ruling coalition trailing an informal opposition alliance. Turkey was one of only a few countries to escape a contraction in 2020, and economic development has accelerated this year. However, recent years have seen a return to 20 percent or higher inflation for food and other basic necessities. “When you look at President Erdogan’s polling ratings against a challenging economic backdrop, it’s difficult to foresee the conditions over the next 12 months for them to think an election looks positive,” said Douglas Winslow, director of European sovereigns at Fitch Ratings. According to the World Bank, more than 1.5 million Turks plunged into poverty last year. And, according to the Gini index of income and wealth distribution, inequality has grown since 2011 and accelerated since 2013, wiping out significant improvements made between 2006 and 2010, Erdogan’s first decade in power. See tmsnrt.rs/3jhqMnU for an inequality index. tmsnrt.rs/2TaYZu5 tmsnrt.rs/2TaYZu5 tmsnrt.rs/2TaYZu5 tmsnrt. A A PROSPEROUS DECADE Erdogan’s fledgling AKP came to power in 2002, following the country’s worst depression since the 1970s, on a pledge to end the mismanagement and recessions that had long frustrated Turks yearning for a better life. Then-prime minister Erdogan took advantage of the country’s economic recovery and a diplomatic shift toward the West to usher in a decade of prosperity. Poverty and unemployment rates fell dramatically. Inflation, which was in the triple digits a decade ago, has dropped to 5%, making the Turkish currency more appealing to both residents and tourists. Erdogan appeared impregnable. Things began to shift in 2013, when Turkey experienced enormous anti-government protests, and emerging markets around the world experienced a painful financial outflow as stronger economies gained traction. According to a Reuters research, that year was a turning point for per capita GDP, unemployment, and other economic indicators. In terms of foreign investment, 2013 was likewise a watershed year. According to official bond holdings figures and Turkey Data Monitor, tmsnrt.rs/3dYGn8i. Since then, the lira’s value has plummeted, reducing Turks’ worldwide purchasing power tmsnrt.rs/36ehjWv. See tmsnrt.rs/3dYGn8i for foreign investor holdings. tmsnrt.rs/3x6AXj1 tmsnrt.rs/3x6AXj1 tmsnrt.rs/3x6AX ISOLATION AND CRACKDOWN Many people were surprised when Erdogan’s government put down the Gezi Park protests in Istanbul in 2013. According to Ates Altinordu, assistant professor of sociology at Sabanci University, the crackdown “crystallized the AKP as the new establishment and indicated the popular tide was shifting against them.” Following the failed coup attempt on July 15, 2016, a harsh state of emergency was declared, according to analysts, driving Turks’ economic well-being farther south. “The AKP and Erdogan have sought to further expand authoritarianism since 2013, which has likely harmed the economy in different ways,” Altinordu said. “They began to make decisions in a more isolated and concentrated manner, with less media freedom. As a result, you’re more likely to make policy blunders, lose responsiveness, and leave a lot more possibility for corruption.” VOTER BASEOther important indicators, including as healthcare, have improved considerably since Erdogan entered power in 2003. Erdogan adopted free-market principles required to enter the European Union, which was then a primary AKP priority, as austerity imposed under a 2001-2 International Monetary Fund program eased. Turkey was hit hard by the global financial crisis of 2008-9, but it also drew a flood of investors looking for high returns in emerging markets. Cheap foreign loans fueled a construction-fueled economic boom, helping the AKP win eight national elections in a row. In a research for The Washington Institute, Soner Cagaptay said that Erdogan had a “base of adoring and loyal supporters (since) citizens enjoyed much better living standards than under Kemalists for most of the twentieth century.” He pointed out that when Erdogan took control, Turkey’s newborn mortality rate was comparable to that of pre-war Syria, and that it is now comparable to that of Spain. STRAINING ECONOMIC AND POLITICAL CONDITIONS Other indicators of happiness began to sag in 2013, when the Federal Reserve of the United States hinted that it could start reducing stimulus drained money out of emerging markets. Political tensions grew as Erdogan courted nationalist allies and eventually won a referendum to establish a presidential system that centralized power in his hands. In reaction to the power grab, some prominent economic leaders deserted the AKP. According to analysts, fissures began to appear in the government’s policies after that, including pressure on the central bank to decrease interest rates even as the lira plunged into crisis in 2018. Since 2013, the currency has lost 75% of its value versus the dollar, with more than half of that loss occurring in the last three years. Many Turks now want to keep their money in foreign currency. “On the political front, there has been a sense that Turkey and the West have been drifting apart since 2013,” said Roger Kelly, the European Bank for Reconstruction and Development’s top regional economist. “Yes, there has been a decline since 2013, but it must be viewed in the light of the previous positive steps.” See tmsnrt.rs/36ehjWv for currency depreciation. Jonathan Spicer contributed reporting, and Catherine Evans edited the piece./n
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