The parliamentary and presidential elections held in Turkey on June 24 handed the victory to president Recep Tayyip Erdogan in the first round of voting. With a high turnout of over 87%, Erdogan, the leader of the moderate Islamist AKP party, won 52 percent of the vote, more than the 50 percent threshold, thanks to support from the nationalist MHP. There will be no need for a second round, which was scheduled to take place on July 8. Erdogan’s challenger, Muharrem Ince, leader of the Republican CHP party, received just 30 percent. As for the parliamentary elections, despite the arrests and cancellation of parliamentary immunity, the left-wing pro-Kurdish party HDP passed the 10% threshold and will be entering parliament again after it first joined Turkish deputies in 2015.
Erdogan and the economic crisis
“Turks have decided to stick with the status quo. The agreement between the AKP and the MHP completes the process of incorporating the AKP into the deep State, restricting parliamentary powers”, is commented Asli Vatansever, a Scholar Rescue Fund researcher.
On the eve of the elections, the economic crisis appeared very difficult to manage. The first reason for concern was the fall in the value of the Turkish lira and the corresponding increase in inflation. Erdogan allowed the Central Bank to intervene with a record increase in interest rates of over 300 points, which equated to a 16.5% increase in the cost of borrowing. The purpose of the intervention was to stop the dollar rising against the Turkish lira. This backward step by Erdogan in economic policy terms had an immediately positive effect on the foreign exchange market and the Turkish lira recovered 1% of its value in a few hours. The decision also marked the recognition of the important role of the Turkish Central Bank in the management of financial crises. In the month of May alone, the Turkish lira had lost 18% of its value against the dollar, bringing the total loss of value from January 2018 to 25%.
As if that were not enough, Turkish companies are highly indebted to foreign countries, with loans of 295 billion dollars. The main concern among financial analysts is therefore the returns on short-term securities, which pay a rate higher than those with longer maturities. In other words, international investors are not expecting a recovery of the Turkish economy in the near future.
This is happening against the background of a bilateral crisis in relations between Ankara and Washington following the decision by the US Senate to withhold delivery to the Turkish authorities of the F35s the country had been promised, for which it has already paid 800 million dollars. The US is worried about the support for Moscow and Teheran expressed by Erdogan after the recent meeting between the leaders of the three countries in Ankara which, among other things, also accelerated construction of the Turkish Stream.
The election move
Recep Tayyip Erdogan has achieved the success he hoped for. As a result of the constitutional referendum in 2017, the president will have extended powers and full control over the executive. Erdogan's decision to bring the elections forward by a year and a half could have positive effects on the serious financial crisis affecting the country, but it has already placed restrictions on dissent, pushing Turks to the polls and keeping up support for the AKP leader.