Will Turkey’s inflation crisis damage Erdogan’s re-election chances?

It was telling that Erdogan focused on economic promises when he finally launched his presidential election campaign on April 11, more than two weeks after the secular CHP’s leader Kilicdaroglu. “We’ll bring inflation down to single digits and definitely save our country from this problem,” President Erdogan told his supporters at a stadium in Ankara.

Turkey does indeed need saving from inflation. While growth is robust, the most recent official statistics show inflation running at over 50 percent year-on-year in March, after it reached a quarter-of-a-century peak at over 85 percent in October.

Few doubt that the real figures are much higher: “It’s very clear that the government has been playing with the numbers; the real experience of everyday citizens is considerably more dire,” said Howard Eissenstat, a Turkey specialist at St. Lawrence University and the Project on Middle Eastern Democracy in Washington, DC.

The Turkish lira fell to an all-time low against the dollar in March – the latest of its periodic collapses in the currency and inflation crisis that has racked the Turkish economy since 2018.

Experts blame the crisis on Erdogan’s belief – against all economic evidence – that high interest rates fuel inflation, which has prompted him to cut rates when tight monetary policy is needed to reduce inflation.

‘Really dire’

All this marks a colossal change from the economic outlook in the early years of Erdogan’s rule, back when the Western commentariat lauded him as a forward-thinking reformer.

Erdogan’s moderate Islamist AKP party pulled off an extraordinary feat in the 2003 Turkish elections, overcoming the secularist hegemony cemented in the 1920s by the founder of modern Turkey, Mustafa Kemal Ataturk. The 2001 Turkish economic crisis was a major factor behind the AKP’s victory – and when Erdogan became prime minister in 2003, he set about reviving the economy and turning it into a powerhouse.

Bolstered by IMF support and buoyant conditions in Europe, Turkish GDP growth averaged 7.2 percent from 2002 to 2007. Many voters in Erdogan’s core constituency – working-class, socially conservative Muslims in the heartlands of Anatolia, the Asian part of Turkey – joined the ranks of the middle class.

But over the past five years, the inflation and currency crisis has affected all segments of Turkish society, from Istanbul’s Europhile bourgeoisie to pious, working-class voters in the Anatolian heartland.

“The daily lives of Turkish citizens are being squeezed in very fundamental ways,” Eissenstat said. “People who think of themselves as middle-class are having tremendous difficulty maintaining a basic standard of living. And for the vast majority of Turks who live week-to-week and month-to-month in the best of circumstances, the situation has become really dire; just putting food on the table has become a major struggle.”

Unreliable polls?

Polls suggest the president is losing support in the current economic context. Erdogan and the AKP repeatedly sailed to re-election over the past twenty years – but the latest survey by Mediapoll puts Kilicdaroglu slightly ahead for the first round, at 42.6 percent compared to 41.1 percent for Erdogan.

“I want change,” Selman Deveci, a voter in Konya, a traditionally AKP-supporting territory in the Anatolian heartland, told the Financial Times. “They’ve screwed the economy.”

But Deveci was not impressed with the opposition either: “I don’t have faith in them.”

Analysts say this attitude of disillusionment with Erdogan but scepticism towards the opposition looks to be quite widespread – casting doubt on Kilicdaroglu’s lead in some polls.

“I’m not sure I’m very trusting of the polling,” Eissenstat said. “A lot of outside observers tend to just assume that … because the economic situation is bad, people will jump ship – but not necessarily. I suspect a fair number of AKP voters will return to them, after flirting with the idea of doing something else.”

After all, many Western observers underestimated Erdogan the last time around, in 2018 – expecting then-CHP leader Muharrem Ince to push the president into a second-round runoff after a spirited campaign. Ultimately, Erdogan clinched the necessary majority in the first round with 53 percent, winning 10 million more votes than Ince.

Culture war

The economy’s consequence in determining elections is one of the oldest rules in politics, most famously encapsulated by the cliché “It’s the economy, stupid!”, a mantra for staffers created by Bill Clinton’s campaign strategist James Carville during the successful challenge to George HW Bush for the US presidency amid 1992’s deepening recession. But not every electoral campaign takes place in the kind of context the US had in 1992, when pervasive political tribalism was confined to its past and future.

A fissure has run through Turkish society ever since the early 1920s, when Mustafa Kemal Ataturk severed the profound links between Islam and politics that characterised the Ottoman Empire.

After coming to power, Erdogan slowly but surely brought Islam back into the heart of Turkish public life, eroding the power of Kemalism (so named for the secular philosophy espoused by the republic’s founder) and the “deep state” military-judicial nexus that had long buttressed it.

The anger of Turkey’s largely metropolitan secularists attracted international attention during the 2013 Gezi Park protests in Istanbul – but Erdogan retained his popularity among his millions of supporters in the Anatolian heartland, many of whom welcomed his triumph over the old establishment.

This cultural divide has many different characteristics from those seen in Europe and the US. But “culture war stuff matters in Turkey as it does in the West”, Eissenstat underlined.

And the technological changes of the last decade are amplifying this phenomenon, he added: “In a world of social media – of experiencing the world through news sources of our political choosing – political identification and ideology play a greater role in voting behaviour than before, as we’ve seen not just in Turkey but France, the US and the UK.”

All that said, as the presidential candidate uniting a heterogenous bloc of opposition parties, Kilicdaroglu has adopted a far more pragmatic stance on Turkey’s culture wars than his CHP predecessors.

Last year, Kilicdaroglu shifted the CHP’s position on women’s headscarves, a totemic issue in Turkish politics. Ataturk had discouraged the wearing of headscarves in the 1920s and his successors gradually introduced explicit bans applying at public institutions, which Erdogan then reversed in several stages.

Not only did Kilicdaroglu say the CHP had “made mistakes in the past” by supporting headscarf restrictions, he also endorsed a constitutional amendment upholding women’s right to wear it.

This strategy will make it easier for Kilicdaroglu to emphasise the economy, suggested Ozgur Unluhisarcikli, director of the German Marshall Fund’s Ankara bureau. “The culture war is the main driver of Turkish politics, but not the only one,” he said. “Kilicdaroglu has softened the impact of polarisation with his conciliatory discourse. Therefore the economy will play a more significant role than usual in these elections.”

Return to orthodoxy?

Kilicdaroglu’s economic platform is a return to orthodox monetary policy and central bank independence. Beyond that, the opposition has avoided getting into the nitty-gritty details of economic policy.

But while it is a simple answer to the inflationary crisis, returning to economic orthodoxy is not such an easy sell for the Turkish opposition.

“The opposition is promising a return to confidence and normalcy, but their problem is that confidence and normalcy requires short-term pain,” Eissenstat noted. “That means they’d rather keep the conversation about how Turkey got into this mess, keeping the election as a referendum on Erdogan, without too many questions about what the opposition in power would look like.”

“Providing economic confidence and returning to governing fundamentals is what Turkey needs,” he concluded. “But it wouldn’t necessarily be popular or easy.”