Erdogan, on the ropes for his heterodox management of the economy | International

President Recep Tayyip Erdogan’s controversial economic management has pushed the pound down to record levels, worsening persistent inflation in the country and undermining the basis of support for the Islamist leader after 19 years as Turkey’s head. His approval is waning, and opposition figures (like the mayors of Istanbul and Ankara) are overtaking him in popularity, increasing the chances of political change in the near future.

That of “Every time he speaks, bread rises” could literally apply to Erdogan. On Wednesday, as he advanced in his speech to the parliamentary group, specifying his intention to “carry through” his fight against high interest rates, the pound lost value. The more the Turkish leader spoke and the more he delved into his heterodox theory that high interest rates are the cause of rising prices, the more the price of Turkish currency collapsed. On Thursday, another sign that it has become an institution that limits itself to following the president’s designs, the Central Bank lowered interest rates to 15%, further lowering the exchange rate of the lira against the dollar and the lira. ‘euro. and, with it, worsening the outlook for runaway inflation (20% according to official statistics, more than double according to alternative calculations), since Turkish industry and even agriculture must import foreign currency inputs in order to be able to produce.

As members of the Justice and Development Party (AKP) applauded their leader’s speech, one person from the bench notably stood with folded arms: Finance Minister Lutfi Elvan, about whom rumors of a possible resignation, because contrary to the monetary policy imposed by Erdogan. This week alone, the pound is down 9% and is trading at a third of its February value. The plan, some local analysts say, is for a cheap lira to serve to boost exports and for this export boom to end up positively affecting the rest of the economy. However, large macro numbers do not make themselves felt at street level.

Difficulties due to the increase in the cost of living

Metropoll polls indicate that 72% of Turks suffer “a lot of hardship” due to the rising cost of living and 22% say high inflation affects them negatively but for the moment “not unbearably”. 80% of those surveyed say they have problems with their electricity, water and gas bills.

The gradual loss of purchasing power affects the entire population but especially those who live on just enough: the few who can save do so in gold, dollars or euros, which allows them to keep or even increase their wealth, thus widening the inequality gap. Unsurprisingly, the economy is the number one issue cited by Turks in all polls. According to the demographic company AREA, 72% of voters consider the government’s economic policies to be a “failure”.

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The sectors harmed by economic mismanagement are more and more numerous. Unions are lending themselves to a fierce battle in next month’s negotiations over the minimum wage review and the country’s main employer, TÜSIAD, is increasingly open in its criticism of the government.

Even in the government domain. “He enriches his friends in construction while the rest of the country is impoverished,” privately criticizes a journalist from a pro-government media. And a source from an opposition-linked channel, which until now had serious financial problems due to a boycott of advertisers at the request of the executive, admits that the television has started to receive large injections of advertising. ‘money thanks to the advertising of more and more companies, some of which are close to the AKP, example that some players are diversifying their bets in the face of a possible turnaround.

The absence of protests or social unrest can be misleading. Virtually all attempts at protest were quickly put down by the police. But it also takes away from the Government an essential thermometer to know how the streets breathe.

Throughout his career, Erdogan has been very adept at capturing the sentiment of the majority and using it to his advantage. No leader is able to stay in power for two decades with large doses of approval if he is not able to do so. However, this political nose begins to fail him.

His former aides have complained for years that those who currently advise Erdogan are unable to contradict him and, in their conversations with the president, paint a rosy picture of the country on him. An anecdote recently published by the British newspaper Financial Time it serves to illustrate the gradual loss of contact of the Turkish leader with the reality of the country. A member of the ruling party tried to alert Erdogan to the growing public unrest over the economic situation and he reacted angrily: “You are lying. I know the streets better than you ”. Therefore, his current squad would rather keep the president in the dark than risk losing his job.

Voting intention

Last week, Temel Karamollaoglu, the leader of a small Islamist opposition group, was called to the palace to meet with Erdogan. At the end of the meeting, Karamollaoglu explained to the press that the president “is happy with the progress of the country” and “considers that the people are also happy”. For Erdogan, the only problem is the current presidential election system, which requires collecting more than 50% of the vote in the first or second ballot. While this is a threshold inherent in presidential regimes like the one he insisted on establishing in Turkey, some members of his party have proposed lowering it, which the opposition says is a sign that the government fears losing power in possible elections. .

For the first time, polls place the opposition coalition (made up of the Social Democratic Party CHP, the right-wing IYI ​​and the Islamist SP) with a slightly higher voting intention than the ruling coalition (Erdogan’s AKP and the far right MHP party). ), although both receive around 40% of the support. The rest of the electorate opts for parties also opposed to Erdogan, although they are not integrated into coalitions. In addition, in the competition for the post of president, several possible opposition candidates outnumber Erdogan in intention to vote. So this week, driven by the pound crisis, opposition leaders called for early elections.

But the elections are set for June 2023 and Erdogan has repeatedly stressed that there will be no electoral advance. He also has no reason to do so, given the situation. The question is whether the forces that support him in power – both political and social: certain businesses, segments of the population, religious organizations and interest groups – will remain until then.

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