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Thursday, December 2, 2021

Garvan Walshe: Could Erdogan’s war on financial markets be his end?

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Garvan Walshe is a former National and International Security Policy Advisor to the Conservative Party.

Recep Tayyip Erdogan has dominated Turkish politics for 20 years with his instrumental attitude towards democratic politics. He took on the secular military establishment created by Attaruk, with the help of liberals weary of military influence.

He then crushed the Liberals allying with the Gulen movement (a Sufi cult, whose leader lives in exile in Pennsylvania).

And then he turned against the Gulenistas, after a coup in which he was convinced they were involved was on the verge of overthrowing him and plunging the country into a civil war.

In addition to the coup, which forced him to address the nation from a mobile phone as rebel warplanes attacked the capital, he has had a series of close political shaves.

In 2015, it lost its parliamentary majority thanks to the strong performance of the Kurdish HD party. But since the rebel opposition could not agree on how to replace him, he won new elections and gathered a majority with the help of the secular, but strongly nationalist (i.e. anti-Kurdish) MH party.

A referendum in 2017 to free him from parliamentary troubles by granting Turkey an executive presidency was narrowly approved with 51 percent of the vote. But he went on to win the presidency comfortably with a 20-point lead over his closest rival. The increasingly autocratic Erdogan has built himself a massive presidential palace and envisioned a vast canal west of Istanbul to rival the Bosphorus itself. Is your decidedly compelling position in sight?

Anyway, his touch has started to fade. He expected something similar to happen when an opposition candidate, Ekrem Imamoglu, won the 2019 Istanbul mayoral election, by a pinch of 14,000 votes, in a city larger than most European countries. .

Erdogan leaned on the country’s supreme electoral commission to force a replay, only to find that Imamoglu’s margin increased to 800,000. Ankara also fell to the opposition that year. His own AK party lost two of its leaders: former Foreign Minister Ali Babacan and a former Prime Minister, Ahmed Davutoglu, fed up with Erdogan’s one-man rule.

Support for parties in the ruling coalition is now 40%, compared to 50% for the main opposition groups. One even put his AK, long the largest, behind the secular and Republican center-left CHP. You would think that the last thing Erdogan needs is an economic crisis.

Yet it has been creating just that. Inflation was below 10 percent in 2016, and prices are now 40 percent higher than five years ago. The coin has collapsed. In 2016, 100 lire was worth $ 30. Now it is worth less than $ 10.

Normally, the central bank would raise rates to stop the slide, but Erdogan is against the high rates, which he attributes to a mysterious “interest rate lobby,” and has fired three central bank governors who raised them. Unsurprisingly, the lira is dropping like a junkie, and although government debt is relatively low compared to GDP (around 60 percent), it needs to pay off its debt in foreign currency, as only the investor most eccentric would put his money in one. objective of depreciation by the president of the country himself.

Some kind of savior arrived yesterday in the form of Mohamed bin Zayed, the crown prince of Abu Dhabi, with whom Erdogan has been trying to improve relations. Rumors of Emiratis’ investment halted the Lira’s decline, but they feel bad about Erdogan’s talk of economic “patriotism” and his dreams of dominating regional politics. The fact that Turkey (84 million inhabitants) will beg Abu Dhabi (1.5 million inhabitants) recently for its patriotic dignity.

Erdogan has survived defections from his own party, the loss of Ankara and Istanbul, a hung parliament and even a coup, mostly because of his utter cruelty.

His parliamentary defeat led him to escalate a war with the Kurdish minority (and give him an excuse to imprison his party leader). He instituted massive purges of the civil service and the army after the coup. He has kept philanthropist Osman Kavala in prison, after he was arrested again, Putin-style, on new charges immediately after previous ones were dropped. International financial markets are far more difficult to tame, and ordinary Turks feel the effects of their war against them more deeply than, say, their occupation of northern Syria.

The next elections are scheduled for June 2023, and the opposition is so imagining their chances that it is calling for them to run. Erdogan once compared democracy to a train, in which you get off once you reach your final destination. While it is always too early to rule out such a survivor, the ticket inspector is closing in and the lyre in your pocket is unlikely to cover the passage.

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