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Turkey’s knife-edge election

Turkey’s knife-edge election

Erdoğan key figure as political and economic uncertainty looms

by David Tonge in Istanbul

Wed 3 Jun 2015

Turkey’s general election on 7 June could reshape the country in two ways. It could allow President Recep Tayyip Erdoğan to sweep aside the last checks on his power. And it could open the way to resolving the bitter question of possible Kurdish separation.

The poll seems likely to be followed by acrimony and laborious coalition-building. The result will not benefit the Turkish economy, which – as a result of the current account deficit (4.2% of GDP in 2015 against 5.7% last year, according to the IMF) – remains vulnerable to the risk of capital outflows. Especially after the US starts to raise interest rates, possibly later in the summer.

Erdoğan’s economic miracle is fading. In 2012-14, GDP growth averaged 3.3%, well below the 5.3% of the first eight years of the Erdoğan government. Expectations are muted. Under Erdoğan, the construction industry has benefited. Other sectors have fared less well. The IMF and World Bank warn that Turkey must lower growth to curb the current account deficit.

Erdoğan is the key election figure. The central issues are Erdoğan’s vision for Turkey and his role in it. For the past three decades, on election by the National Assembly as head of state, Turkish presidents left their parties behind them. Erdoğan, the first president elected by popular vote, has conspicuously flouted the Constitution’s Article 101 on this.

Erdoğan has retained dominance over his Justice and Development (AK) party. Underlining the impotence of the institutions meant to ensure fair elections, he has openly supported AK as he tours the country. Ahmet Davutoğlu, his anointed prime minister, has run a well-funded campaign which has received far more air time and newspaper columns than the other parties.

Erdoğan’s overt dominance, irritating to many Turks, may not produce the result he desires. The stark choices caused by one of the world’s unfairest election systems are causing many voters to abandon traditional voting patterns. Any party with less than 10% of the vote is excluded from the National Assembly, the highest threshold in the world. Whether the pro-Kurdish HDP gets 9.9% or 10.1 of the vote will determine Turkey’s future path.

Without extra seats in parliament under the threshold rule, AK may not have enough power to rule alone. With the seats, it can continue single-party rule. If AK gets 330 seats, it may change the Turkish constitution, as Erdoğan wants, to elevate his post to that of executive president. He claims this is necessary for effective government. His opponents point out that he has defanged the armed forces, muzzled the press, and taken control of the judiciary. Erdoğan’s critics fear that his model is that of Russia’s Vladimir Putin, not of Barack Obama or François Hollande.

As a result of this voting rule, in the 2002 election the AK party took power with the addition of 102 seats which would have gone to parties which fell short of the threshold. This increased its share of the 550-seat Assembly from 47% to a crushing 66%. On the basis of opinion polls, HDP stands to win 50-55 seats on 7 June. If it fails to pass the threshold, almost all of these will go to AK.

The opinion polls have been giving AK 38-45% of the vote, well below its 49.8% in the 2011 general elections. Erdoğan’s core support is fracturing. Perhaps one-fifth of the electorate backs him solidly for lending shape and dignity to their Islamic sensibilities. Another sizeable portion supports him for his longer-term social and economic record. But more recent cracks in economic performance are a threat.

Another weakness concerns foreign policy. Erdoğan has no successes to flaunt. To the north, Ukraine remains on the boil. To the south are Iraq, Syria and the seething currents of the Arab world. Relations with Russia are strained. Erdoğan normally gets on well with Putin, who has announced that Gazprom’s South Stream gas pipeline would be rerouted through Turkey. But they have been at odds over Putin’s attendance at the centenary memorial to the Armenian genocide (a term the Turkish government refutes). Erdoğan refused to visit Moscow last month for the 70th anniversary of the victory over Hitler.

Erdoğan’s criticisms of Israel’s anti-Palestinian acts resonate well at home – though not in Washington. But his hands-on Middle East policies have backfired. His backing of Sunni movements such as the Muslim Brotherhood has cost him support in Cairo and the Gulf. By favouring opponents of Syria’s Bashar al-Assad, Erdoğan has contributed to the growth of the jihadist group Isis. Turkey has been the destination of around half of the 3.5m refugees from the Syrian civil war, a potent source of economic and social tension. There is no happy end in sight.

Three outcomes are possible on Sunday. The AK party could register a weak victory – with HDP in the Assembly and Erdoğan and AK at odds over economic policy. There could be a hung Assembly – with problems in economic policy. Or AK could sweep to another triumph and prepare for a constitutional referendum on the presidency. The Kurds would not be represented, and would clamour aggressively for fairer treatment. And Erdoğan would be pressing for unorthodox moves such as lower interest rates, against the advice of the central bank.

The debate will not end with the elections. June may be a long month in Turkish politics. The autumn could prove longer. Ali Babacan, deputy prime minister and a crucial economic policy-maker, will probably no longer be around to reassure investors. His friend Erdem Başçi, the central bank governor, may hand over the reins to a less proven figure. Domestic political and economic uncertainty, coinciding with rising US interest rates, could form an unpalatable combination of challenges.

David Tonge, a member of the OMFIF Advisory Board, is managing director of IBS Research & Consultancy.

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