Turkish unrest grows as Erdogan’s ‘economic war’ hits cost of living

As Turks fretted this week about the plummeting lira and the soaring cost of living, they received some startling advice from an MP from president Recep Tayyip Erdogan’s ruling party: simply eat less.

“Let’s say that, in normal circumstances, we eat one or two kilos of meat per month. Let’s eat half a kilo,” Zulfu Demirbag said in remarks that made the headlines on Tuesday as the currency fell as much as 15 per cent against the dollar. “If we buy two kilos of tomatoes, let’s just buy two tomatoes,” he continued, echoing the narrative of Erdogan by calling on the public to join the resistance against shadowy forces striving to undermine Turkey.

Such conspiratorial rhetoric may still work on a hardcore of loyal supporters of Erdogan’s Justice and Development party (AKP) who see the president as a powerful leader battling to assert Turkey’s rightful place in the world order. But for most of the public it is wearing thin.

Column chart of Annual % change against US dollar showing Turkey's lira in historic retreat

“There is a core group of people who would vote for the party and Erdogan no matter what,” said Sinem Adar, an associate at the Centre for Applied Turkey Studies in Berlin. “But the [AKP] constituency is getting more and more discontented about the policies and the government. There’s a steady decline since September in more or less every reliable poll.”

Turks were caught between horror and bewilderment as they watched the lira slide after the country’s central bank, under Erdogan’s orders, cut its benchmark interest rate for the third month in a row despite inflation that officially stood at 20 per cent last month. The lira is down more than 20 per cent against the dollar since the start of November. Its downward spiral accelerated after the president declared on Monday that the country was fighting an “economic war of independence” akin to the country’s liberation struggle in the 1920s and suggested that further rate cuts would come.

Technology company Apple halted online sales in Turkey on Tuesday as the currency fell through the thresholds of 11, 12 and then 13 to the dollar, making it impossible for producers to price their products. “When I got into the elevator the dollar was 11.55. When I got out it was 12.15,” one young Istanbul lawyer said in a tweet that quickly went viral.

As they followed the turmoil from afar, many international investors predicted that Erdogan would eventually agree to a sharp hike in interest rates to stop the currency’s fall, as he did during the last major currency crisis in the summer of 2018.

But Turkish observers doubted the president was unhappy with the currency’s plunge. “I don’t think this is the result of ignorance or a ‘crazy’ move just for the sake of religious beliefs,” said Ibrahim Turhan, a former AKP member of parliament who is now part of a breakaway party. “This is, in my opinion, a calculated policy change.”

Erdogan, who has ruled Turkey for close to two decades, suggested as much himself, arguing this week that “a competitive exchange rate opens the way to strong investment, production and employment”. Opposition parties responded by accusing the president of “treachery” for his apparent indifference to mounting hardship in a country whose reliance on imports means that each drop in the lira pushes up the cost of basic goods.

Analysts were left wondering how much further the president, who built his early political success on the back of rising national prosperity, was willing to let the currency slide — and what the consequences would be for his political future if, as some economists warn, the depreciation ushers in hyperinflation of 30 per cent or more.

Erdogan and his ally Devlet Bahceli, the leader of the ultra rightwing Nationalist Movement party (MHP), have rejected growing opposition calls to pull forward elections that are scheduled for 2023.

“I keep asking myself whether the alliance will be able to survive until 2023 given that it’s weakening very rapidly,” said Adar. “What if it suddenly collapses? If the MHP or the security apparatus withdraws its support from the ruling alliance?”

Others say that the pressure is more likely to come from defections within the ruling party. “You don’t want to be an AKP MP when the ship is sinking, especially if you’re not in the inner circle,” said Can Selcuki, director of the Turkiye Raporu polling agency.

While life this week largely carried on as normal in a country that has lived through countless terror attacks, a coup attempt and multiple bouts of financial turmoil over the past six years, there were small signs of growing disquiet. Queues formed at some petrol stations in anticipation of price rises. Small protests, some of them organised by the Turkish Communist party, led to arrests in Istanbul and Ankara.

Selim Koru, an analyst at the Ankara-based think-tank Tepav, said that Erdogan would use force if larger numbers took to the streets. “His supporters are a minority now, and they are losing ground,” he said. “He’s going to be more and more scared of protests.”

Some opposition voters think the Turkish president, who has adopted increasingly authoritarian tactics in recent years, could seek to postpone elections or even cancel them altogether if it looks as if efforts to bolster his support through legitimate means fail to bear fruit.

Members of the opposition Republican People’s party (CHP) voiced fears at a meeting of the group’s executive committee on Thursday that the Turkish president could declare a state of emergency.

One senior opposition official played down those concerns. But he added: “When we think about the government that is running this country, nothing is impossible.”

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