Foreign Policy:  Turkeyʼs Opposition Can End the Countryʼs Economic Crisis

As Turkish President Recep Tayyip Erdoganʼs power weakens, the Turkish economyʼs crisis deepens. Since the end of 2012, the Turkish lira has lost more than 80 percent of its value, the worst slide in the developing World after the Argentine peso.

In its failed attempt to prop the lira up, Ankara opened the money spigot and blew through more than $128 billion in foreign exchange reserves, which many respectable economists now believe to be in the negative. In less than two years, Turkeyʼs Central Bank cycled through three governors.

For Turkish citizens, the prices keep rising. Inflation neared 20 percent in September. According to Turkeyʼs largest trade union, more than 7 million minimum wage earners face hunger. Polls show that almost two-thirds of the Turkish public is struggling to make ends meet. Turkeyʼs best and brightest are emigrating in droves, even though the labor minister thinks theyʼre leaving not because thereʼs anything wrong in the country but because theyʼre free-spirited adventure-seekers.

While crony companies receive billions of dollars in tax amnesties, average citizens buying an imported car are paying almost three times its original price in indirect taxes, which account for half of Turkeyʼs public revenues and fall mostly on small businesses and salaried workers Like a frog in boiling water, Erdoganʼs government appears unfazed by the economic maelstrom that threatens to be its undoing. For rising prices, their culprit is the greedy supermarket chains. The solution? The government will open up 1,000 grocery stores of its own to sell produce directly from the state-owned agricultural cooperatives, as Erdogan announced earlier this month, not knowing that the store where he posed smilingly for cameras was actually pricier than the supermarket chains he has been bashing.

Top officials in Erdoganʼs Justice and Development Party (AKP) are extolling on live television the virtues of hunger as a means of self-discipline, which even the Prophet Muhammad exercised. All the while, a new corruption scandal is erupting almost every week, and the extravagant lifestyles of AKP scions are getting exposed on social media  Not surprisingly, many citizens are rooting for a change. In March 2019, they already sent the government a strong message by electing opposition candidates as mayors in five of Turkeyʼs seven largest cities. Polls show more than half of the public is expecting Erdogan to lose in the upcoming elections, including one-quarter of AKP supporters and almost 40 percent of those supporting Erdoganʼs coalition partner, the Nationalist Movement Party


Change is in the air—more than ever before

A key element of this shifting momentum is the rise of a new style of politics that articulates a positive vision for the country and gives primacy to reason over emotion, compromise over conflict, and unity over division. Turkeyʼs political custom is for the pious, the seculars, the Turks, and the Kurds to sort themselves apart as opposed to uniting around their shared interests.

Erdoganʼs Kulturkampf that reduced the country to an us-versus-them binary also glossed over leadership lapses and ineffective management in every area from the banks to the barracks. Now, a diverse coalition, including ex-AKP renegades and secular nationalists as well as moderate Kurds and left-wing progressives, are putting their differences aside to unite around the common cause of more democracy, a better economy, and a return to normalcy.


Gone is the aura of invincibility that surrounded Erdogan and the electric atmosphere that characterized his rallies


Instead, opposition leaders are attracting enthusiastic crowds and making headlines. Everywhere they go, voters voice the same concerns: Fresh college graduates canʼt find work, white-collar professionals seek opportunities abroad, minimum wage workers and pensioners struggle to make ends meet, small business owners are barely staying afloat, investors are losing their confidence in the economy, and parents are worrying for their children. It appears empty fridges and slimming wallets are powerful enough to bridge old political and ideological divisions.


It is no easy feat to undo the legacy of the AKPʼs ambitious campaign to reshape Turkish society to its liking and extend its influence over every aspect of economic, political, and cultural life. A recent survey by respected pollster Metropoll found the public is evenly split on the question. Even among opposition supporters, 1 in 5 people are worried the task may prove too difficult to pull off  Turkeyʼs big-tent opposition has detailed plans to lift the country out of its current crisis and has the people to carry those plans out.

Indeed, the opposition boasts some of the countryʼs finest legal, economic, and political minds—including veteran economic officials and world-renowned academics. The first order of business is to reverse the imperial presidency, which is the root cause of Turkeyʼs malaise as it places all power in the hands of a single man, reduces the parliament to a rubber stamp for his decisions, and leaves an entire state captive to his whims and temper.

The oppositionʼs six parties are already discussing the details of how this will be done.  Despite leading in the polls, Meral Aksener, leader of the center-right Iyi (Good) Party—of which we are members—has ruled herself out of the 2023 presidential race and declared her intention to seek the prime ministerʼs  office after leading the charge on ambitious reforms—including reducing the president to a ceremonial role; restoring the legislatureʼs powers; expanding democratic oversight; and bolstering judicial independence regulatory autonomy, and merit-based recruitment in the public sector.


WATCH:  How Erdogan is Destroying Turkish Economy ?


The opposition is also working hard on market-minded, forward-looking reforms


Some of its proposals are refreshingly creative and surprisingly workable. For example, the opposition is planning to increase public revenues by one-third using a blockchain-based, real-time fiscal data monitoring system that equalizes the tax burden and reins in the informal economy, which currently accounts for more than one-quarter of economic activity and is one of the largest in the Organisation for Economic Cooperation and Development.


Using these additional resources, it will be possible to hire 100,000 new teachers, offer start-up grants to 5,000 new businesses annually, give a monthly allowance to 2 million low-income young people, eliminate taxes on car sales, slash the gasoline tax in half, abolish age limits for workers who have completed their retirement contributions, and fund at least two infrastructure mega-projects every year.


WATCH:  Turkish Opposition is Marching to Power | Real Turkey


Another proposal vows to eliminate child poverty by providing free breakfast and school lunches to 250,000 preschoolers and 2 million schoolchildren while creating more than 300,000 well-paid jobs, many of which will be reserved for women. While Erdoganʼs government appears stuck in its old ways, the opposition is revitalizing the policy conversation with bold and innovative ideas, from a universal basic income for youngsters to a new industrial policy, including a nationwide plan for symbiotic production clusters and a completely revamped research and development infrastructure modeled after Germanyʼs Fraunhofer Institutes.



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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.