News this morning that an opposition Deva activist has been arrested on allegations of political espionage is worrying (Metin Gurcan). Deva is former AKP economic policy guru, Ali Babacan’s party. I think the news will be seen as a warning shot across Babacan and the opposition’s bows.
Lots of talk of early elections and I think it is now pretty clear what Erdogan’s re-election strategy will be – low rates, cheap currency, fiscal easing and lots of social spending to get social recipient benefits (8-10 million) voting AKP/MHP.
If the lira is sinking, fine, as the message is being sent that this will make Turkey a super cheap manufacturing hub at a time when in the new COVID era supply chains are being moved closer to Europe.
WATCH: Turkey Heading for Early Elections | Real Turkey
The lira might collapse and inflation surge but they will blame that on some foreign or opposition plot. They will argue that a economic war is being waged by foreigners against Turkey.
That’s bull, but some voters might believe it.
The problem I have with it is that it does not quite square. If you are blaming foreigners for waging an economic war but then trying to get FDI into the country because of the cheap lira, I am not sure foreigners can be so discerning. Are they the enemy or not?
It all feels very Chavez
Erdogan’s re-election chances? Someone who has had quality time with the boss told me this week it’s still 50-50, but that’s better odds than perhaps the polls are suggesting.
Net net there is still a path to victory here for Erdogan, but it seems based on a high risk economic strategy and a very nationalist vent with foreigners in the firing line. I just fear how much damage will be done to Turkey’s image and the economy in the interim. It’s kind of a torched earth approach.
These are authors personal views
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