Abused Turkish economy puts powerful Erdogan to the test

ISTANBUL – Ozgur Akbas helped organize a protest in Istanbul last month to protest what he calls unfair rules imposed on traders during the pandemic.

“There are a lot of friends who have closed,” he said in an interview. “And some are about to commit suicide.”

Turks have been struggling with declining currency and double-digit inflation for two years when the pandemic took place in March, sharply exacerbating the country’s deep recession. Nine months in, as a second wave of the virus sweeps through Turkey, there are signs that a significant portion of the population is overwhelmed by debt and increasingly hungry.

MetroPoll Research, a respected ballot box organization, found in a recent survey that 25 percent of respondents said they could not meet their basic needs. Mr Akbas said he sees it daily among his customers.

“People are on the verge of exploding,” he said.

For President Recep Tayyip Erdogan, who has attracted domestic and foreign attention this year with aggressive foreign policy and military intervention, things suddenly came to an end in November.

The government conceded that it underestimated the extent of the coronavirus outbreak in Turkey by not recording asymptomatic cases, and that new data indicated the levels of infection in the country.

The Turkish lira was hit by a record weakening – more than 30 percent against the dollar this year – and foreign exchange reserves were severely depleted. Along with double-digit inflation, the country is now facing a balance of payments crisis, Moody’s Investor Service recently said.

The crisis comes as Mr. Erdogan is on the verge of losing a powerful ally when President Trump leaves office next month. Turkey is already facing sanctions from the United States for the purchase of a Russian missile defense system and from the European Union for gas drilling in waters claimed by Cyprus. Mr. Trump has kept sanctions on Washington until this month.

Mr. Erdogan particularly slowly congratulated the elected president Joseph R. Biden Jr. with his victory. Analysts expect that a government in Biden will be stricter with the result of Mr. Erdogan on human rights and democratic standards.

Mr. Erdogan recently moved with a ruthlessness that is usually carefully hidden to deal with Turkey’s growing economy. He appointed a new head of the Central Bank, and then the finance minister of mr. Erdogan, who is also his son-in-law and heir, resigned as an objection, much to the president’s surprise by accepting the resignation and replacing him.

Then the president promised economic and judicial reforms, and even the possibility of freeing political prisoners – which some in his own party advocate to improve relations with Europe and the United States.

In mid-December, Mr. Erdogan announced a new aid package to lift small businesses and retailers for three months. Last weekend, he fell into a bakery to make purchases in proof of support for retailers.

But critics have criticized the different ways Mr. Erdogan described as too little, too late.

Former finance minister Berat Albayrak may have been a convenient scapegoat – little is known about what really came down in the presidential palace – but his dramatic fall in grace and total disappearance from public life suggests a more serious course correction. It seems that the economic downturn and the consequences for Mr. Erdogan’s own fate has become the biggest concern.

Mehmet Ali Kulat, who conducts opinion polls for political parties, among others for mr. Erdogan’s Justice and Development Party, said the president was holding opinion polls.

“What he pays particular attention to is how things are reflected in society,” he said. Kulat said.

Recent opinion polls show that the status of Mr. Erdogan’s AK Party has fallen to its lowest point in the 19 years it has been at the helm of Turkish politics, according to MetroPoll. The figure indicates that the party’s alliance with the Nationalist Movement Party will not succeed in assuring Mr Erdogan the 50 per cent of the vote to win a presidential election.

“The next election is not a slam dunk,” said Asli Aydintasbas, a senior fellow at the European Council on Foreign Relations. “The chances are high that he will lose unless he broadens his coalition or succeeds in appealing to people who voted for the opposition.”

“His chances of being re-elected are less than 50 percent,” she said. “Finally,” she added, the question is, “Is he smart enough?”

The MetroPoll survey found that a majority of Mr. Erdogan’s own supporters, and 63 percent of respondents in general, believe that Turkey is heading in a worse, rather than a better direction.

These figures are confirmed by what aid organizations see on the ground.

Hacer Foggo, founder of the Deep Poverty Network, a group that helps street traders and informal workers, said she had never seen such an emergency in her nearly 20 years of working to alleviate urban poverty in Turkey.

When the first lockout began in March, she received calls from people begging for help feeding their families. Street vendors and garbage collectors were particularly hard hit.

“When they say there is no food at home, it means there is no food at their neighbor’s, either,” she said.

Her network has helped 2,500 families in Istanbul and connected donors with families to buy groceries and diapers for children. Her voice cracked as she described a mother saying her baby had gone down in diapers.

“A baby needs to gain weight and not get smaller,” she said. Foggo said. Other women could no longer breastfeed because they had no food, she said, and more men were forced to hunt for all scarce food in the garbage.

“I’m 52 years old, and this is the biggest crisis I’ve ever seen,” she said.

The economic problems began before the pandemic, she said, but she blamed local and national governments for their lack of strategy to confront the growing poverty and not improve social services.

Indeed, the economic background took place after Mr. Erdogan has tightened his reins on the country, including the economy, by gaining new powers under a new presidential system inaugurated in 2018. International monitors cite these changes as a major reason for their alarm over the country’s economic leap.

“The weak and deteriorating government of Turkey is a major credit weakness, which has supported our decision to downgrade Turkey’s rating since the introduction of the presidential system by multiple notches in mid-2018,” Moody’s said in a report this month.

Mr. Akbas, the retailer of the tobacco shop, describes two elderly customers who entered his shop in an affluent part of the capital, Ankara, one week last week as an illustration of how badly inflation had hit the people.

One woman asked if she could buy a single egg. The second woman, who was neatly turned out, asked if he had free bread. Stunned, he fills a bag for her.

“Retirees are in a very bad situation,” he said. “What I hear from people is’ Enough is enough. We had it up to our necks, we can not make money, ‘and people in their 70s and 80s say they’re going to throw themselves in the street.’