As Turkey’s March 31 local elections draw closer, three key developments bear watching. All three are likely to significantly affect Turkey’s political and economic trajectory as well as its international standing.

Consumer Discontent

Local elections don’t usually attract the same level of domestic and international attention that Turkey’s elections have received this year. But the governing Justice and Development Party (AKP) has branded the March 31 vote as one that will determine Turkey’s fate and well-being. In addition, deteriorating economic conditions, including a depreciating currency and inflation, have heightened tensions in the country. Prices for some food items have increased by more than 300-400 percent, prompting President Recep Tayyip Erdogan’s government to mandate that state wholesalers in Ankara and Istanbul sell produce directly to consumers. Long lines of residents buying food at heavily discounted prices is reminiscent of the late 1970s, when Turks had to line up to buy staples such as butter, sugar and cooking oil. The government says the state will continue to sell produce wholesale until the local elections are held.

To further combat Turkey’s inflationary headwind, Erdogan has ordered state authorities to track prices and punish retailers who allegedly arbitrarily increase prices. To say that these issues have tarnished the reputation of the AKP and Erdogan would be an understatement. The AKP has consistently campaigned on the premise that it is the party of capable governance. The question remains as to whether food prices can be controlled, or even lowered, so that wider public discontent does not translate into votes for the opposition. The loss of large metropolitan municipalities such as Istanbul and Ankara would irreparably harm Erdogan’s image and weaken his power base.

Is a Bailout on the Horizon?

Turkey’s macroeconomic indicators are the second significant development to watch. The lira’s depreciation has placed an undue burden on the country’s private sector industries, many of which rely on imports to run their business. By July 2019, roughly $180 billion worth of foreign debt will come due, which equates to about one-quarter of Turkey’s entire economic output. Not only has this resulted in record numbers of Turkish companies filing for insolvency protection, it has required the government to take unprecedented measures to ensure liquidity and assure investors that Turkey can honor its debts. The prevailing economic opinion in Washington and European investment capitals is that these aims can no longer be met without direct international intervention.

Though Erdogan insists at public rallies that Turkey will never ask for another bailout from the International Monetary Fund (IMF), his tune is likely to change after the March elections, when Turkey may have to reach a standby agreement of about $150 billion just to keep the lights on. If this were to happen, the IMF would loan Turkey nearly double what it gave Argentina to shore up its economy. It is in the material interests of European banks and the United States to provide Turkey with the necessary funding to allay concerns of a recessionary contagion, as Turkey’s creditors have loaned generously and will have to satisfy their investor’s concerns that existing debts will be honored. There is also the question of conditionality. If the IMF is asked to bail out Turkey, what government accountability, transparency, anti-corruption and belt-tightening measures will it demand in return? It is hard to envision Erdogan satisfying some or any such conditions given the opaque, unaccountable and corruption-ridden government he perpetuates.

Relations With the U.S., Russia and Iran

Finally, Turkey’s interaction with the United States, Russia and Iran isn’t independent of its domestic economic concerns. Ever since the United States announced it would leave Syria, Erdogan has been keen to convince Russia and Iran of the need to establish a safe zone in Syria — one designed to undermine and prevent a Syrian-Kurdish entity that Turkey will have to reckon with. In Sochi, Russia, last week where he, Erdogan and Iranian President Hassan Rouhani met to talk about Syria, Russian President Vladimir Putin essentially put Turkey on notice that any Turkish demand for a safe zone in Syria would require the approval of the Syrian government. At this point, Russia and Iran are mainly concerned with eliminating challenges to the Syrian government’s ability to impose its sovereignty throughout the country. There is little reason to believe that Turkey will be granted any latitude to pursue Kurdish elements in Syria. If Erdogan is to participate in the reconstruction of Syria and be able to conduct border trade, he will soon have to resolve his differences with Syrian President Bashar al Assad.

Erdogan continues to tread on thin ice when it comes to the United States, and the Trump administration could impose significant measures that could compound Turkey’s economic degradation. Erdogan’s support of the ailing government of President Nicolas Maduro in Venezuela is demonstrated by the large volume of Venezuelan gold Turkey is purchasing. Turkey watchers are concerned that this gold could once again be used to buy Iranian oil and breach U.S. sanctions. Were this to occur, there is good reason to believe the United States could make life very difficult for Erdogan by withholding IMF funding or imposing crippling sanctions, among other possible measures. Turkey is fast running out of options as the March 31 elections approach, despite appearances otherwise in Erdogan’s public speeches. Even in a limited and transactional manner, it is incumbent upon the Erdogan government to collaborate with the United States on a number of issues: to renounce its S-400 missile defense deal with Russia; put a visible distance between itself and the Maduro government; and release Americans it currently detains. Each of these issues will have to be confronted eventually. It makes sense for Turkey to resolve them now before they are dangled in front of Erdogan as conditions that must be met before Turkey can secure an international bailout.