The AKP’s Thirst for Power Risks Leaving Turkey High and Dry

Editor’s Note: This assessment is part of a series of analyses supporting Stratfor’s upcoming 2019 Third-Quarter Forecast. These assessments are designed to provide more context and in-depth analysis on key developments over the next quarter.

On March 31, it looked as if the Republican People’s Party (CHP) had successfully wrenched Istanbul’s mayorship from Turkey’s ruling Justice and Development Party (AKP) party, which has held the economically and politically powerful position for nearly two decades. But despite securing nearly 14,000 more votes than its rival, the CHP’s victory was short-lived. After the results were announced, the AKP was quick to allege election fraud, resulting in the decision to rerun the election. Should it face another loss in the June 23 revote, the party is likely to repeat the tactic — laying bare just how far the AKP will go to secure control over the city.

Though perhaps more importantly, the AKP’s loss of the March 31 mayoral race might eventually serve as a “canary in the coal mine” for the party’s waning national popularity and increasingly tenuous place in power, with the CHP’s candidate even capturing the attention of electorates once considered AKP strongholds. Thus, there is no doubt that the AKP is looking at the June 23 race with the 2023 presidential race in mind, as well as the threat that the CHP presents to its continued political dominance. Facing this existential predicament, the AKP will serve up more helpings of the nationalist rhetoric and populist policies that have historically served it well. And while this approach may temporarily stave off the party’s exit in the coming months, it carries with it the risk of causing more permanent damage to Turkey’s already fragile economy and foreign relations.

The Issues Behind the AKP’s Predicament

The AKP’s promise of a new approach to Turkey’s economy, which had endured a decade of financial fragility in the 1990s, is what initially vaulted the party to power nearly 20 years ago. Thus, the country’s current precarious economic picture is a problem for the party now. Steep corporate debt, combined with stubbornly low consumption, has cooled business activity in the country. And while it’s dropped from a 2018 peak, inflation remains high at over 18 percent, as does national unemployment at 11 percent. In May, Turkey reported record exports, though this seemingly positive data is tempered by the fact that the spike was due to the low value of the Turkish lira. Some voters, frustrated with the country’s slowing economy, have unsurprisingly blamed the ruling party. And this sentiment was a large reason why the AKP lost several key local government posts in recent months, including the Istanbul mayorship.

Back to Square One

Facing the threat of waning support and the difficult mayoral contest in Istanbul, the AKP is now clinging to nationalist politics and populist economic policy — both of which have proved popular with the AKP’s electoral base. In doing so, the party will continue to rely on its long-held message that only the AKP can secure Turkey’s national interests at home and abroad, helping it to maintain control over the government directly following the June 23 election, regardless of its outcome. However, in the long term, the “Turkey-first” rhetoric and actions risk further complicating the country’s financial situation and foreign relations.

Defending Ankara’s national interests among stronger powers like the European Union and the United States will help the AKP-led government shore up its domestic political power by playing up its patriotic appeal. In July, U.S. President Donald Trump could possibly visit Turkey to discuss the two countries’ divergent national policies over issues such as Russia’s global influence and the Syrian conflict. But under the AKP’s renewed nationalist bent, Turkey is bound to prioritize its national interests over any compromise, and will instead insist on its preferred positions — no matter how unpalatable to Washington. However, stoking any kind of diplomatic conflict with the United States risks harming the economy by placing Turkey at risk of facing U.S. sanctions and tariffs — as it did last year.

In its push for power, the AKP will also continue to promote its traditionally harsh policies against Turkish Kurds. With an eye to preserving Turkey’s national security in the face of Kurdish militancy inside and outside Turkey’s borders, this hard-line stance, which has worked in the party’s favor in past elections, could yield some electoral wins in the short term by rallying the AKP’s base. However, a hard push against pro-Kurdish political parties, such as the Peoples’ Democratic Party (HDP), will alienate new voters, Kurdish voters, or disillusioned AKP supporters who are losing faith in the party’s domestic policies. As a result, the ruling party may be forced to recalibrate its approach to its relationship with Turkish Kurds. And indeed, there are signs it may already be doing so, with reports that the AKP is considering pragmatic talks with Abdullah Ocalan, the long-imprisoned leader of the Kurdistan Workers’ Party militant group, for the first time in nearly a decade.

The AKP will also continue to deepen Turkish anti-Kurdish militant operations in Iraq and Syria, despite Europe’s concerns about the encroachment of Turkish influence in the Levant at the expense of Kurdish determinism, as well as U.S. support of Kurdish troops to fight the Islamic State. Thus, such an emboldened anti-Kurdish approach to fan the nationalist flames at home risks of harming Turkey’s reputation abroad.

Similarly, the AKP will play up Turkey’s oil and natural gas exploration activity in the Eastern Mediterranean to promote nationalism as well. But this too will no doubt ruffle the feathers of the West. In the coming months, Turkish exploration will take place in the Turkish Republic of Northern Cyprus’ claimed economic exclusion zone (EEZ), which overlaps with Cyprus’ own EEZ. Brussels, meanwhile, supports Cyprus’ claim to the area, as does the United States.

Long-Term Pain for Short-Term Gains

To garner support among Turks, the AKP will also pursue short-term populist policies to help weather a tough summer of recession-like conditions. This will likely include food subsidies that will further depress what Turkish farmers can expect for their goods, as well as strong-arming retailers and businesses into using the lira for their transactions instead of U.S. dollars.

However, getting the Turkish economy up and running again will likely require a period of painful structural reforms and austerity measures — not quick-fix solutions. A more secure electoral position would give the government more leeway to embark on such sweeping reforms. But facing the potential loss of the Istanbul mayoral position come June 23, the AKP knows it has to weather the political blowback of pursuing unpopular measures such an overhaul would entail. Thus, the AKP will instead opt to zero in on its tried-and-true playbook of nationalist policies in the coming months, as it grasps to retain what power it has left to stave off electoral challenges in 2023. Yet this short-term strategy will ultimately be short-sighted by creating even worse conditions for the economy, and more problems for the government to fix.