Putin’s predicament is Erdogan’s good fortune

On December 17 last year, police raids in Istanbul led to the arrests of 47 individuals in a case that involved accusations of corruption, fraud, money laundering, gold smuggling and bribery. Among those detained were three public officials who happened to be sons of the ministers of interior, economy and environment and urban planning.

After the mass protests in May and June 2013, the news of the raids came as a storm to the ruling Justice and Development Party (AKP). Recep Tayyip Erdogan was quick to react. A day later during a press conference, the then prime minister fired back: “This has both national and international aspects. Some collaborators in the country cooperate with some international circles to undermine Turkey‘s success. First they tried with the Gezi Park protests to topple us, and now with this dirty operation”.

Once more, Erdogan was placing the blame of AKP’s misfortunes on the Hizmet (the Service), known outside Turkey as the Gulen movement led by Fetullah Gulen, the Turkish Islamic scholar who lives in self-imposed exile in Pennsylvania. On this, as in many other, occasions he also denounced an international conspiracy, often referred to by AKP leadership as the “interest rate lobby”, allegedly aiming to undermine stability in Turkey.

While there is little doubt that a confrontation between the AKP and the Hizmet has been going on for some time, the foreign enemy argument remains puzzling, even in a country quite used to conspiracy theories and also to a history of very real backstage plotting.

The attachment to the foreign conspiracy theory is something Erdogan shares with Vladimir Putin. When Putin visited Ankara earlier this month, it was difficult not to notice an atmosphere of solidarity surrounding the talks between Erdogan and the president of Russia. The two are at odds with the West, over the years they have used their position to tighten their grip on power, and both have strong support at home despite complaints from political opponents about their autocratic tendencies and close ties to business groups. Recently, they have also been under more pressure than usual and they both know their countries’ economy can prove to be their weak spot.

Russia’s economy is going through its worst crisis since Putin has been in power (15 years), mainly due to plummeting oil prices and Western sanctions over Russia’s stance on Ukraine. On the other hand, Turkey as an energy-importing country is benefiting greatly from low prices. Energy imports have traditionally been the main factor behind Turkey’s current account deficits. In the beginning of the year, when the price of the oil barrel was around 110 USD, data from the Turkish Statistical Institute revealed that energy imports in 2013 amounted to more than 22 percent of total imports and 56 percent of Turkey’s trade deficit.

Especially now, very low oil prices is comforting news for Erdogan and the AKP. The witch hunt against the Gulen movement is back on full steam, concerns are rising about Erdogan’s efforts to extend the reach of the presidential office without the necessary constitutional changes, and the opposition is becoming more active in denouncing AKP’s nepotism. With a healthy economy, the AKP’s most important flagship, the ruling party seems to feel it has almost carte blanche to press forward with controversial actions that are unlikely to be punished at the polls.

Economic bonanza

But is the economic bonanza Turkey has experienced with AKP in power since 2002—with the exception of the 2008-2009 financial crisis that inevitably hit Turkey—guaranteed for the foreseeable future?

The attachment to the foreign conspiracy theory is something Erdogan shares with Vladimir Putin

Manuel Almeida

Despite low oil prices representing a great opportunity for deficit reduction, not everything is going smoothly. Unchecked corruption is holding back international and domestic investors and it is the state that has been filling in the gap. Last week, an Istanbul court denied the appeals to press forward with charges against all suspects of last year’s December raids, including the sons of the three former ministers. News of the court decision was followed by reports that the Turkish lira was hitting record lows against the dollar.

This year, GDP growth slowed down from 4.8 in the first quarter to 1.7 in the third quarter. In a global market obsessed with growth, these figures could not mean much if accompanied by long-term structural reforms, but the huge infrastructure projects and another wide privatization scheme planned by the government for next year are short term remedies.

Crucially for the AKP, possible bumps ahead will be felt by the average Turkish citizen. Latest unemployment figures were on 10.5 percent, the highest since February 2011. With the decline of foreign investment and the falling Turkish lira, the huge levels of private debt are feeding the theory that Turkey’s consumption boom could be a bubble.

The AKP and Erdogan are rightly credited by the electorate for presiding over a remarkable economic transformation, one of the most successful stories in emerging markets. The concern is how that mandate has been undemocratically interpreted. Erdogan seems to believe he will get his way as long as the economy holds on.

The question AKP leadership should be asking then is: where will oil prices be by next year’s parliamentary elections in June? By the looks of it, if the US shale boom does not turn into a bursting bubble in the meanwhile, global oil markets will be doing the AKP a big favor. So much for the foreign conspiracy theory.

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Manuel Almeida is a writer, researcher and consultant on the Middle East. He holds a PhD in International Relations from the London of Economics and Political Science and was an editor at Asharq Al-Awsat newspaper. He can be reached on @_ManuelAlmeida on Twitter.
 

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Last Update: Wednesday, 20 May 2020 KSA 09:44 - GMT 06:44
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