Turkey Elections: The Damage of Mutant Neo-liberalism of AKP – Anıl Kemal Aktaş
Decades long neo-liberal economic models and the automatic rule of Erdogan have dearly damaged the Turkish economy and people’s welfare, key May 14 elections may provide a chance to move from neo-liberalism thanks to the increasing role and required strength of a leftist political spectrum.
This article was originally published in the Observatoire de la Turquie contemporaine.
Turkey’s elections on May 14 are a vote on president Recep Tayyip Erdoğan — but also on the country’s economic model. Erdoğan’s autocratic rule has always combined neoliberal principles with a peculiar brand of cronyism. Yet, even the opposition manage to oust him, structural problems will remain. The question for the Left is how to reshape Turkey on the wreckage left by his administration.
Quicksand
Turkey is surely a deeply unequal country. The World Inequality Report reveals that the poorest 50 percent of the population holds under 1 percent of total household wealth. This equates to millions of people’s debts outweighing assets, while the richest 10 percent holds 61 percent of the total. According to some reports, Household Debt in Turkey will reach $82.6 billion by 2023. Meanwhile, the national wealth is constantly transferred to the richest groups through financial guarantees provided by the public sector to capital owners in order to prevent currency shocks. In recent months, inflation has skyrocketed, resulting in a child poverty crisis, with one in five children today unable to access adequate and nutritious food and one in four children going to school hungry.
Turkey’s low Rule of Law Score (117 out of 137 countries) and Corruption Perceptions Index (101 out of 180 countries) highlight societal asymmetry. In Turkey, citizens are left alone in a spiral of massive debt, lawlessness, and authoritarian politics, often directly tied up with corruption. Justice and Development Party (AKP) has always been a neo-liberal party, following the pattern of the last three decades of Turkish political and economic direction but Turkey’s neo-liberal model is a mutant one. Financialisation is supported by authoritarian practices of the current government (e.g., the Wealth Fund is exempt from the Court of Accounts audit) that funds the crony capitalistic networks . One illustration of this situation comes in the form of ex-finance minister Berat Albayrak, who is also Erdoğan’s son-in-law.
He was appointed to lead the Turkey Wealth Fund, which engaged in controversial transactions and investments with companies closely linked to the ruling AKP party until his resignation via Instagram. This resignation declared amid internal turmoils fueled by debates surrounding the foreign exchange crisis, inflation anomalies resulting from unorthodox monetary policy methods that is ended up with Turkey’s Central Bank spent $128 billion in reserves in a year to prevent a currency crisis under the directives of Erdogan and Albayrak. The confrontational rivalries within the ruling party were not limited to economic policies but also extended to the race for dominance within the party, as seen in Albayrak’s previous conflicts with the Interior Minister.
Albayrak’s brother heads a major media group, while another son-in-law of Erdoğan owns a defense company, Baykar Technology, producing unmanned aerial vehicles with strong government supported and praised through the AKP’s propaganda. A former media boss, Ethem Sancak, formerly close to Erdoğan and an executive board member of the AKP, was awarded the main battle tank project contract despite having no experience. Ruhsar Pekcan, a minister who sold overpriced disinfectants to the ministry that she presides over during the pandemic was replaced by prominent AKP figure Mehmet Mus, who otherwise most distinguished himself helping Albayrak, to complete his doctoral thesis, as revealed by Wikileaks. The academic advisor to both Albayrak and Sahap Kavcioğlu (head of the Central Bank), later assumed key positions in the Istanbul Stock Exchange and Turkey Wealth Funds.
All these relationships may seem to be centered on nepotism. But the Wealth Fund, which also funds the financing of massive infrastructure projects, actually has a composition that manages all the major state banks and even the Istanbul Stock Exchange under its own assets. While the Wealth Fund has injected liquidity into the stock market, itself recently been plagued by irregularities, it has also continued to supply enormous public financing since public banks are among its assets. World Bank data reveals that between 2002 and 2020, four of the top five companies receiving the largest global public infrastructure tenders were Turkish, coinciding with the AKP’s rise to power.
In 2017, Turkey adopted a presidential system through a referendum on a constitutional change, which was a long-standing goal of Erdoğan. Following the controversial referendum results, the authority of the presidency was expanded, granting the president the power to oversee and regulate the executive branch, serve as a political party leader, and dissolve parliament. It was a regime change and Erdoğan gaining the power to be the sole decision maker for all public appointments such as directors of the Central Bank, senior bureaucrats of the economic institutions, and the judiciary; nepotism and corrupt public lending practices favoring the connected ones became the state of affairs in Turkish economy. With leaving behind what was left over from the check and balance mechanisms, Turkey is in a system where anti-law sentiments and hegemony of command – rule system completely replace the fundamental pillars of the law and democracy and where the dominance of daily political interests prevails.
As the country races towards the general elections in May, all the cylinders of the country are misfiring, and warning signs are loud and clear. This system has already been heavily brought into question in the run-up to the elections, especially by the left-wing challengers in the opposition.
The cost of AKP’s neoliberal economic model
Since January 2023, high exchange and low-interest rates have led to Turkey’s Gross External Debt Stock reaching $459 billion (€418.3bn), with a national income ratio of 50.7%.
Surely, the problems facing Turkey are multi-faceted. The reliability of the statistics published by the government has itself been subject to severe scrutiny and challenge. Unemployment is high, the informal economy has grown to an undeniable degree, and labor safety is inadequate. In parallel to the obstacles before, the unionization rate and workers’ share of national income are decreasing continuously and exponentially.
The burden to be dealt with is not insignificant, as frailties keep appearing. Upcoming deadly risks for the country range from ecological crises to the need for earthquake resiliency and addressing poor education quality. The current system inadequately prepares the workforce to tackle these challenges amid decreasing unionization and workers’ share in national income.
Meanwhile, state-led irregularities in Turkey have turned into a routine. In Turkey, there is a massive system of real estate rent-seeking in which all parties, from local governments to ministries and private companies, participate and engage in corruption almost indiscriminately. A problematic housing system has been created with arbitrariness and exceptions from top to bottom, especially in construction licenses and land titling. For years, the existing laws and regulations prevented, partially, the licensing of buildings that were at least illegal, unlawful and had to be corrected, and even forbade them to be inhabited and they were forced to be demolished.
Before the June 2018 general elections, a Zoning Amnesty Law protected 7 million unauthorised structures that assigned earthquake safety obligations to citizens With the help of this law, non-compliant situations in zoning regulations were recorded through simple declarations and problematic residences were protected with building registration documents obtained from the ministry. 1.3 billion USD in tax revenue has been collected through this regulation, and previously collected earthquake taxes should have funded earthquake-resistant social housing. However, the AKP chose to funnel that money into alternative infrastructure projects instead.. Consequently, the February 6 Earthquakes took over 50,000 lives and incurred an estimated economic cost of $150 billion, leaving devastated cities and citizens behind.
What can the left offer to balance out the right?
Some parties surely are positioning themselves against this paradigm. The leading opposition party is the Republican People’s Party (CHP), a center-left force with nationalist tendencies. Certain figures within CHP oppose the neo-liberal model and support various policies, from nationalization to taming the market. Under the leadership of Kılıçdaroğlu, CHP has proposed a Family Support Insurance system, reminiscent of Brazil’s renowned Family Insurance Program. This system aims to provide every family with a minimum income guarantee, with features similar to a universal basic income program. Additionally, the CHP alleges that there is over $418 billion in misused funds due to corruption and favoritism to be recovered. This includes tackling corruption in public procurement, addressing currency manipulation, money laundering, and kickback loans. The CHP’s claims cover a wide range of areas, from public tenders, construction, and zoning to taxes, banking, capital markets, and the energy and mining sectors.
CHP plans to implement the program as a kind of wealth tax to recover unjust enrichment accumulated over the past two decades. For instance, CHP has also called for the nationalization of strategic sugar factories, reversing their privatization in recent years. Those factories were sold through privatization at a price below their actual value. Although general discourse on this issue were frequently voiced within the party and became part of popular discourse, they were eventually forgotten. Currently, It is hard to identify a specific policy aligned with the nationalization scheme that voters or party members can easily recall.
However, this view finds a solid ground of political voice at a relatively minor vocal in CHP at best — mostly, CHP is in league with most European social democrats, forging comfortable alliances with businesses and free-market actors, downplaying their — already softened — leftist inclinations. The party employed some discourses dubbed “left populist.” but still needs to amount to a clear agenda or policy. Although the emphasis is on social security and reclaiming billions of dollars, AKP wasted over miserably failed economic policies and networks of corruption, their grand strategy on the economy is vague as hundreds of campaign pledges are already delivered but the harmony among them is vague.
In the final weeks of the campaign, CHP announced a development program based on establishing regional exclusive economic zones and more recently, Kılıçdaroğlu declared a 5,500 km regional trade project encompassing all countries in near Asia, extending up to China but its impact on voters is uncertain. Kılıçdaroğlu’s regional exclusive economic zones based on to integrate Turkey into new trade routes and markets for high value-added production. This model will be built on a global production, trade, and finance network through 9 special economic zones, 17 agriculture and livestock centers, and 50 production bases that will be established across the country. These special economic zones aim to promote economic growth and development by attracting foreign investment and facilitating trade.
In a recent statement, Kemal Kılıçdaroğlu highlighted the brain drain issue in the country and unveiled an ambitious plan to initiate a comprehensive space program, incorporating cancer treatment programs citing the new trend in that research area such as programs carried out in space. This plan comprises a collaboration with the US-based Sierra Nevada Corporation (SNC), a NASA supplier, and Canan Dağdeviren of MIT, both originally from Turkey. Although this project may appeal to the new generation of nationalist voters, it was announced relatively late, which remains a concern.
New wave of nationalism
Turkey’s long-standing income inequality has led to severe welfare issues, particularly for the youth, as the import-dependent consumption model intersects with the low-interest, high-exchange rate approach advocated by Erdoğan and his son-in-law Albayrak. The young population is frustrated by the disparity of comparative welfare indicators and demands immediate solutions as they observe that daily practices that are standard for their peers around the world are luxuries and unattainable for them. Official figures indicate that in Turkey, half of the population is unable to afford a vacation away from home. This dire situation also affects young people who struggle to make ends meet and cover their daily expenses. Over one in four individuals in Turkey have had to take on additional debt or rely on credit cards to pay for everyday expenses and 80 percent of those individuals are worried about their household’s inability to pay their bills.
Since 2015, the AKP and its major partner, the MHP, have suppressed democratic politics with a security perspective on two issues: the Kurdish Question and Gulenism. The Kurdish Question has been used to keep the perception of threat alive, stigmatize non-AKP actors as terrorist collaborators and traitors, and maintain political control. Similarly, after the massive conflict with the Gulenists that took place after 2013, a religious community group that has been a partner of the AKP since its foundation, the AKP again tried to squeeze the entire opposition through Gulenism. In a country ruled by two dominant parties, the AKP and the MHP, this has created psychological pressure on society by promoting delusions of security and defining loyalty to the country based on the AKP’s agenda. As a result, the criteria for defending the interests of the country in Turkey have been established and defined by the AKP’s political agenda.
The coup attempt of Gulenists took place in 2016, renewed conflicts with the PKK after the failed Peace Process, and regional wars such as Syrian Civil War (including Turkey’s cross border operations there), the war between Azerbaijan and Armenia, have fostered a hyper-militarized environment among youth, intensifying desires for a hyper-technocratic, disciplined, and chauvinistic future amid a lack of prosperity and a sense of being left behind.
Young voters in Turkey are showing interest in new political options. Muharrem İnce, a former candidate of the CHP who ran against Erdoğan in 2018, has founded a new party and is appealing to young voters with references to the memory of Atatürk, the country’s founding father. He is also promising a major development plan through education model that covers quantum physics, an economic model supported through nanotech industry investments and fusion technology program.
Among young voters there is a group of them who aspire to live in an ideal welfare country with singular identities and high-tech advancements, without addressing issues such as the Kurdish problem, LGBTIQ+ rights, or the income inequality created by the capital groups through the use of public resources or tax exemptions and privileges. They crave for a democracy is not based on pluralistic and inclusive method but targets a direct deliberation of welfare aspects for the country.
The big portion of electorates incline the parties to move to shift from the center of the political spectrum to the right. In this way, main stream political parties formulated the path to convince the voters in an environment where the coordination of civil society, trade union struggle and political struggle was left to AKP hegemony. Opposition parties in Turkey may be overlooking the potential long-term consequences of it but the fact that this creates delayed problems as we have witnessed in some of the Western democracies as rise of fascist parties.
CHP’s parliamentary candidate list affirms the move to the right, opening their lists to smaller right-wing parties in their alliance as a part of their agreement, with the party’s left wing being side-lined. The CHP’s choice on the candidate lists is a result of the Nation Alliance that she established with other 5 right-wing parties it chose to run with.
Who else is left on the left?
On the other hand, much sterner opposition to the neo-liberal discourse is formulated by the Labour and Freedom Alliance (LFA). Spearheaded by the Peoples’ Democratic Party (HDP), LFA includes the Workers’ Party of Turkey (TİP), which is growing its popularity and resonance, especially in the last two years, and the Labour Party (EMEP), as well as three more minor left-wing parties and movements. The alliance is contesting the elections as two lists, HDP and minor parties are under the Green Left Party (YSP) (due to the potential constitutional court case threatening the closure of HDP, a purely political manoeuvre by AKP) and TİP, running their own candidates in certain constituencies.
While YSP polls around 10%, TİP is 2% on average. The alliance is contesting the elections as two lists which ended up wrecking discussions among the electoral targets of the alliance. The percentages are nowhere near having a majority; however, the alliance presents apparent alternatives to the electorate, which is crucial for the post-Erdoğan setting. According to recent polls, the AKP and its allies are unlikely to reach the 300-deputy majority required to pass legislation in the parliament. Meanwhile, the LFA is expected to gain enough seats to form a majority with the opposition, which seeks to come to power. The LFA is expected to play a critical role in constitutional amendments that require a referendum, as even with 360 deputies, the Nation Alliance may not easily reach the required majority. Recent polls suggest that the Nation Alliance may not reach 300 deputies easily.
Meanwhile, the LFA is expected to gain enough seats to form a majority with the opposition, which seeks to come to power.
Also, crucially LFA opted not to field a presidential candidate, instead pointing, although not directly supporting, Kemal Kılıçdaroğlu as the common candidate of opposition – however, the intent is clear, Erdoğan must lose the presidential bid.
YSP has strong and dedicated support, the majority coming from the Kurdish population that grew into a Turkey-wide political project, rallying millions, especially peaking in the 2015 elections with the leadership of Selahattin Demirtaş and Figen Yüksekdağ. On the other hand, TİP managed to gain momentum in larger cities, especially amongst students and workers, few blue- and mainly white-collar. This was primarily due to their radical opposition and fiery speeches in the parliament with only four representatives at a time when the devastating consequences of 21-year AKP rule were at their peak; they managed to reflect the societal reactions that people wanted to express their feelings such as despair and anger but hesitated due to repression.
Can the left really lead Turkey towards a better future?
Corruption has become the norm in the economic system, resulting in an anomaly in the form of the regime and destroying social cohesion. While there have been some advances in the fight against crony capitalism, achieved through judicial intervention or left-wing activism, Turkey has now become a society divided by a caste system as citizens are left alone in a spiral of massive debt, lawlessness, and authoritarian politics.
In the post-Erdoğan period, left-wing politics could be a game-changer, potentially playing a key role in the legislative process despite potentially being represented by only 80-90 deputies, which could amount to a decisive entity under given election forecasts. The LFA’s influential role could shift the right-wing dominated political balance. Yet internal disharmony has arisen over YSP candidates who previously backed AKP and vote-splitting concerns from TİP running on separate lists.
Providing a left vision for the economy, LFA has a clear stance on the redistribution of wealth accumulated in the hands of a select few, opposes social inequalities and voices their demands for regulating working hours, the right to unionise and workers’ rights. Additionally, emanating from the Kurdish political movement, YSP emphasises civil and minority rights, while TİP underlines their uncompromising stance for secularism and against the religious sects. The LFA has the opportunity to address concrete issues such as the severe housing crisis in Turkey, which has left millions struggling in a housing market controlled by big real estate companies and corrupt construction firms. The LFA could prioritize public, democratic, and social housing initiatives to tackle this problem as they are currently advocating those.
In a post-Erdoğan Turkey, the strong representation of LFA in the parliament will be decisive in the country’s political direction. YSP and TİP representatives having an influential say in making a new constitution or the reconstruction period may shift the balance of politics, which has been heavily skewed towards right-wing in the last decades.
Kılıçdaroğlu is not alone in facing the growing influence of rightist politics in Turkey as he has advocated for a citizenship model based on objective merits and democratic benchmarks, transcending identity-based threats. Despite facing attacks, Kılıçdaroğlu displays reassuring maturity and promises a brighter democratic future for the country.
The potential of LFA and its left-wing vision highlights that for the opposition and the people of Turkey, the upcoming elections are not only about replacing Erdoğan but making an important decision about how the politics and economy are reconstructed and who gets a say in it: whether it will be reconstruction or restoration of the economic principles. The Labour and Freedom Alliance should present an alternative to the traditional political parties, emphasising the need for a revitalisation process beyond the neo-liberal paradigm.
