Democracy lives in Turkey, apparently.
“I congratulate Ekrem Imamoglu, who won the election based on unofficial results”, President Recep Tayyip Erdogan tweeted, as it became clear that Binali Yildirim had lost the Istanbul re-run on Sunday. “Starting with this month’s G20 Summit, China visit and then South Europe and Balkans Summit, we will continue to meticulously deal with Turkey‘s internal and external issues in line with our national interests'”, Erdogan added.
When it was all said and done (or close to it, anyway) Imamoglu captured 54% of vote, against Yildirim’s 45%. Imamoglu’s margin of victory was some 800,000 in the re-run versus just 14,000 in the initial vote, which Erdogan managed to have nullified.
This marks the first time Istanbul won’t be held by Erdogan’s party (or its predecessor) in a quarter century. By extension, this is the first time Istanbul has fallen to the opposition since Erdogan rose to power.
While the result is, in many respects, “stunning” and “tectonic” (as various media outlets have described it), don’t forget that Imamoglu already won once. Technically, this is the second time he’s become mayor of Istanbul this year, a laughable scenario that speaks to Erdogan’s penchant for pushing the boundaries of democratic norms.
Even considering the wide margin of victory, it’s somewhat surprising that Erdogan accepted the results so quickly and with some semblance of grace and humility. It’s been a bumpy ride for Turkey over the last year. The economy suffered mightily as Erdogan’s increasingly tight grip on monetary policy precipitated a near collapse in the lira last summer. His belligerent approach to foreign policy (e.g., the protracted dispute with Washington over the detention of Christian pastor Andrew Brunson) didn’t help, although he deftly played the Jamal Khashoggi murder to his advantage by leveraging the evidence Turkey collected implicating Saudi Crown Prince Mohammed. Brunson was, of course, released in October, which helped smooth things over with Donald Trump.
After that, things calmed down for a while, but 2019 brought more trouble. Between the slumping economy, depleted foreign reserves, the erosion of democracy, the absence of central bank independence and the S-400 soap opera, Turkish assets came under siege, prompting Erdogan to resort to a series of measures to shore up the currency. Ahead of the local elections in March, he effectively trapped investors in the lira, causing all manner of consternation. Whispers about capital controls grew louder and Ankara was unable to soothe investors who were spooked further by allegations that the central bank is inflating reserves with swaps. Late last month, Turkish stocks fell into a bear market.
Although CBT kept rates on hold at its last meeting, the central bank dropped its tightening bias and, over the past several weeks, reports suggested banks are being bullied into effectively underwriting fiscal largesse at Erdogan’s urging (i.e., forced to buy more bonds at auction than they need in their capacity as market makers). He also compelled pension funds to hold a minimum amount of Turkish stocks and bonds. Just days ago, CBT rolled out a new liquidity facility aimed at bolstering demand for the country’s debt amid worries the Moody’s downgrade would undermine confidence further.
All of that doubtlessly contributed to Imamoglu’s victory, as did the Kurdish vote, which was rallied by Selahattin Demirtas. Tweeting from prison (literally), Demirtas encouraged HDP to vote for Imamoglu. AKP tried to offset that by compelling PKK leader Abdullah Ocalan (who is also in jail) to ask Kurds to remain neutral.
Erdogan played them off one another. “There is a power struggle here”, he said late last week. As al-Jazeera recounts, “HDP said in a written statement on Friday that Ocalan’s statement was in line with the HDP’s strategy until now, and that Erdogan was seeking to pit HDP and Ocalan against each other in a ‘desperate’ move”.
Suffice to say it didn’t work.
Importantly, losing Istanbul likely imperils AKP’s funding. “[It means] losing a significant revenue source for [the party’s] political machinery, ranging from subsidies to the party faithful to construction contracts and funds for pro-government media”, European Council for Foreign Relations senior fellow Asli Aydintasbas told the New York Times earlier this week.
“Losing Istanbul is much more than ceding control of Turkey’s largest city and commercial powerhouse”, Bloomberg’s Cagan Koc and Selcan Hacaoglu wrote Sunday. “The mayor’s job was the springboard for Erdogan’s own political career, and if Imamoglu performs well in the position, then the president may find himself with a future challenger.”
Maybe. But let’s not count our chickens here. After all, it’s possible Erdogan could still try and stymie Imamoglu.
“[It’s] too early to write Erdogan off – he has survived [enough] challenges before to warrant the ‘Teflon Tayyip’ mantra, but [he] needs to learn from this and move back to liberal reform agenda”, BlueBay’s Tim Ash said. Erdogan “needs a radical clear out of the cabinet… and that needs to extend to the central bank which has not been fit for purpose for much of the past few years”, he added.
“I’m ready to work with you in harmony”, Imamoglu proclaimed after the vote, in a message to Erdogan. “I put myself up for that, and I announce this in front of all Istanbul people.”
His supporters were ebullient. “While March 31 was a mayoral election, this re-run was one to put an end to the dictatorship”, Gulcan Demirkaya, 48, who hails from the city’s AKP-leaning Kagithane district told Reuters.
“God willing, I would like to see Imamoglu as the president in five years’ time”, she added. “The one-man rule should come to an end. For the first time in a long time, I am very happy and proud for my country.”