Turkey’s Opposition Can End the Country’s Economic Crisis

As Turkish President Recep Tayyip Erdogan’s power weakens, the Turkish economy’s crisis deepens. Since the end of 2012, the Turkish lira has lost more than 80 percent of its value, the worst slide in the developing world after the Argentine peso.

In its failed attempt to prop the lira up, Ankara opened the money spigot and blew through more than $128 billion in foreign exchange reserves, which many respectable economists now believe to be in the negative. In less than two years, Turkey’s Central Bank cycled through three governors. Just in the past month, rumors in the foreign media about a replacement at the Central Bank—followed by the sacking of three of its six board members, yet another interest rate cut that defies all economic logic, and Erdogan’s threat to expel the ambassadors of 10 European countries—poured oil on a five-alarm fire.

For Turkish citizens, the prices keep rising. Inflation neared 20 percent in September. According to Turkey’s largest trade union, more than 7 million minimum wage earners face hunger. Polls show that almost two-thirds of the Turkish public is struggling to make ends meet. Turkey’s best and brightest are emigrating in droves, even though the labor minister thinks they’re leaving not because there’s anything wrong in the country but because they’re free-spirited adventure-seekers.

While crony companies receive billions of dollars in tax amnesties, average citizens buying an imported car are paying almost three times its original price in indirect taxes, which account for half of Turkey’s public revenues and fall mostly on small businesses and salaried workers.

The country’s top business groups—the Turkish Industry and Business Association and the Union of Chambers and Commodity Exchanges—abandoned their penchant for avoiding political controversy to publicly criticize the government’s economic management. Even the famously reticent Mehmet Omer Koc, whose Koc Holding is Turkey’s largest industrial conglomerate and accounts for almost 6 percent of the country’s GDP, broke his silence to bemoan rising consumer prices, spiraling currency rates, and the exodus of foreign investors. Like a frog in boiling water, Erdogan’s government appears unfazed by the economic maelstrom that threatens to be its undoing.

Like a frog in boiling water, Erdogan’s government appears unfazed by the economic maelstrom that threatens to be its undoing. For rising prices, their culprit is the greedy supermarket chains. The solution? The government will open up 1,000 grocery stores of its own to sell produce directly from the state-owned agricultural cooperatives, as Erdogan announced earlier this month, not knowing that the store where he posed smilingly for cameras was actually pricier than the supermarket chains he has been bashing.

Top officials in Erdogan’s Justice and Development Party (AKP) are extolling on live television the virtues of hunger as a means of self-discipline, which even the Prophet Muhammad exercised. All the while, a new corruption scandal is erupting almost every week, and the extravagant lifestyles of AKP scions are getting exposed on social media.

Not surprisingly, many citizens are rooting for a change. In March 2019, they already sent the government a strong message by electing opposition candidates as mayors in five of Turkey’s seven largest cities. Instead of correcting course, Erdogan dug in his heels and forced a controversial rerun in Istanbul. His handpicked candidate, former Turkish Prime Minister Binali Yildirim, lost once again by an even bigger margin. Polls show more than half of the public is expecting Erdogan to lose in the upcoming elections, including one-quarter of AKP supporters and almost 40 percent of those supporting Erdogan’s coalition partner, the Nationalist Movement Party. Change is in the air—more than ever before.

A key element of this shifting momentum is the rise of a new style of politics that articulates a positive vision for the country and gives primacy to reason over emotion, compromise over conflict, and unity over division. Turkey’s political custom is for the pious, the seculars, the Turks, and the Kurds to sort themselves apart as opposed to uniting around their shared interests.

Erdogan’s Kulturkampf that reduced the country to an us-versus-them binary also glossed over leadership lapses and ineffective management in every area from the banks to the barracks. Now, a diverse coalition, including ex-AKP renegades and secular nationalists as well as moderate Kurds and left-wing progressives, are putting their differences aside to unite around the common cause of more democracy, a better economy, and a return to normalcy.

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Gone is the aura of invincibility that surrounded Erdogan and the electric atmosphere that characterized his rallies. Instead, opposition leaders are attracting enthusiastic crowds and making headlines. Everywhere they go, voters voice the same concerns: Fresh college graduates can’t find work, white-collar professionals seek opportunities abroad, minimum wage workers and pensioners struggle to make ends meet, small business owners are barely staying afloat, investors are losing their confidence in the economy, and parents are worrying for their children. It appears empty fridges and slimming wallets are powerful enough to bridge old political and ideological divisions.

As other parties gain momentum, there is a practical question of whether the opposition can steady the ship after Erdogan leaves the scene. It is no easy feat to undo the legacy of the AKP’s ambitious campaign to reshape Turkish society to its liking and extend its influence over every aspect of economic, political, and cultural life. A recent survey by respected pollster Metropoll found the public is evenly split on the question. Even among opposition supporters, 1 in 5 people are worried the task may prove too difficult to pull off. While Erdogan and his aides are busy attacking imaginary enemies, the opposition has been rolling out detailed policy proposals on how to fix the economy.

Turkey’s big-tent opposition has detailed plans to lift the country out of its current crisis and has the people to carry those plans out. Indeed, the opposition boasts some of the country’s finest legal, economic, and political minds—including veteran economic officials and world-renowned academics. While Erdogan and his aides are busy attacking imaginary enemies, the opposition has been rolling out detailed policy proposals on how to fix the economy and make Turkey normal again.

The first order of business is to reverse the imperial presidency, which is the root cause of Turkey’s malaise as it places all power in the hands of a single man, reduces the parliament to a rubber stamp for his decisions, and leaves an entire state captive to his whims and temper. The opposition’s six parties are already discussing the details of how this will be done.

Despite leading in the polls, Meral Aksener, leader of the center-right Iyi (Good) Party—of which we are members—has ruled herself out of the 2023 presidential race and declared her intention to seek the prime minister’s office after leading the charge on ambitious reforms—including reducing the president to a ceremonial role; restoring the legislature’s powers; expanding democratic oversight; and bolstering judicial independence, regulatory autonomy, and merit-based recruitment in the public sector. Enacting such reforms without delay would mean a future president could not be tempted to stall the process to hold on to Erdogan’s vast powers.

The opposition is also working hard on market-minded, forward-looking reforms that will once again make Turkey a buzzing innovation and entrepreneurship hub. Some of its proposals are refreshingly creative and surprisingly workable. For example, the opposition is planning to increase public revenues by one-third using a blockchain-based, real-time fiscal data monitoring system that equalizes the tax burden and reins in the informal economy, which currently accounts for more than one-quarter of economic activity and is one of the largest in the Organisation for Economic Cooperation and Development.

Using these additional resources, it will be possible to hire 100,000 new teachers, offer start-up grants to 5,000 new businesses annually, give a monthly allowance to 2 million low-income young people, eliminate taxes on car sales, slash the gasoline tax in half, abolish age limits for workers who have completed their retirement contributions, and fund at least two infrastructure mega-projects every year. Another proposal vows to eliminate child poverty by providing free breakfast and school lunches to 250,000 preschoolers and 2 million schoolchildren while creating more than 300,000 well-paid jobs, many of which will be reserved for women.

While Erdogan’s government appears stuck in its old ways, the opposition is revitalizing the policy conversation with bold and innovative ideas, from a universal basic income for youngsters to a new industrial policy, including a nationwide plan for symbiotic production clusters and a completely revamped research and development infrastructure modeled after Germany’s Fraunhofer Institutes.

As difficult as the task may be, the key to halting Turkey’s economic crisis is quite simple: Do your homework, and come prepared. Unlike Erdogan’s flailing administration, that is exactly what Turkey’s opposition is doing.