President Erdogan once again emerged victorious in Sunday’s presidential elections. In the highly contested race, he secured 52 per cent of the votes, beating his rival Kemal Kilicdaroglu by four points. With challenges mounting from his previous terms, the next five years will be one of the most challenging for President Erdogan.
The biggest and most immediate crisis he is facing is the Turkish lira. Since the beginning of the economic crisis in 2018, the lira has lost over 450 per cent of its value against the US dollar. In the run-up to the elections, the Turkish Central Bank burned billions of dollars to keep the Turkish lira from sliding past the psychological 20-dollar mark. While these efforts may have created an illusion that the currency crisis is under control, it depleted the Central Bank’s net foreign currency reserves to their lowest level since 2002.
With the elections out of the way and the Central Bank’s reserves emptied, the lira is likely to experience another free fall
With the elections out of the way and the Central Bank’s reserves emptied, the lira is likely to experience another free fall. To halt the rapid devaluation of the currency, President Erdogan would have to reverse his so-called ‘unorthodox’ monetary policies and restore the independence of the Central Bank. Despite the evident currency crisis and the conventional economic theory contradicting his stance, President Erdogan has stubbornly maintained the highly unusual view that higher interest rates lead to higher inflation. He made it clear during the campaign that he intends to stick with these economic policies after the elections.
Over the past few months, the Turkish Central Bank has received tens of billions of dollars from Gulf states, notably Saudi Arabia and Qatar. However, this cash injection was not a regular foreign investment but intended to aid President Erdogan in winning the elections. In a recent speech, President Erdogan himself referred to these money transfers as a ‘relief’ for which he will express gratitude after the elections. Whether these funds were meant to secure a friendlier attitude from Ankara on the geopolitical stage or to garner concrete economic or political favours remains to be seen.
Russia is another country that played a role in helping President Erdogan maintain his grip on power. In May, Ankara and Moscow agreed to defer payments for Russian natural gas until 2024. The energy bill to Russia could reach up to 4 billion dollars by next year. By avoiding most western sanctions and strengthening economic ties with Russia, while also selling armed drones to Ukraine, President Erdogan was able to position himself naturally in the conflict. It was clearly in President Putin's interest to assist President Erdogan in staying in office, rather than seeing his more pro-Nato opposition rival, Kemal Kilicdaroglu, come to power. However, the energy bill from Russia will eventually come due, further worsening President Erdogan's chances of escaping the crisis.
In September, President Erdogan promised the construction of 500,000 new flats if elected for another five years. The construction sector, which serves as the engine of the Turkish economy, heavily relies on imported materials. If the lira continues to drop, it will become increasingly difficult to afford such high imports. To make matters worse, in February a massive earthquake hit southern Turkey claiming the lives of over 50,000 and displacing over two million. The government swiftly promised the reconstruction of all affected areas within a year.
Apart from the economic crisis, another topic of discussion regarding President Erdogan's next term is his health. At 69 years old, his once-famous energy appears to be waning. During a live interview in the campaign period, he fell ill, leading to the cancellation of all his planned visits and rallies for the next three days. In another live interview, he appeared to be falling asleep before the camera quickly cut away. Videos circulating on social media also show the president having difficulty walking. While speculation about his health has been rife, the government consistently downplays any concerns.
In the 2019 local elections, the opposition regained control over multiple large cities, including Ankara and Istanbul. It was the closest they had ever come to an electoral victory during President Erdogan's two-decade-long rule. The next local elections will take place in March 2024. In his victory speech on Sunday, President Erdogan called on his supporters to help him win back these cities. His strategy will likely continue to focus on polarisation, accusing the opposition over the next ten months of being aligned with terrorists and being pro-LGBT.
Another issue that is expected to dominate the Turkish agenda in the coming years is migration. Turkey currently hosts around four million refugees, primarily Syrians, the highest number of refugees in the world in one country. Between the first and second rounds of the elections, the opposition and the government engaged in a bidding war, promising the repatriation of Syrians. President Erdogan's Justice and Development party (AKP) pledged to send back at least one million refugees within a year.
Repatriating such a large number of refugees without severe human rights violations and creating a new migration crisis on Europe’s southern borders will require a comprehensive agreement with Bashar al-Assad. But the Syrian Foreign Ministry has clearly stated that ‘as long as there are Turkish troops on Syrian soil, there will be no normalisation between Damascus and Ankara.’ Giving up the areas controlled by the Turkish Armed Forces in northern Syria and thus deescalating Ankara’s ‘war on terror’ against the Kurdish insurgence groups in the region is not likely. With the worsening cost of living crisis, President Erdogan will need to rally support under the nationalist banner of fighting terrorism more than ever.
Opposition voices claiming President Erdogan faces next to zero chances of leading the country for another five years in the mess he himself created are far-fetched. Since coming to power in 2002, he has time and again defied all odds and all expectations. He has formed new alliances, broken old ones, gone to war, and brokered peace. Nevertheless, whether it is the issues with the economy, his health, or migration, he faces one of the toughest challenges in his political career.
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