Turkey is on borrowed time

published 4 April 2014

Turkey's current government, the AKP, Turkey's Justice and Development Party, won 48% of the vote in local elections last Sunday. The main opposition achieved just 28%.

Prime Minister Recep Erdogan pledged to punish his rivals for being part of what he described as a foreign-backed conspiracy to topple his government.

In recent months, Erdogan has sought to derail a corruption probe into his administration by overhauling the police and the judiciary.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

What the commentators said

Erdogan has arrested critics and journalists, tried to politicise the judiciary and even tried to ban Twitter and Facebook, two news sources that counteract the AKP's media dominance.

But none of this seems to bother the average voter much, as Ali Berat Meric noted on Bloomberg.com. That's because the AKP has given the economy a big boost. Turkey's GDP per head, adjusted for inflation, has doubled to $15,000 since it took office.The party improved infrastructure and health care provision.

"Without a major economic downturn the Turkish people will not give up their attachment to AKP", said Omer Taspinar of the Brookings Institution.

But that might not be too far away.The economy is slowing sharply.Recent jitters over the prospect of the US Federal Reserve reducing its level of money printing have forced the Turkish central bank to raise interest rates sharply to keep much-needed foreign capital from fleeing the country, noted Capital Economics.

This hike in rates is likely to cause domestic demand to slow sharply, or even shrink. If Erdogan's popularity depends on rapid economic growth, his star may well have peaked.

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.