In the next couple of months, Turkey is due to go to the polls to elect a new parliament and president. Now, incumbent President Erdogan has been in power for the best part of two decades. And while he might not go down too well in the West, his Islamist tinged populism has proved genuinely popular in Turkey. However, over the last few months or so, Erdogan's appeal has begun to wane, and polling suggests that he's now behind the main opposition candidate. Let's take a look at the three reasons why Erdogan might lose the next election. The economy, the newly unified opposition and his lackluster response to the earthquake.
Let's get into the three reasons why Erdogan might lose. Starting with Erdogan's handling of the economy. Essentially, because Turkey's economy relies quite heavily on imports, Turkey's inflation rate has surged over the last 18 months or so. Now, usually central banks hike inflation rates in order to reduce inflation. But Erdogan thinks that this idea is a conspiracy advanced by the so-called interest rate lobby. So instead, he decided to cut rates and fire any central banker who dared to disagree with him on this policy. Accordingly, the central bank has cut rates from 19% in March of 2021 to 10.5% today. And as Orthodox economists would have predicted, year on year, inflation has jumped from 20% to over 80% by the end of last year. Now, while that might sound bad, unofficial estimates suggest that things are even worse. An unofficial index that measures inflation in Istanbul, compiled by the city's Chamber of Commerce, put the inflation rate at 107%, while another unofficial index, developed by the Independent Inflation Research group (ENAG), put it at 185%. Now, while year on year inflation fell to 55% in February and Turkey's GDP has apparently held up relatively well, inflation has still eaten away ordinary Turks living standards.
That's because, despite the fact that the Turkish economy grew by 5.6% in 2022, this growth was driven by strong exports enabled by a weak currency and a desperate consumption binge by Turkish households who realized that they needed to spend their lira before it became valueless. So while growth does look good, the reasons underlying it aren't all that positive. On top of that, despite successive minimum wage increases, wages are still way behind inflation. And as such, the vast majority of Turks have seen steep declines in their living standards. However, the economy isn't Erdogan's only issue, and the second reason he might lose the next election is Turkey's newly unified opposition. Essentially, the opposition parties realized a while ago that the only way that they were going to defeat Erdogan was if they formed a coalition, which is why in December last year, the six main opposition parties known as the Table of Six announced that they'd be running together on a package of constitutional reforms that would primarily aim to return the country to a parliamentary democracy. For context, Erdogan himself created the current executive presidential system, which gives sweeping constitutional powers to the president, with him doing so via a controversial referendum in 2017.
Fortunately for Erdogan, however, the table of six unity was immediately strained by their inability to decide on a leader. According to polling, the two most popular candidates were Mansur Yavas and Ekrem Imamoglu, the opposition mayors of Ankara and Istanbul, respectively. However, despite their popularity, the leader of the main opposition party, Kemal Kilicdaroglu, apparently refused to give up the reins, despite the fact that he significantly less popular than either of the other two candidates and the fact that he's lost to Erdogan multiple times in the past. And just last week this issue looked so major that the alliance looked at risk of collapsing altogether with the leader of Turkey's right wing good party, saying that she'd leave the alliance largely because she didn't think that Kilicdaroglu was fit to lead it. However, on Monday, the alliance finally announced that they'd decided on an official new hierarchy. Kilicdaroglu would be their official presidential candidate, while Yavas and Imamoglu would be vice presidents were they to win.
Now, this decision is yet more bad news for Erdogan, both because a united opposition is obviously more effective than a divided one, but also because polling suggests that while he might not be as popular as some of the other candidates, Kilicdaroglu has already opened up a healthy 15 point lead over Erdogan. But there's another reason that Erdogan is in trouble. The third reason is Erdogan's lack. Cluster response to the recent earthquake. Now, you likely already know this, but the earthquakes that struck Turkey and Syria last month, especially the 7.8 magnitude one, have been truly catastrophic. Over 60,000 people have died as a result of the quakes, of which 50,000 were Turkish, making it the fifth deadliest earthquake in the 21st century. On top of that, though, 1.25 million people have also been made homeless as a result. And the UN estimates that the damage will exceed $100 billion in cost over 10% of Turkey's GDP.
Now, obviously, a natural disaster isn't necessarily bad news for an incumbent government. After all, it's not like it was Erdogan's fault. However, his response and some of his policies that preceded the earthquake have been criticized. For instance, Turkey's search and rescue teams were slow to arrive at the disaster and struggled to make a dent in the enormous amount of damage. But Erdogan originally refused to accept any criticism for the state's response. After an intense backlash, he did eventually apologize, admitting that we were not able to work in the way we wanted to in the first few days. And for this I apologize. But by this point, it was too little, too late. Erdogan's government has also been criticized for misspending the natural disaster tax revenues worth about $3.5 billion and failing to effectively enforce safety regulations brought into force after the 1999 earthquake. That's because in order to stimulate construction and economic growth in Turkey, Erdogan repeatedly issued amnesties on these regulations and some of the buildings that collapsed during the most recent quakes were built under those amnesties.
As such, there's a deep historical irony here. The Turkish state's lackluster response to the 1999 earthquake and the massive inflation that followed helped to propel Erdogan's AKP party to power in 2003. When Erdogan promised to improve government efficiency and prevent this kind of thing from happening again. Today, Erdogan finds himself on the opposite side of a very similar situation, and this time his mishandling of the earthquake has undermined the implicit deal that he made with the Turkish people back in 2003. But while he might be a bit autocratic, he's more effective than the dithering Democrats of the West. So those are the three reasons that Erdogan might lose the next election. And to be clear, we're not saying that he will or that we want him to. Things are looking tough for Erdogan and there's a real chance that we could see a change in government in Turkey this year.
