snapshots

Turkey: A Rerun of the Istanbul Mayoral Election Raises Economic Risk

4 MINS READMay 7, 2019 | 21:14 GMT
The Big Picture

In pushing for an election rerun in Istanbul, Turkey's cultural and economic capital, the ruling AKP is prioritizing political continuity at home above peaceful relations abroad and near-term economic stability. Still, the party must tread carefully, lest it deepen the economic pain as it courts the nationalist vote that could help it regain the city.

 

What Happened

Just over a month after Turkey's main opposition scored a stunning victory in local elections in Istanbul, the residents of the country's largest city are going back to the polls. On May 6, Turkey's Supreme Election Board (YSK) canceled the March 31 Istanbul mayoral poll results in a 7-4 vote on account of "unlawful appointments to some ballot box boards," ordering new elections for June 23. Ekrem Imamoglu, the Republican People's Party (CHP) candidate who assumed office just over two weeks ago, will now have to return his mandate for the mayoral post while Istanbul Gov. Ali Yerlikaya and Interior Minister Suleyman Soylu of the ruling Justice and Development Party (AKP) handpick an interim mayor to govern the city until the new election.

Why It Matters

The contentious decision sets up a historic contest between the AKP, which exercises enormous influence over government institutions (including the YSK), against a political opposition that managed to grab a rare but unprecedented win in Turkey's most important city. The CHP won Istanbul on March 31 thanks to the strategic support of other opposition parties, and it is likely to have even more support this time from other AKP detractors in its battle against the government. But whether the CHP can eke out another win in what is sure to be a tight race will depend on its success in fending off the media onslaught that will come from the AKP, which controls most of the country's media outlets, as well as its ability to overcome other systemic challenges stemming from the AKP's strong hold over Turkey's institutions. The AKP's leader and the country's president, Recep Tayyip Erdogan, can focus all his attention on campaigning for Istanbul — a city the AKP is loath to lose given that it is a major source of wealth and an important site for patronage networks.

On a broader level, Turkey's domestic political turmoil will further color its government's often-turbulent interactions with the outside world.

On a broader level, the domestic political turmoil will further roil the Turkish government's often-turbulent interactions with the outside world. Already, countries in the European Union, including Germany, have criticized Ankara for ordering a new election, adding yet another issue to the many grievances Turkey's Western allies have leveled against Ankara. (At the same time, Ankara knows that Brussels cannot push too far, since the European Union counts on Turkey in the summer to prevent migrants from seeking a new life in Europe.) The AKP's need to stoke nationalist fervor in Turkey to help secure victory could result in it promoting hypernationalist positions on controversial issues like Turkey's S-400 purchase from Russia, its intentions to drill for oil and natural gas in Cypriot waters, and its anti-Kurdish militant operations in Syria and Iraq. The Turkish government will be further willing to stoke tension in the Eastern Mediterranean against Cyprus, Greece and Israel. In addition, Turkey could rail against Israel as the latter beats a war drum against Palestinian militants in the Gaza Strip, and refuse to toe the U.S. line on sanctions against Iran — although Turkey's economic woes could temper some of Ankara's obstinance.

What About the Economy?

Beyond politics, Erdogan's insistence on new elections in Istanbul will have economic ramifications, as a nosedive in Turkey's relations with its largest investment and trade benefactors, the European Union and the United States, could hurt the country's fragile economy. The lira's value versus the dollar behaved erratically leading up to and after the YSK's decision, thereby lowering investor and consumer confidence in the Turkish economy even further. Although the AKP's candidate, former Prime Minister Binali Yildirim, will likely promise some of the populist measures for which the AKP has become famous (such as subsidized food supplies), such measures won't help shore up foreign investor confidence in the Turkish economy. But by pushing for an electoral rerun, the AKP has already demonstrated its preference for possible political gain over probable economic pain.

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