Turkey 2020: A year-end balance sheet

The global impact of the pandemic that put its mark on 2020 seems to last long. It seems that its effects will not pass easily. The traditional January meeting of World Economic Forum in Davos, where the global economy has been discussed for decades, and the Munich Security Conference, the venue for debate on the trends of international politics, which would be held in February, have been postponed to uncertain dates in the second half of the year. The Tokyo Olympic Games were postponed in 2020 and now it seems that the 2021 calendar is also in jeopardy. The world is in a state of uncertainties, which are unprecedented for the first half of 2021. To project what awaits Turkey next year amid such uncertainties, we need to recall how it closed 2020. Here is a balance sheet.

Lagging behind in the fight against pandemic

The government had its ups and downs in the fight against pandemic. Opposition DEVA Party head Ali Babacan says “a plane full of people die each day” and if the situation is not even woırse, the credit goes to healthcare infrastructure and the priceless efforts of the healthcare professionals.

The biggest mistake of the government was loosening measures in July, almost limiting them to ad campaigns on mask-wearing, thanks to the pressure from the tourism and construction lobbies. Health Minister Fahrettin Koca had admitted that the number of cases increased after public mobility during Eid al-Adh. And only one week before that, some 350 thousand people had gathered in Central Istanbul of the re-opening of Hagia Sophia as a mosque and dispersed. The minister projected that the daily toll from Covid-19 would drop to double digits in August but the figure exceeded 200 shortly after. This line showed that the government had switched to a controlled herd-immunity system, and when it quit hiding real figures in fall, this indicated that it abandoned the herd-immunity system.

As of the year-end, 21,000 people died of the virus and some 2.2 million people got ill. At the start of the summer, Turkey was seen among the moderately successful countries in the fight against the Covid-19 pandemic, but it declined to the category of worst examples. Now the hopes are now tied to the vaccination campaign.

Sharp U-turn in economy

In a bid to avoid the effects of the pandemic on the economy, the government preferred to lower the interest rates to provide cheap loans to citizens, particularly businesses that see harm, instead of offering support in cash. This boosted loaning. On the other hand, more cash was printed – like the central banks of other countries did  – to ease the market.

However, the recovery in the construction, automotive and white goods businesses did not last long. Demand for the dollar increased even more due to the artificial low-interest rate policy of President Tayyip Erdoğan and his son-in-law Berat Albayrak, who was the Treasury and Finance Minister at the time. The plan to attract foreign tourists by hiding the real Covid-19 figures backfired.

After the election of Donald Trump, who had good relations with Erdoğan, the lira’s depreciation reached 8.5 per USD. Albayrak withdrew. Under the new economy administration that replaced him and the Central Bank governor, interest rates were increased more than twice within three months to 17 percent as of the end of the year, and the dollar fell below 7.5 liras by the end of the year.

The sole positive development for laborers was the ban on layoffs. However, the cut in wages due to the underemployment measures worsened the straits. Agricultural production was damaged, the food prices in the cities increased while the farmers’ income dropped.

The increasing role of the military in foreign policy

There were two major outcomes of foreign policy moves in 2020. Erdoğan used more military power in diplomacy to broaden Turkey’s field of influence in the region and the economy became unprecedentedly vulnerable to foreign politics.

Erdoğan showed in two areas, in Syria and the eastern Mediterranean, that Ankara is capable of spoiling games that are set without including Turkey, taking a risk of alienation in foreign politics. Germany blocked the Greek move backed by France to impose EU sanctions on Turkey. In two other areas, in North Africa and the Caucasus, Turkey secured a role for itself in the new games.

The military support of the Libyan government to keep the capital Tripoli and Azerbaijan’s liberation of its territories occupied by Armenia brought diplomatic gain despite intense reactions.

Turkey’s purchase of S-400 missile defense systems from Russia triggered new U.S. sanctions and tough debates in NATO that added to being left out of the F-35 fighter jet program.

On the other hand, Turkey showed it might be the counterweight against Russia in the Black Sea and Ukraine issue, and against Russia and Iran in the Caucasus.

As of year-end, the S-400 purchase remains the most problematic issue in Turkey’s international policy, and this is not limited to its relations with the U.S.

Slippery ground in domestic politics

In the first month of the fight against the pandemic, President Erdogan’s “approval of duty” rose to 55.8 percent, according to the MetroPoll research company.

This was above the 52.6 percent, the rate of the votes he got in the 2018 elections. The citizen wanted to trust that the government would take positive steps against the pandemic. However, according to the survey announced by MetroPoll at the end of the year, Erdoğan’s approval for duty seems to have dropped to 45.6 percent. This 10-percantage point loss shapes the year-end balance sheet for Erdoğan.

Although Erdoğan still tops the list of citizen’s approval, now Ankara Mayor Mansur Yavaş and Istanbul Mayor Ekrem İmamoğlu from the main opposition Republican People’s Party (CHP) are right behind him.

The two other figures from the AKP who made it to the top five of the list are Interior Minister Süleyman Soylu, a politician with no Islamic political background, and Defense Minister Hulusi Akar.

The People’s Alliance of the AKP and the Nationalist Movement Party (MHP) keep losing votes but the Nation’s Alliance of the CHP and İYİ Party are not gaining.

This situation allows MHP leader Devlet Bahçeli to threaten Erdoğan to make a snap election call. This forces Erdoğan to try to exclude the Peoples’ Democratic Party from politics completely, which on the other hand, splits his AKP from Kurdish voters.

Ahmet Davutoğlu and Ali Babacan, two politicians who founded their own parties after leaving the AKP, are now warming up to be on the opposition side.

In 2021, the economy will determine the domestic politics and the economy will be shaped by the government steps to support the working people and the unemployed, and foreign politics.