Disturbing scenarios on Turkey’s elections and economy

Professor of Law Dr. İzzet Özgenç, who advises President Recep Tayyip Erdoğan on economic issues, stirred a debate with his social media post yesterday as he said we should be prepared for the declaration of the State of Emergency because of the current state of the Turkish economy. With this message, the efforts of the Central Bank of the Republic of Turkey (CBRT) to increase the value of the Turkish Lira against US Dollars by selling -allegedly 2.5 billion US Dollars- have gone wasted. One US Dollars was valued at 14,60 TL at noon on December 13. The dollar continued rising afternoon. As a result, both Istanbul and Ankara start to discuss “economic state of emergency” scenarios.

I recommend not to listen to conspiracy theories. Still, several scenarios are circulating, some of which even argue that Erdoğan allows the lira’s free-fall to declare a state of emergency to find a space to silence opposition and intervene in the market.

The prospect of harsh intervention rooted even deeper on December 13, when Erdoğan held a 5-hour-meeting with CBRT Governor Şahap Kavcıoğlu, general managers of public banks and new Minister of Treasury and Finance Nureddin Nebati, who had just held a 7-hour-meeting with business and finance circles two days before on December 11. The meeting came just before the meeting of the Monetary Policy Board scheduled to take place on December 16 to declare new interest rates.

Whether it will be declared officially based on Article 119 of the Constitution or issued de facto by presidential decrees, the state of emergency scenarios have been heated up in parallel with disturbing election scenarios.

Disturbing scenarios are not bubbled up for nothing

Nabati told investors that the main reason for the economic crisis was not the attack of foreign powers, as Erdogan has been saying for years, but the distrust in the government’s economic policies. This is the distrust felt by both domestic and foreign investors.

İYİ (Good) Party leader Meral Akşener expressed her concern over the discussions about the state of emergency stating that it “would lead to the bankruptcy of Turkey.”

“If we follow Prof. İzzet Özgenç’s description, that would initiate a concern that some measures such as capital control or foreign account deposits of citizens can be taken. That concern can lead up to Turkey’s bankruptcy. I urge everybody to take this matter seriously,” she told journalists in the parliament on December 14.

And the signs don’t just come “from the West”. According to Fuad Safarov from Moscow, the evaluations made in Russia also indicate that confidence in the Turkish economy has been lost. They hold the President, who exerts political pressure on the Central Bank, responsible for this.

After the Treasury and its Minister said to investors, “There is no external attack, there is distrust”, the credit rating agency Fitch downgraded the ‘Turkey Wealth Fund and 13 banks’ outlook to negative.

Özgenç posted the state of emergency message on top of these developments, and it heated up the scenarios that were in embers.

It’s not just him. On the day Özgenç mentioned the possibility of a state of emergency, different sources published reports on Turkey at both ends of the world, including specific scenarios.

One of them is the Turkey report of the Nomura Bank, one of the largest in Japan. The other is the Turkey report published by Carnegie Europe, the European arm of the US-based think tank Carnegie Endowment, titled “Understanding Turkey’s Direction: Three Scenarios.” They are basically saying the same thing.

What are those “unexpected developments”?

The Carnegie Report, one of the two authors of which is Marc Pierini, a former Ambassador of the European Union to Ankara, includes the following statement: “Given the tensions on today’s political scene and the fears associated with a loss of power by Erdoğan, it is not impossible that a number of unexpected developments could take place.”

What were those “unexpected developments”? The report reminds us of the 2015 June elections, which the AKP repeated with the support of the MHP, even though it lost its parliamentary majority. In that context, it is also emphasized that Erdogan cannot win the election without the support of MHP leader Devlet Bahçeli. It also states that he definitely wants to enter the 100th year of the Republic in 2023 as the President.

It is also remembered that when AKP lost Istanbul municipality in the local elections, and the election was repeated. The decisions taken by the Supreme Election Board, which is not subject to the supervision of the Constitutional Court, in line with the demands of power, are also carefully followed by the circles where the government expects foreign investment.

In the Carnegie report, it is emphasized that constitutionally a ‘state of war’ is required for Erdogan to delay the elections by one year, and this is not considered highly likely. However, in the Nomura report, scenarios of a “foreign policy case” followed by a “state of emergency”.

The scenario that Erdogan will not quit even if he loses

The common concern of those who look at Turkey from outside, but from circles where Erdogan expects foreign investment, is the possibility that Erdogan will not want to relinquish power even if he loses the election.

The myth that Erdogan will not go to the election he would lose was destroyed in the 2019 Istanbul election rerun. Therefore, it is discussed whether he will look for ways not to go to the elections.

The tweet of Özgenç, one of Erdoğan’s staff members, caused a stir in this environment.

The responsibility is not of those who produce these disturbing scenarios about Turkey, but those who cause these scenarios to be produced and stir the anxiety that the democratic administration in Turkey will also disappear on paper.

Unfortunately, we are going through worrying days where uncertainty reigns.