Divisions Deepen in Erdogan’s Party Over Istanbul Loss


Turkish President Recep Tayyip Erdogan’s party is continuing to suffer from the financial and political fallout of this month’s loss of influence in Istanbul during local elections. A once-close ally and former prime minister has launched a scathing attack on the ruling AKP amid growing currency woes.

“Our country cannot be left to the concerns for the future of a narrow and self-seeking group who are slaves to their ambitions,” wrote former AKP Prime Minister Ahmet Davutoglu in an unprecedented assault on his party, following the surprise defeat in Istanbul that ended years of influence. 

“It is extremely significant,” said analyst Atilla Yesilada of Global Source Partners, an emerging markets analysis service. “This is the first organized and concrete challenge to Erdogan’s rule since he came to power.”

Davutoglu’s attack found no voices of support among leading AKP members. “One thing we’ve learned about the grandees of the AKP is they are not encouraging profiles in courage,” said international relations expert Soli Ozel of Istanbul’s Kadir Has University. “They may have dirt on their hands, or maybe they are afraid to speak out.”

However, analysts suggest Davutoglu would not have dared to vent such criticism unless he had support publicly. The former prime minister focused much of his criticism on the management of the economy.

“The main reason for the economic crisis is an administration crisis. Trust in the administration vanishes if economic policy decisions are far from reality,” Davutoglu said.

The economy is in recession following last year’s collapse of the lira, triggered by a combination of diplomatic tensions with Washington and concerns about Erdogan’s interference with the central bank.

“Scaring global investors necessary to the development of the country is a dead end,” added Davutoglu.

“Whether Davutoglu forms a party or not is not the key issue. What is important is that this is a call to Mr. Erdogan to heed the segments and factions in AKP he ignores,” said analyst Yesilada. “The small and medium pro-AKP businesses, they are the ones who feel the [economic] pain most acutely,”

Under Erdogan’s 15-year rule, first as prime minister, then president, conservative religious businesses have prospered. Erdogan’s rise to power as an Islamist politician was in part built on his embrace of pro-capitalist business policies.

“In almost 60 years, those [Islamist] political parties have mostly been parochial and closed to international market-oriented economic policies,” said professor Istar Gozaydin, an expert on religion and the state in Turkey. “Erdogan’s AKP distanced itself from that approach from the start, although they have actually been coming from similar backgrounds.”

However, Erdogan’s pro-business credentials, which so successfully attracted international investors in his early years in power, are fading.

Many international investors blame Erdogan’s advocacy of unconventional economic policies for the country’s financial woes, coupled with domestic claims of cronyism, which increasingly dogs the Turkish economy.

The disputed result of Istanbul’s mayoral election is threatening to bring economic and political concerns about the AKP to a head.

Erdogan’s decision to support a petition to Turkey’s supreme election board to annul the Istanbul result and hold a revote has divided the party, with rival factions battling it out on social media.

Advocates of a repeat vote are widely linked to Erdogan’s son-in-law, Berat Albayrak, the country’s chief economic minister.

“Allegedly those wanting an Istanbul revote represent construction and media interests,” said Yesilada, “and Berat Albayrak is accused of defending the interests and privileges of this elite.”

Albayrak is already facing growing criticism within the country’s business community for aloofness and lack of accessibility. Some prominent AKP members accused those Istanbul party members calling for a revote of being motivated by greed.

“The AKP has generated enormous urban rents [in Istanbul],” said Ozel, “which they use both to help the dependent and poorer sections of society, but also to enrich contractors who in turn supported the party. So that wheel of fortune will be broken.”

However, seeking to overturn the Istanbul vote is reportedly widely seen as both politically and financially risky within AKP ranks.

The Turkish currency, already facing growing pressure, suffered heavy declines this week amid rumors of diminishing foreign exchange reserves and international and domestic confidence in the economy.

Analysts say there is growing fear that an Istanbul repeat election could be a trigger for further currency turmoil.

“I am certain they [international markets] will react very negatively again,” said Yesilada, “because the sanctity of the ballot is pretty much the only thing left over from this once-glorious Turkish democracy. Once you take that away, there is nothing left, and many people have qualms in investing in autocratic countries. Two, prolonging the election uncertainty would likely only deepen the recession as people won’t invest or buy. Everyone will sit on their money, and that will be bad for the AKP.”

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