(Bloomberg Opinion) -- You can’t keep a good autocrat down. After his humiliation in the Istanbul mayoral election last month, Recep Tayyip Erdogan seemed chastened. Speaking to legislators of his AK Party, Turkey’s president said, “We don’t have the luxury of turning a deaf ear and ignoring the messages given by the people.”
He since seems to have changed his mind. Notwithstanding an election result that most analysts agree was a vote of no confidence in his management of Turkey’s economy, which is in acute crisis, the president has decided that Turks want more of the same.
Erdogan has sacked his central banker, Murat Cetinkaya, apparently because he would not go along with the president’s eccentric theories about interest rates. The replacement, Murat Uysal, knows what he has to do to keep the job, even if that results in a hammering for the lira and deepens the economic crisis. Some analysts predict the kind of collapse familiar to observers of Latin America.
If the economy needs a shove over the precipice, Erdogan’s decision to go ahead with the purchase of Russian S-400 missile-defense systems may deliver it: the imminent arrival of the first batch of hardware could trigger tough sanctions from the U.S. As we saw last year, that could be devastating for the Turkish economy.
Erdogan believes the U.S. will not impose the sanctions, apparently taking heart from President Trump’s sympathetic attitude during the G-20 summit in Osaka. But Trump did not specifically rule out sanctions, and the State Department has since repeated the threat to punish Turkey for buying the S-400.
Investors already nervous about the economic outlook will not be reassured by the latest political developments. The debacle in the Istanbul election—the first major electoral reversal in Erdogan’s career—has weakened his aura of invincibility and emboldened critics within his own party. This week, his former economy czar, Ali Babacan, quit the AKP. He is widely expected to form his own party. Other prominent critics include former Prime Minister Ahmet Davutoglu, once Erdogan’s chosen heir, and ex-president Abdullah Gul.
Babacan’s defection is potentially the most damaging: he was minister of economic affairs during 2002-07, when he steered the country out of an economic crisis. He is credited with the huge growth that followed. He has been muted in his criticism of Erdogan’s more recent economic policies, but will now feel free to open up. Like Davutoglu, he is thought to be especially critical of Erdogan’s decision to appoint his son-in-law, Berat Albayrak, as treasury and finance minister, a year ago.
That appointment rattled investors’ confidence in Erdogan’s management of the economy. But the president seems to have decided that ignoring their concerns, too, is a luxury he can afford.
To contact the editor responsible for this story: James Gibney at jgibney5@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Bobby Ghosh is a columnist and member of the Bloomberg Opinion editorial board. He writes on foreign affairs, with a special focus on the Middle East and the wider Islamic world.
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