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Turkey's 2024 municipal elections took place against a turbulent economic backdrop, casting shadows on Recep Tayyip Erdogan's ruling Justice and Development Party (AKP).
With the nation grappling with a severe cost-of-living crisis, the election was not only a battle for control of local government, but a referendum on AKP governance, particularly its management of the economy
The strategic battle for Istanbul
No less than Istanbul, the economic and symbolic capital of Turkey, has emerged as the big trophy of this election.
With an economic output of about 130 billion euros, accounting for 30% of Turkey's total GDP, the city is a powerhouse of industry and tax collection. The Istanbul Municipality, which governs more than 16 million people, exercises a'Significant influence on trade, finance and tourism. Its $16 billion annual budget and 40,000 employees make it a crucial checkpoint that many voters felt should not remain under AKP rule.
A feeling is driven by the fear that AKP would exploit Istanbul's resources to navigate out of the financial dead end, potentially at the expense of the city.
Erdogan's financial gamble
The Turkish economy in recent years has been a high-risk gamble under the leadership of President Recep Tayyip Erdogan. Since 2021, the nation has been trapped in an unstoppable inflationary crisis, which many directly attribute to Erdogan's unorthodox economic policies.
Against all economic theory, Erdogan has long argued that lowering interest rates is the solution to fighting inflation, a position that has caused considerable debate and concern among economists and the public.
Inflation in Turkey peaked at 85% in October 2022. A crisis that did not emerge in a vacuum, but is partly the result of Erdogan's insistence on pursuing a dubious strategy.
After his re-election in June, Erdogan appeared to recognize the need for a Shift to more conventional economic policies, symbolically marked by the appointment of a former Merrill Lynch economist as Minister of Finance and a Goldman Sachs veteran as Governor of the Central Bank.
These appointments signaled a departure from previous strategies, as evidenced by the subsequent Doubling of interest rates from 8.5% to 15% to 45% in January.
Despite these aggressive adjustments, the official inflation rate has risen again to 67%, underscoring the persistent challenge of stabilizing the Turkish economy. The depreciation of the Turkish lira-which has lost 40% of its value against the dollar over the past year and nearly 83% over the past five years-further illustrates the depth of the economic crisis.
Inflation and public opinion
Inflationary pressure has weighed heavily on Turkish citizens, eroding purchasing power and exacerbating the cost-of-living crisis. Although Erdogan's administration has doubled the minimum wage of the country in an attempt to mitigate the impact, many believe that this move has only further fueled inflation.
The discrepancy between official inflation rates and inflation experienced by citizens in their daily lives has become a point of contention, highlighting a gap between government reports and the realities faced by Turkish citizens.
For many Turkish voters, the election was. A referendum on Erdogan's economic policies.. Day-to-day problems related to high prices of basic necessities, combined with wages that have failed to keep up with inflation, have driven a wedge between the ruling party and its base.
The opposition capitalized this discontent by promising a return to more orthodox economic policies and addressing people's immediate concerns, such as the cost of living and job security.
The strong defeat in Istanbul is symbolic for Erdogan, who once observed: "Whoever wins Istanbul, wins Turkey.". The city, being the economic center of Turkey, has always been seen as a microcosm of the country's broader political and economic trends.
The opposition's victory in this city not only calls into question the AK Party's hold on power, but also suggests a desire for change by the electorate, tired of economic instability and looking for new leadership to lead the country.
The implications for the Turkish political landscape
The election underscored theUrgent need for economic reform. With the opposition now controlling important municipalities, it will be necessary to show that they are capable not only of criticizing current economic policies, but also of implementing effective solutions to stabilize the economy and improve living standards.
This could involve revising monetary policies, attempting to attracting foreign investment that had underpinned Turkish economic growth in recent decades and to address the structural issues that contributed to the inflation crisis.
The opposition's victory may also stimulate a broader discussion on governance and democracy in Turkey, presenting an opportunity to revitalizing institutions.
What is unlikely instead is that there are consequences in Turkey's foreign policy.
Although new city leaders, future presidential candidates, may support policies that strengthen Turkey's ties with Western allies, its role in regional conflicts would hardly change.
Italy and Turkey are entangled in an intricate relationship of cooperation and competition, especially in the Libyan chessboard and in the eastern Mediterranean, where Ankara has replaced the historic Italian presence in the former colonies with its military and economic influence.
As the Sublime Gate goes through a period of turbulence, the eyes of the world will be watching to see how these changes will affect its trajectory, both domestically and internationally.
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