In Turkey, as in many other countries in the world, the coronavirus emergency and economic crisis are the hottest topics on the political agenda. The economic consequences of the pandemic have had and are having serious effects on an already rather fragile economy. The risk of a new currency crisis is real given the collapse of the Turkish currency against the dollar.

Turkey, domestic politics

From the political point of view, the management of the emergency caused by COVID-19 and the need to avoid the spread of contagion have fostered further restrictions on freedom of expression (in a country that has experienced a setback in the democratic process and a deterioration of the rule of law in recent years).

The government of Ankara has adopted the first measures to contain the pandemic since mid-March and, as in many other parts of the world, many economic and non-economic activities have been closed or suspended (mosques, restaurants, schools, universities, etc.).

It is important to point out that a total lockdown has been decreed only during weekends, in some cases extended for several days to coincide with National Sovereignty and Children’s Day, the beginning of Ramadan (from 23 to 25 April) or during other national celebrations (from 16 to 19 May). During the week, however, Turkish citizens between the ages of 20 and 65 continued to circulate and various economic sectors, such as construction-related activities, did not stop.

In terms of health, the country has responded efficiently to the pandemic at the moment, thanks to a capacity of 46 places in intensive care for every 100,000 inhabitants (currently 60% used), free treatment for all Covid-19 patients and, above all, thanks to a long process of modernization of the health sector, starting in 2003, thanks to huge State investments.

As in many other countries, there is an internal clash regarding the numbers of infected people. The main criticism came from the Turkish doctors’ association, according to which the real cases are higher than the official figures released by the Ministry of Health.

In an attempt to criminalise these criticisms, the Turkish government has implemented a further tightening of the information system, expanding controls and labelling as “fake news” all news contrary to official figures, which has also led to the arrest of journalists accused of “spreading panic” among the population with false news about the pandemic and to investigations against those who have published critical posts on social media.

The opposition has criticized some of the measures implemented by the Turkish Government to combat the pandemic, considered as a pretext to increase the executive’s control over the country’s political life and also to place further restrictions on individual freedoms in a country where the centralization of power in the hands of President Recep Tayyip Erdogan has increased in recent years.

Among the most controversial measures is certainly the closure of the National Assembly from mid-April for a period of six weeks.

The last act of the parliament was the promulgation of an act regarding the release of thousands of prisoners. This was done by the Justice and Development Party – AKP (the ruling party) and the Nationalist Movement Party – MHP (its ally).

The aim of this measure was to prevent the spread of contagion in overcrowded Turkish prisons. However, this did not affect all the people, more or less 50,000, who have been imprisoned in recent years on summary charges, including dozens of journalists and members of the Kurdish opposition party, in the wake of the purges conducted by the government after the failed coup d’état in July 2016.

Other internal clashes concern, for example, the removal of mayors from cities in south-eastern Anatolia, who are accused of aiding and abetting terrorism and are replaced by commissioners appointed by the government.

Recently, of the five Kurdish mayors removed, four have been arrested, while at least 21 are the “first citizens” currently in prison.

On the other hand, the 45 municipalities, out of a total of 65, won by the Peoples’ Democratic Party (HDP) at the administrative elections in March 2019, were brought under administration. This appears as a real government campaign against the Kurdish inspired party, the third political force in the country, considered to be the political expression of the Kurdistan Workers’ Party (PKK).

A further clash that escalated during the pandemic concerns the government and some municipalities governed by the first opposition party, the Republican People’s Party (CHP), which governs the large cities of the country (Istanbul, Ankara and Izmir).

The mayors’ fundraising campaigns to support the population during the health emergency were therefore declared illegitimate by the central authorities.

The move by Erdogan’s government, which has itself launched a fundraising campaign, appears to be an attempt to undermine the electoral consensus of the administrations led by the Republican People’s Party.  Specifically in the city of Istanbul, where Ekrem Imamoglu’s victory in June 2019 was a severe blow to Recep Tayyip Erdogan. In fact, the Turkish president had stated several times during last year’s election campaign that “whoever wins Istanbul wins the country”.

Thus, it appears that the Turkish President is instrumentalising the Covid-19 emergency in an internal and electoral manner to strengthen his image and consensus base within the country, while at the same time trying to delegitimise the opposition. In particular, those popular figures, including the mayor of Istanbul, Ekrem Imamoglu, who many indicate as Erdogan’s potential challenger in the upcoming presidential elections. In fact, according to the latest Metropoll polls, the popularity of the Turkish President in February 2020 had reached the lowest level, 41.1% of the consensus, since the currency crisis in August 2018.

This percentage, however, rose to 55.8% the following month, the first of the pandemic, only to decline the following month when the economic effects of the health emergency began to be felt and fears of a new currency crisis became more concrete. Although the next election is still far away (2023), Recep Tayyip Erdogan knows that the economy will be the thermometer of his success.

Turkish economic situation

Regarding the economic situation, the consequences caused by the health emergency are quite serious and worrying, especially in a country that was already strongly affected by the currency crisis of 2018 and the recession that has followed. At the moment, however, according to a recent survey of 74% of respondents, the concern does not seem to derive from the economy but from the duration of the pandemic and the pandemic itself.

However, the growth estimates published in April by the International Monetary Fund (IMF) are quite worrying. In fact, Turkish GDP is expected to contract by 5%, in the wake of a recession in the global economy of 3% in 2020, with an unemployment rate of around 17.2%.

Moreover, Turkey, already hard hit by the strong contraction in domestic consumption, tourism and exports, has to face two important aspects: limited currency reserves (which fell to $25 billion in mid-April) and high foreign debt of $172 billion.

In the last year, instead of adopting the necessary structural reforms, the government has stimulated economic growth through lower interest rates. After the removal of the Turkish Central Bank Governor Murat Cetinkaya in July 2019, his successor Murat Uysal returned to the policy of low-interest rates, dear to President Erdogan, implementing further cuts: in less than a year, the interest rate went from 24% in July 2019 to 8.25% in mid-May.

This reduction, which had the main aim of stimulating growth and loans for businesses and households, risks to increase the vulnerability of the Turkish currency and increase inflation (11.9% in March). In fact, the main concerns relate to the stability of the Turkish lira, which lost about 17% of its value against the dollar from January to the beginning of May, with the unwarranted risk of a new currency crisis.

Despite the economic and financial difficulties Recep Tayyip Erdogan has ruled out the possibility of seeking help from the International Monetary Fund, although many economists are pointing to IMF loans as the only way forward.

To seek financing to repay its external debt, the Turkish government turned to the United States to access the Federal Reserve’s (Fed’s) dollar liquidity through the opening of swap lines, in the wake of what the Fed had already done to other countries (including Singapore, South Korea, Mexico and Brazil) during the emergency. However, Turkey is not only looking to the United States, which has not yet given positive responses, but also to other countries including China, Japan, Great Britain and Qatar.

Qatar is the only one so far to have given a concrete response.

Ankara and Doha have in fact recently extended the swap agreement already in force since the summer of 2018, which allows Turkish lira to be exchanged for Qatari riyal, increasing it from 5 to 15 billion dollars. The rich emirate thus confirms itself as Recep Tayyip Erdoğan’s main ally in a prolonged phase of regional isolation that characterizes both countries.

In order to try to give the country’s economy a breath of fresh air, the government decided to reopen activities at the end of May, at the end of Ramadan.

The resumption of large-scale tourism activities is one of the government’s most important hopes. In order to achieve this hope, Minister of Culture and Tourism Mehmet Nuri Ersoy launched a project called ” tourism health certification” to ensure health safety standards on airlines, airports and tourist sites. It should be remembered that the tourism sector is one of the most important for the economy of Turkey.

Turkey is in fact the sixth country in the world for international tourism destination and in 2019 the turnover was around $ 35 billion (17% more than in 2018). In addition, it also started “health tourism”, i.e. the possibility of entering Turkey for those who come to the country for health care and beauty treatments, from 31 countries of the Middle East, Central Asia and Europe (Germany and Great Britain).

Turkey in the international context

From the point of view of international relations, Turkey is implementing the so-called “coronavirus diplomacy”, through medical aid (tons of masks and other medical protection devices thanks to well-prepared textile and manufacturing sectors) in more than 50 countries around the world from Pakistan to China, from Africa to the Middle East (including Israel, despite the bad relations especially concerning the Gaza Strip) and from the United States to Europe.

This “coronavirus diplomacy” implemented by the Turkish government could lead to a détente in relations with the United States and Europe, in a phase in which the country is seeking financial support for its economy. Through this international health aid policy, Turkey is, therefore, trying to ease the isolation in which the country has found itself in recent years (mainly due to an increasingly muscular policy) but also to relieve tensions and re-establish bilateral relations with its old allies, primarily the United States, in a particularly critical phase for the Turkish economy.

The objective of mending bilateral relations with the United States led Turkey postponed the activation, scheduled for April, of the S-400 missile system purchased by Russia (although officially due to the Covid-19 emergency).

The path of the dialogue was also taken with the European Union and its Member States, after the opening of the border between Turkey and Greece by the government in Ankara, which had caused the umpteenth escalation of tension with Brussels and other European capitals.

Turkey’s decision to open the border came after the killing of over thirty Turkish soldiers by the Syrian army in Idlib, where Ankara troops are stationed to monitor the de-escalation zone established in Astana in 2018.

The advance of Bashar al-Assad’s army into the last rebel stronghold in Syria had triggered in Ankara the strong (and not unfounded) fear of seeing those 3 million Syrians who in recent years have arrived in the north-western enclave from other parts of Syria reconquered by the Damascus military.

Hence Ankara’s attempt to exert pressure, using “the pawn of migrants”, on Europe and NATO to support it in its Syrian policy in a phase when the agreement with Moscow seemed to be creaking.

Turkey has, therefore, criticized Europe for its lack of sharing in the handling of the migration issue and for not having respected the agreement in all its points.

Ankara’s plans focus on several points: the EUR 6 billion of aid for the reception of migrants has not been paid directly to the government, the failure to liberalise visas for Turkish citizens in the Schengen Area and the deadlock in the process of modernisation of the Customs Union with the EU since 1996. Turkey’s process of becoming a member of the European Union is still at an impasse and it is very unlikely that negotiations will resume in the near future.

The EU has been and remains strongly critical of the decline of democracy, the rule of law and freedom of expression in Turkey, as well as the country’s military projections in Syria and Libya and also of its proactive policy in the Eastern Mediterranean. With regard to this last point, tensions with the European Union also remain due to the gas explorations that Turkey has been carrying out for a year in the eastern Mediterranean, also on behalf of the Turkish Republic of Northern Cyprus (in what the Republic of Cyprus claims to be its exclusive economic zone).

The agreement on the demarcation of the respective exclusive economic zones signed at the end of November 2019 with the Government of National Accord (GNA) of Fayez al-Serraj (whose legitimacy has been questioned by Cyprus, Greece, Egypt and Israel) widened the dispute with all the states bordering the Eastern Mediterranean.

Regarding the Syrian front, the agreement between Recep Tayyip Erdogan and Vladimir Putin, signed in Moscow on 5 March, established a ceasefire, which, although fragile, seems to be held at the moment.

In addition, the two parties reached an additional agreement to the Sochi Memorandum of November 2019 which includes three important points: the recognition of the de facto control of the regime on the Damascus-Aleppo motorway, Turkey’s commitment to create a mechanism for a safe zone around the Latakia-Aleppo motorway (the M4) together with Russia and finally both parties’ commitment to the fight against terrorism (specifically the jihadist group Hayat Tahir al-Sham (HTS)).

Finally, on the Libyan front, it is thanks to the constant military support of Turkey that the Government of National Accord (GNA) has managed in recent months to regain ground on the field against the army led by General Khalifa Haftar.

Beyond the defence of economic and energy interests, the Turkish military intervention in Libya is also driven by geopolitical competition with Saudi Arabia and the United Arab Emirates and also by ideological motivations.

It is no secret that the support for the “Cyrenaica General” given by Riyadh and Abu Dhabi is motivated as much by the desire to extend its influence in North Africa as by the need to oppose the groups affiliated to the Muslim Brotherhood who support al-Serraj and who in turn have been supported in recent years by Turkey together with Qatar.

In conclusion, the spectre of an economic crisis would certainly reduce both the foreign policy ambitions in the enlarged Mediterranean by the governing party, led by Recep Tayyip Erdogan and its domestic stability.

By Michele Brunori