For most of the 12 years Recep Tayyip Erdoğan’s Justice and Development Party (AKP) has ruled Turkey, the electoral success of the neo-Islamist party has been fueled by a booming economy. Now that prosperity is waning, Turkish voters are increasingly unwilling to turn a blind eye to the president’s democratic shortcomings.
Once-loyal AKP voters are abandoning the party in droves ahead of the general elections on June 7, motivated by a potent mixture of economic disappointment and political concerns. Firat Inci, a 32-year-old restaurant owner from the southeastern city of Siirt, has supported the AKP for years. This time, he intends to vote for the opposition.
“The name of our ruling party is Justice and Development, isn’t it?” says Inci. “But they haven’t been able to deliver justice, and the development we have seen under this government has been nothing if not unjust.”
Such shortcomings could prove a stumbling block for the government come June 7. Complaints of corruption, creeping Islamization and authoritarianism, misguided foreign policy, crony capitalism and the promotion of unfettered consumerism are increasingly being leveled at Erdoğan’s AKP, which has governed since 2002.
“After the first good years all they did was to promote rabid capitalism,” says Inci. “They invested only in the construction sector and built scores of shopping malls and luxury restaurants and hotels. In the meantime, small businessmen like us are struggling to make ends meet.”
Long lauded as an economic success story in a troubled region, Turkey averaged 7.2 percent annual economic growth between 2002 and 2006, during the party’s first term in office. This stellar economic record helped the AKP win the past two national elections.
But with unemployment at a five-year high of 11.5 percent, spiraling consumer debt, a currency falling to record lows and stalling growth, the glitter of the AKP’s economic miracle has started to wear off. An OECD report in March slammed Turkey for having the third-highest levels of income inequality and relative poverty in the OECD area, with disposable household income about 45 percent of the OECD average.
It’s hard to tell how the slowing economy has hurt the AKP’s chances of success because polls are notoriously unreliable in Turkey.
Mert Yildiz, senior economist at Roubini Global Economics, argues that the AKP deliberately failed to implement the necessary reforms that would have stabilized their initial economic successes.
“In the beginning the government stuck to the reform plan laid out for them by the previous economics minister and that worked well,” Yildiz said. “But after 2007, when they should have invested in soft reforms like the quality of education and labor market flexibility, they preferred short-term gains and quick cash flow, making construction companies with ties to the government the leading force of their economic policy. It’s completely unsustainable.”
The growth of the Turkish economy from 2002 and 2012 put money in the pockets of ordinary citizens, who went on a credit and consumption binge. Sales of cars, real estate, kitchen appliances and electronics, often purchased with money that had not yet been earned, rose. Credit cards and payments by installments were aggressively marketed. Banks peddled easy consumer credit on the street and even in neighborhood teahouses.
“It was so easy to apply for a mortgage and a credit card,” recalls 37-year-old media worker Ahmet, who did not want to be identified by his full name for fear of repercussions at work. “In 2012 I applied for a loan of 25,000 Turkish Lira ($9,500). The bank at first refused. But the real estate agent had people inside the bank, so they gave me the loan without problems.”
Things went downhill from there. When his company withheld his pay for several months because of a dip in business — a common occurrence in Turkey — Ahmet took out credit cards to help make his monthly mortgage repayments.
“After I had successfully applied for my first credit card, other banks basically threw cards at me. In order to get the first one I had to show a paper signed by my employer that stated how much I earn every month. Many companies falsify these, that’s how the system works. Soon this became a vicious circle. I don’t know what to do.”
According to findings by the Turkish Statistics Institute which were published by the main opposition Republican People’s party (CHP), almost half of all Turks are now struggling with debt, much of it amassed after banks aggressively marketed credit cards to those on middle and low incomes. Turkish consumer credit card debt rose from 14 billion Turkish lira in 2004 to 82 billion lira in October 2013. Local media report that credit card debt currently accounts for 53 percent of all consumer borrowing in Turkey, the highest among European countries.
Mert Yildiz argues that banks do not worry about bad loans, since personal bankruptcy is almost impossible under Turkish law.
“All the laws are on the side of the banks, so a person stuck in a debt spiral has no chance of escape. And since the gap between income and living costs has widened due to economic policy failures, more and more people have to use credit cards for daily expenses,” Yildiz said.
“In the past, only rich people in Turkey owed money to banks. Now it’s the poor, and their number is growing.”
Yildiz accuses the AKP of exploiting and perpetuating poverty and using social welfare to garner votes. “The ruling party uses social welfare to shackle poorer people to their party. Those who receive benefits are too afraid of losing them if another party comes to power.”
Ahmet blames the AKP for pursuing economic policies centered on personal gain for its supporters and a lack of judicial oversight in credit regulation and labor law. He, too, will cast his vote for the opposition party on June 7.
“Many of my friends are in the same situation,” he says. “We used to talk about so many things, but now we mostly talk about money and our debt. In recent years, there’s a constant fear of not being able to make ends meet.”