Inflation Hits 86%, But Erdogan’s Vital Heartland Stays Loyal

(Bloomberg) -- Turkey is contending with the worst cost-of-living crisis for decades. Food prices are up 99% and energy bills just rose another 20%. That’s in a country where half the population has to survive on the minimum wage.

For Mustafa Coban, it’s not just trying to make ends meet that’s embittered him. The pistachio seller in Turkey’s southern Gaziantep province is also angry at the government for allowing Syrians from across the border to settle when housing is getting more expensive.

Yet amid all the uncertainty of his predicament, Coban is sure of one thing: he will be voting next year for President Recep Tayyip Erdogan for the first time in three elections. “We need a statesman,” said Coban, 43.

Such sentiment cuts to the heart of why Turkey’s strongman is managing to reinforce his position in conservative heartlands when some of his nation’s economic metrics look as bad as at any time in his two decades of rule. Less than a year ago, Erdogan’s political fortunes looked to be diminishing. But the war in Ukraine, government aid for households and small businesses and an opposition in disarray have bolstered his grip on power. 

Regions like Gaziantep are critical to the outcome of the presidential and parliamentary elections expected to take place in late spring. A four-day trip in late October found many people like Coban pinning their hopes on the Turkish leader to navigate them out of the economic storm critics say he helped cause.

Erdogan’s opponents are so far unable to unite behind a challenger who can win the confidence of the wider electorate and build on local election victories three years ago in the biggest cities, Istanbul and Ankara.

Kemal Kilicdaroglu, who heads the CHP, the biggest opposition party, has urged voters to “try Kilicdaroglu,” but it’s unclear whether his allies from five other groups will agree to back him. The bloc is yet to merge separate plans to heal the economy and publish a roadmap.

The president and his AK Party, meanwhile, are promising the equivalent of $32 billion in aid for energy bills, as well as tens of billions for social housing, tax amnesties and cheap loans while pledging early retirement for millions of people. Erdogan’s reliance on cheap money to keep the economy growing has also helped many small businesses to avoid bankruptcy after the pandemic.

He is also gaining kudos for NATO member Turkey’s increasingly independent foreign policy, balancing support for Ukraine fighting the Russian invasion while cultivating ties with Moscow.

“The opposition’s performance has been disastrous for me,” said Coban, as he took payment from a grumbling client over rising pistachio prices in a shop where packs of the nuts were piled high. “What is important for me is to have a strong leader who can resist foreign powers and Erdogan is that leader without a question. There is no alternative.”

Erdogan visited Gaziantep on Nov. 5 to inaugurate dozens of factories and a railway. He told a rally of supporters that his government invested 52.5 billion lira ($2.8 billion) during his time in power, building schools, roads, houses, hospitals and universities as well as a football stadium in the region. “Those who want to see what the Turkish economy program is should look at Gaziantep,” he said. 

A late October survey by Metropoll showed approval for Erdogan was 47.6%, up from about 39% about a year ago. Support for the AKP stood at 31.9%, excluding undecided voters, up from about 26% in November last year.

“Erdogan has a great advantage of using any means at his disposal as the head of the state and the government without confining himself to any norms that could make the election a fair competition,” said Nihat Ali Ozcan, a strategist at the Economic Policy Research Foundation in Ankara. 

For years, Erdogan’s ability to build a strong economy was the crux of his support, but a growth-at-all-costs policy has sent inflation spiraling and the lira crashing against the dollar by more than any other emerging market currency in the world. Opponents of Erdogan, 68, have accused him of accelerating price increases by leaning on the central bank to slash borrowing costs ahead of elections.

From pistachio orchards on the banks of the Euphrates river to the heart of a nearby industrial city, farmers, small retailers and workers at baklava dessert shops or kebab restaurants — low-paid Turks who have formed Erdogan’s grassroots — are withering under rampant inflation.

Loyalists, though, are counting on Erdogan’s claim that their suffering is “temporary” and taking the official line, delivered by mainstream media, that it’s not unique to Turkey. The government is also heavily subsidizing electricity and gas bills as Erdogan relies on his rapport with President Vladimir Putin to seek discounts for increased energy imports from Russia.

“Inflation is a global problem,” said Omer Asim Mazioglu, 24, speaking from behind a giant tray of baklava glistening with syrup in Gaziantep. “Our country may be going through tough times but there is no one else but Erdogan who can lead the country.”

The splintered opposition is struggling to respond

Kilicdaroglu, 74, surprised his allies when he proposed a bill to ensure free use of Islamic-style head scarves in state offices in an attempt to win support of conservative voters.

Yet women have been wearing head coverings in government workplaces for years under Erdogan, who has now also mooted amending the constitution to do away with all restrictions. “Let’s deal with bleeding wounds, not healed wounds,” Meral Aksener, leader of the nationalist Iyi Party, said of Kilicdaroglu’s bill proposal.

A plan to ease unemployment currently at 10% by hiring private secretaries for millions of village or district officials has also hardly convinced voters. In Gaziantep, resentment over competition for jobs with cheap Syrian labor is widespread in addition to rising cost of living. The province is home to about 500,000 Syrians compared with about 2 million Turkish residents. 

“My friends are unable to find jobs or houses due to high demand from Syrians,” said Mehmet Deveci, 22, adding that Erdogan should not have allowed refugees to settle in residential areas. “But this is just a little criticism. I am ready to vote for him.”

To defeat Erdogan in the presidential race, opposition parties must rally behind a candidate that can also lure support from supporters of the third-largest party in parliament, the pro-Kurdish HPD. The group has emerged as kingmaker in past elections, though is now facing a potential ban because of alleged ties to separatist Kurdish militants.

But even Kilicdaroglu, an ethnic Kurd and member of the Alevi religious minority, may not be the right candidate, according to one of his allies. A senior member of the Iyi Party questioned whether he can muster the support of Sunni Muslim voters who are crucial to ending Erdogan’s rule. 

There are other potential challengers from the CHP, though they have yet to declare if they would run. Istanbul Mayor Ekrem Imamoglu was able to draw support of Kurdish voters in the last local elections and indicated recently that he was willing to put his name forward. Ankara Mayor Mansur Yavas, a conservative nationalist, is another possibility.

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