It is not unusual to assume a correlation between the rise of the autocracy and the fall of the Turkish lira over the past two decades. In the first decade of the 2000s, the ruling Justice and Development Party (AKP) was seen as the democratizing force in Turkish politics, which has been under the tutelage of the Turkish military since 1961. During this period, the Turkish economy performed well and GDP per capita increased significantly. Meanwhile, Turkey was making reforms to obtain membership status from the European Union. Most of the intellectuals, academics and policy analysts believed that Turkey was moving towards a consolidated liberal democracy. Such achievements helped the AKP to weaken the military’s role in the system. The military elites were skeptical of the AKP from the very beginning, as the party elite came from the political Islamist tradition.
Following the withdrawal of the military, the AKP’s charismatic leader Erdoğan has gradually established his personal rule. In doing so, he has eliminated rival factions in the AKP, increased his grip over media, academia, civil society and business circles and exploited national security issues to intimidate the opposition parties. In the second decade of its rule, the AKP has turned into a private company owned by Erdoğan. In addition, after the transition from the parliamentary system to the presidential system in April 2017, Erdoğan’s personality and the institutional identity of the state overlapped. However, building an indisputable personal cult did not bring him success in the field of economy. Since the presidential system referendum in 2017, the Turkish lira has depreciated significantly against foreign currencies. While the value of 1 US dollar against the Turkish lira was 3.6 on the day of the referendum, it decreased to 13.9 in January 2021. Similarly, GDP per capita fell from USD 10,589 in 2017 to USD 8,537 in 2020. According to the Turkish Statistical Institute, annual inflation is 48 percent and most Turks believe real inflation is above this. (See: https://www.justsecurity.org/79306/might-the-turkish-electorate-be-ready-to-say-goodbye-to-erdogan-after-two-decades-in-power/)
As mentioned earlier, it is widely believed that there is a causal link between authoritarianism and economic failure. But unlike Erdogan’s Turkey, there are also some autocratic regimes where economies perform consistently. For example, such dramatic fluctuations are not common in Russia, China or Singapore, which are not classified as democratic regimes. This is because even autocracies see the economy as an autonomous field and recognize the autonomy of bureaucrats and experts. On the other hand, the Turkish economy suffers from lack of institutional capacity and bureaucratic autonomy.
If it is not autocracy, what is the problem of Turkey? To answer this question we have to visit Francis Fukuyama who excludes “democratic accountability from the definition of governance”. To him, governance refers to a government’s capacity to make rules and enforce them regardless of its regime type. In addition to that a government is expected to deliver services in an efficient way. For this reason, he sees the Weberian understanding of the state, which is based on the principles of the rule of law and bureaucratic autonomy, as the ideal type of governance. (See: https://www.cgdev.org/sites/default/files/1426906_file_Fukuyama_What_Is_Governance.pdf) From this point of view, the reason for the depreciation of the Turkish lira and the rapid decline in GDP per capita is the absence of the modern state rather than autocracy.
Following the transition to presidential system, the state apparatus has lost its neutrality and turned into a private property of Erdoğan and his inner circle. Rules and laws have been differently enforced on citizens in accordance with their political engagements. This means that Erdogan’s critics are punished even if they exercise their constitutional rights, while Erdogan’s supporters are mostly exempt from legal sanctions even if they commit crimes. This indicates how judiciary is under Erdoğan’s control. In addition, bureaucratic institutions are run by individuals who lack technical competence and are partisanly loyal to Erdoğan. For example, 68 university rectors appointed by Erdoğan have no international publication. (See: https://www.cumhuriyet.com.tr/haber/68-rektorun-sifir-yayini-var-1707261) Likewise, Erdogan bypassed the bureaucratic tradition of the Ministry of Foreign Affairs and appointed 25 ambassadors with clear ties to the AKP. (See: https://www.cumhuriyet.com.tr/haber/buyukelci-atamalarindan-dikkat-cekici-ayrinti-akpli-eski-vekil-baku-buyukelcisi-1825405) Above all, Erdogan did not allow the Central Bank to take decisions in accordance with its legal responsibility to ensure price stability. He replaced three Central Bank governors last year and most recently appointed Şahap Kavcıoğlu, a former AKP deputy and columnist for Yeni Şafak Newspaper close to the government. Erdogan’s interventions in bureaucracy, combined with his arbitrary use of state banks and the Turkey Wealth Fund, which owns state-owned companies and assets, both weakened the state’s institutional capacity and destabilized the economy. In summary, the currency crisis in Turkey is not an economic problem stemming from the democratic decline. It is about the absence of the modern state, which has been eroded by Erdogan’s personal rule. Therefore, the Turkish economy can only recover in the future if such a state crisis is resolved instead of taking temporary and tactical economic measures.
Fotoğraf: Ibrahim Rifath