Weekly Hurriyet column: An economist supports the Economist!
Below is my Hurriyet Daily News & Economic Review column for this week, which you can also read at the Daily News website.
There have been interesting developments over the weekend, such as strong government reactions to the Economist article, so I plan to do an addendum sometime today. So without further delay, on to the column:
In this biutiful country of ours, we do not have the wonderful Anglo-Saxon tradition of the press publicly endorsing political parties before elections.
And for good reason. An Italian friend asked me once, during a visit by either ex-Prime Minister Tansu Çiller or ex- (headscarfed) Parliament Member Merve Kavakçı to Harvard, why we Turks always fight.
As I told him at the time, we are a polarized society. Maybe even more than in the good old days. Therefore, a public endorsement would be unthinkable in Turkey, even though everyone knows pretty much who some papers support (Zaman, Yeni Şafak), or at least do not support (Sözcü).
“The Economist” has taken the latter route, urging Turkish voters not to vote for the ruling Justice and Development Party, or AKP, in the upcoming elections next week in an article published in its latest issue. However, they do endorse the main opposition Republican People’s Party, or CHP, at the end of the article.
The magazine’s arguments are mainly political: They note that democracy is losing ground and for the sake of checks and balances, a stronger opposition is needed. They also maintain that, should a new Constitution be formed, it should be done so in consultation with other parties.
That would be ensured if the AKP ended up with less than 330 seats in the Parliament. It would need two-thirds of the 550 seats to change the Constitution in the Assembly, or 60 percent to do so by referendum. While the former is virtually impossible, there are some polls that show the party getting enough votes to achieve the latter, especially in scenarios where the Nationalist Movement Party fails to make the 10 percent threshold to enter the Parliament.
One point missing from the Economist article is the CHP’s own internal dynamics: As I argued in a Roubini Economonitor post recently, the party’s old guard, which was purged by the new leader Kemal Kılıçdaroğlu, could attempt a coup in response to a lackluster CHP performance at the elections. It is well-known that Turkish social-democrats, like amoebae, multiply by dividing. Such a division after the elections would lead to an AKP that could roam at will and be devastating for Turkish democracy.
There is also a good economic argument for a weaker AKP and stronger CHP: Turkey’s economic vulnerabilities are starting to show up on investor radar screens. I was a maverick a few months ago with my warnings on the economy, but most research houses now share my views that the economy is overheating and the current account deficit poses a serious threat. Although the Central Bank claims otherwise, we are being increasingly supported by data, as Friday’s inflation figures attest to.
And the foreign media has smelled blood as well: Just as they are finally seeing the democracy cracks in politics, they have noticed the economic fractures as well. While I normally get one interview request from foreign journalists a month, I have given four phone interviews in the last two weeks, all stories on Turkey’s economic vulnerabilities.
All this negative exposure makes a self-fulfilling Turkey-run more likely, so the AKP needs to respond with good old contractionary fiscal policy right after the elections. An AKP with less than 330 seats, taking a consensus Constitution to the referendum, would not feel the pressure to have to please the masses with more spending and be more likely to implement the necessary budgetary adjustments.
So if you are worried about the economy in addition to the sham trials, banned books, imprisoned journalists and the like, this is all the more reason for you to vote for the CHP. Especially since they now have a decent economic program, which I discuss at my blog.
Emre Deliveli is a freelance consultant and columnist for Hürriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Follow his blog at http://www.economonitor.com/emredeliveli/.
Comments are closed.
