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Erdogan’s economic reckoning

By Anne O. Krueger

27 Jun 2023 · 3 min read

informed Summary

  1. Turkish President Recep Tayyip Erdoğan was able to sustain his populist spending spree until a national election in May. But now, reality will bite – and it will not be pretty, Anne O. Krueger writes in PS.

ISTANBUL – Turkish President Recep Tayyip Erdoğan’s victory lap following his re-election last month will be short, because his country is on the verge of economic meltdown. Turkey’s economy was also in crisis when Erdoğan’s Justice and Development Party (AKP) first came to power, in 2002. Back then, Turks overwhelmingly wanted to join the European Union, so the AKP’s government, which Erdoğan led from 2003 until 2014, when he became president, implemented economic reforms and applied for membership.

By 2010, those reforms were working as intended. Per capita income had tripled, leading the World Bank to classify Turkey as an upper-middle-income country. The inflation rate had fallen to single digits from a peak of over 100%, even as the economy grew rapidly. But despite this progress, EU accession negotiations had stalled. With the prospect of membership fading fast, Erdoğan began to turn his back on Europe. His new political strategy was to appeal to the religiosity of rural Turks, a move that entailed a shift from technocratic competence to authoritarian populism.

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