Will Joe Biden’s victory signal a shift in Turkey?

Berat Albayrak, the son-in-law of Turkish president Recep Tayyip Erdogan, suddenly quit as finance minister on November 8 after his wife’s father sacked the Central Bank governor overnight as the country careered towards a possible second financial crisis in two years.

As with Cummings’s departure in the UK, Albayrak’s move has led to speculation that the troubled country’s leadership might be ready for a ‘reset’ that would pull it back from the brink where it teeters as a result of the coronavirus pandemic and questionable policy decisions. Has Erdogan – under pressure for his quirky economic policies, rising food prices, growing worries about Covid management and belligerent foreign policy – had a reality check?

Albayrak’s surprise resignation, announced with an odd Instagram post citing health and family reasons, went unreported by the Erdogan-loyalist Turkish media until it was accepted by the president a day later.

Then, it was greeted with jubilation by politicians, liberals fed up with Erdogan’s chumocracy, and the financial sector, with the previously freefalling lira recovering by more than 5% against the dollar almost immediately. It was the biggest jump since 2018, when Erdogan established himself in a new superpresidential role of his own creation, abolished the role of prime minister and appointed Albayrak to the Treasury and Finance Ministry.

The son of a wealthy Istanbul business family, questions over Albayrak’s unsuitability for the job had been highlighted ever since he first joined the cabinet as energy minister in 2015. Now, with shares also rallying upon his downfall, the verdict was clear – anything was better than the sharp-suited Albayrak, husband of Erdogan’s eldest daughter, Esra:  “On its first day in office, the empty cabinet chair inspired confidence in the markets,” quipped the satirical news site, Zaytung.

Erdogan usually defends ministers from attack and refuses resignations, making his willingness to let Albayrak go even more significant. He has appointed loyal but experienced and well-regarded former ministers to the Central Bank and Finance Ministry jobs with a brief to stem the economic tide.

The first task of the new Central Bank governor, Nabi Agbal, was to oversee a dramatic rise in the benchmark interest rate to 15% from 10.25 in order to stem inflation – dismissing, with Erdogan’s blessing, the president’s unorthodox theory that interest rates cause rather than curb inflation.

The lira soared further to its best performance in two decades. In the previous 12 months, the Central Bank had spent 100 billion dollars’ worth of currency in a vain attempt to stabilize the lira without imposing high borrowing costs, draining its reserves.

“At a cost of billions of dollars, we have once again learned that interest is (at least in the short term) a solution,” former Central Bank governor Mahfi Egilmez tweeted. “Let’s not forget this again because we don’t have any money left.”

In the same week, Erdogan evoked a “new economic era” in a speech also referencing judicial and institutional reform. 

“We won’t shy away from sacrifices as a nation and, however bitter, will implement the correct remedy,” he said. “We’ll do this without compromising the rules of the free market, and by increasing transparency and predictability,” mobilising domestic and foreign investment.

“Turkey has the chance to do things differently,” explained former diplomat Sinan Ulgen, who now chairs the think tank EDAM. “Turkey’s government has started taking steps toward a more rational approach.”

This all begs the question – has Erdogan, the 21^st century’s pioneering blusterer-in-chief, finally caved? Since he took sole control of Turkey, railing against financial and diplomatic orthodoxy, disdaining good advice and refusing to court strategic friends around the world has kept him in office, but uncomfortably.

Erdogan’s aggressive foreign policy has seen him fighting a dizzying combination of battles on multiple fronts and constantly ending up on the wrong side of the argument.

His latest foray was in the Caucasus, where Turkey aided and armed its Turkic ally Azerbaijan in its reignited war with Armenia over the long-disputed enclave of Nagorno-Karabakh.

Eventually, Russia brokered a ceasefire as part of the Minsk group (also including France and the United States, but not wannabe influencer Turkey) between the two former Soviet satellites, leaving Turkey out in the cold.

Russia and France are among those joining forces to face down Turkey in the Mediterranean as Erdogan tries to assert his country’s rights to explore for energy in the sea that laps its southern shores. Greece, Cyprus, Israel, Egypt  and Cyprus have condemned Turkey’s insistence on seismic exploration near Cyprus. The EU has threatened sanctions.

Erdogan has also developed a sideline beef with Emmanuel Macron, calling out the French president’s stridently secularist reaction to the murder of a schoolteacher by a Chechen jihadist as Islamaphobic, and suggesting he see a shrink. He cheerled a Muslim blockade of French products – rhetorically at least, since neither Turks at large nor his own wife, with her penchant for Hermes bags, seemed to take much notice.

Turkey’s excursions into Libya – where it funnelled arms and fighters in support of the internationally recognised Government of National Accord (GNA) – left it wrongfooted after Russia, France, Egypt and the United Arab Emirates backed the rebel Libyan National Army.

The UN negotiated a ceasefire between the warring parties, foreign fighters were ordered out and Erdogan criticised the pact, doubting it would hold. Also finding no favours was Turkey’s incursions into Syria – where its desire to foil any Kurdish administration that would link with Turkey’s own Kurdish separatists has pitted it against Western-backed militia fighting ISIS.

Erdogan’s angry reactions and the furores they cause overshadow any justified grievances Turkey may have. Erdogan is not the only one to suggest that Macron’s outpourings against Islamist terror has flown dangerously and provocatively close to a full-blown critique of the Islamic world. And why was Turkey largely left out of agreements over Mediterranean exploration, for instance?

“In France, Erdogan-bashing has become a national sport,” wrote US-based French academic Alain Gabon in an essay for Middle East Eye, focusing on the Turko-French tussle in the Mediterranean. “Despite its great isolation, with only the Libyan Government of National Accord (GNA) and northern Cyprus on its side, Turkey’s grievances, needs and claims are perfectly legitimate, and the international community should recognise them as valid. But there is little chance this will happen.”

Still, so far he has escaped international sanction, largely thanks to the equally fiery incumbent of the White House. Reportedly Erdogan had good rapport with Donald Trump, so when he wanted to push Turkish troops into Syria, US forces pulled back, and the US refrained from imposing threatened sanctions for fellow Nato-member Turkey’s purchase of Russian S-400 missile system.

But president-elect Joe Biden has called Erdogan an autocrat, and criticised Turkey’s role in the Caucasus and Syria. He could well take a harder line on the S-400s. Any US penalties on Turkey could embolden the EU to make good its own threats.

Respected political commentator Murat Yetkin wrote in his popular Yetkin Report blog that Biden was key to Erdogan’s apparent epiphany. “When Erdogan says ‘the world is changing’ it’s not just about Covid. He has finally realised that restoring the economy depends on finding a new basis for a relationship with the US and the EU.”

Erdogan’s reformist speech on November 11 has unleashed others. Soon afterwards, his justice minister Abdulhamit Gul declared: “Let justice be done, whatever the consequences.” Justice should not depend on personal intervention or conjuncture, he added, but on “the evidence, the law, conscience and the constitution.”

A statement of the obvious, normally, but strong words in the context of a judiciary that currently has 174 journalists behind bars and another 167 on the wanted list (according to the Stockholm Center for Freedom).  Soon after Gul’s speech, a board of top judges and prosecutors was reviewing the case of the businessman and philanthropist Osman Kavala, Turkey’s most prominent political prisoner, who has spent more than three years in jail without conviction.

All signs seem to point to a retreat from positions entrenched after Erdogan took sole control of the country. Yet it is possible to read things another way.

In the Caucasus, Russia may present itself as the winner, but Turkey helped its ally Azerbaijan make humiliating territory gains from Armenia. In other areas, such as Syria and Libya, where Turkey used its growing military resources to intervene yet was left off the negotiating table, Ankara still believes it influenced the game. If Turkey thinks its stance is working, any conciliatory ‘reset’ could be mere spin on an old tactic.

As for Albayrak, he had become rude and arrogant, and many government MPs couldn’t bear him. The last thing Erdogan needs is a rebellion during an economic slump. By allowing Albayrak to go and announcing reforms, he could be preparing for elections before things get even worse. A serial early election caller, Erdogan also has form in becoming reasonable and inclusive either side of one.

But Albayrak is still family and knows where the bodies are buried, especially when it comes to persistent corruption allegations. He could return to government later, casting doubt on the narrative of a spectacular break-up as Erdogan finally sees the light.

“The reason he is returning to the reform mantra of his first two terms in November 2020 is that he himself sabotaged his own reforms and (now) has great need of foreign investment,” explained veteran columnist Taha Akyol, who had supported Erdogan in his first years as a pro-Western, pro-markets reformer, before he scared off international money.

With his centralised, personalised presidential system and the weak cohort around him, the question is, can Erdogan actually achieve the required independent judiciary, strong parliament and free press to lure investors back, even without the block of the far right party that props up his government?

And if he could, would he, when the only way involves limiting his own powers?