What will happen next?

My last report and the things I said on television yesterday must have been attracted so much interest that I’ve been getting so many calls and messages so far. So, I’ve decided to further clarify what I said. Let’s tackle the possible outcomes of Istanbul mayoral re-run.

But, let ne first say that I do not expect Ankara to issue any negative statement about the election result, especially now the critically important G-20 Summit approaches. I’m sure no one would to see another problem which would outmanoeuvre the US President about Turkey prior to a critical President Erdoğan-Trump talk on S-400 and F-35 issues at Osaka. Besides, the fact that President Erdoğan issued his congratulations to İmamoğlu on Twitter shows that domestic politics are going to take a calm trend for a while.

I do believe that elections debates won’t end here regardless of the possibility that things will go well or not at Osaka. In my opinion, AK Party, the long-time victor in Istanbul, will shape its policy based on the opposition candidate, not the number of votes that have been casted. It’s not very hard to predict that legal action will be taken regarding certain events that took place during the electoral campaign.

  • If Trump closes the door on peaceful solutions in Osaka, then Ankara would declare that it’s not their fault that the door was shut and withdraw into itself completely, taking several actions to keep power.
  • If everything goes well at Osaka, if Turkey can skilfully overcome the S-400 issue, then Ankara would re-intensify its domestic policy considering the positive outcome of the summit a “green light” from international conjuncture.

As I mentioned earlier, if a trial takes place and the judges decide that the winning candidate has committed a crime of such nature that it prevents him from serving as Mayor, it would be a major shock for a lot of people, maybe except me. Obviously, such events would not help Turkey’s global perception improve further. I just hope I’m wrong. But, there’s this undeniable fact.

“We can’t ignore change…”

I’m an economist and a scientist; hence my duty is to make predictions about the economy based on probable scenarios. So, I feel obliged to declare that Turkey will face a snap election soon; because, the fact that Turkey’s main opposition claimed a decisive victory this time indicates that public opinion and voting behaviour have drastically changed. This is not a minute detail, thus should be taken very seriously. There is a profound axial shift in Turkish politics. I’m sure experienced politicians will do what’s necessary without ignoring this obvious change.

In the light of all the facts mentioned above, I can foresee that fluctuations in economic parameters as well as tensions in both domestic and foreign politics will create a serious volatility in interest rates and exchange rates until the end of the year. That’s why financial institutions will be very cautious about the loan terms, which would also reverberate as drastic changes in debt maturity and collection terms and conditions.