A Conversation on Turkey’s Election Decision

The night of May 28, 2023 Turkey successfully elected it’s leader for the next five years via a run-off election. Recep Tayyip Erdogan narrowly defeated Kemal Kilicdaroglu by a count of 52%-48%. This was the ending to the most anticipated election of the 21st century within Turkey. Many of Turkey’s various parties came together behind Kemal Kilicdaroglu in opposition to Erdogan, who has been in power since 2003. But, in the end, the people decided that Erdogan will continue as Turkey’s longest tenured, modern leader. 

With the results tabulated, Erdogan will now continue his mission to raise Turkey to the ranks of world superpowers. Many issues will be awaiting him upon his return to office, and investors around the world are keen to grasp the consequences and implications of Erdogan’s victory; Especially in the real estate sector.

Cameron Deggin and Alaattin Kilic sit down for a conversation about Tayyip Recep Erdogan’s election victory and what it means for Turkey’s future:

Erdogan Has Emerged Victorious. What Happens Next?

Alaattin Kilic: Today, we will talk about the Turkish election and the victory of Recep Tayyip Erdogan. Erdogan has retained the presidency and a holds significant majority in the parliament. The Erdogan’s AK Party came to power almost two decades ago and since have won more than 12 elections. That’s a record for a democratic country. This history has happened in front of our eyes. This last election was one of the hardest for Erdogan and AK Party as CHP’s Kemal Kilicdaroglu gained significant support. 

Close to 30 million people voted for Erdogan, Cameron, and this figure is the highest in the history of Republic of Turkey. The Turkish people have spoken. Why did they say, “Erdogan once again?” What awaits us as he begins another term?

Cameron Deggin: For Turkey, this was an historic election race on the 100th anniversary of the Republic. Erdogan achieved a remarkable victory. In these five years to come, Erdogan will complete his major projects and hand over Turkey as a developed country to future generations. In Erdogan’s words, after this election, the task will be handed over to the youth. Seemingly acknowledging this as his final term.

Kilic: What are the factors that have led to Erdogan’s continuous election victories, over 22 years? How does he convince people?

Deggin: Erdogan has made Turkey the 11th largest economy in the world. When he came to power, that is in 2002, Turkiye was 20th on that list. According to IMF and World Bank, now the purchasing power per capita in Turkey is over $41,000. In Istanbul, this figure is over $62,000.

Kilic: Turkey, under President Recep Tayyip Erdogan's leadership, experienced significant economic growth and development during his years in power. The country implemented several economic reforms and pursued an export-oriented growth strategy, which contributed to its economic expansion. As a result, Turkey's gross domestic product (GDP) grew steadily, and it has climbed in the global rankings. Now Turkey’s GDP has surpassed $1.029 trillion dollars. A record achievement. 

TURKEY PPP PER CAPITA (2002-2023 / US DOLLAR)

Kilic: I think we can give a certain amount of credit to Erdogan over the years. His policies may affected by rise of quality of life. This rise is reflected, and fuelled by road, port, airport and other infrastructure projects. For this reason, Turkey has attracted 266 billion dollars of investment from abroad over 22 years. Among the total investments, Europeans have a stock of $180 billion dollars. 

Turkey's focus on infrastructure projects has indeed been a significant factor in attracting foreign investment and stimulating economic growth. The development of road networks, ports, airports, and other infrastructure has the potential to improve transportation, logistics, and trade, which can be attractive to foreign investors.

That’s all in the past, for the most part, Cameron. What awaits us in this present moment and moving into the future?

Deggin: A technological transformation awaits us in Turkey. In addition, post-earthquake reconstruction and urban transformation initiatives will be the topics we will talk about most here.

TURKEY’S RESEARCH AND DEVELOPMENT PPP SPENDING (BILLION DOLLAR)

Deggin: Turkey has spent $150 billion on R&D over the past two decades. It indicates a strong commitment to fostering innovation and technological development. Such investments can lead to the creation of new industries, the development of advanced technologies, and the enhancement of human capital, which can contribute to economic progress. Much of this technology has gone into renewable energy, new industrialisation, and manufacturing.

These investments, have created 6 million jobs, which is the 12th largest manufacturing industry in the world. The sector thrives within over 79,000 manufacturing factories nationwide.

INDUSTRY PRODUCTION VALUE BY COUNTRY (BILLION DOLLAR / 2023)

Kilic: So, that’s why Turkish people voted for Erdogan! Again and again. I’m with you Cameron. 

Deggin: I know that you are doing research on Turkey’s future. What do international organisations say about the Turkish economy after the election?

Kilic: Well, if the IMF's forecast for Turkey's GDP growth is accurate, the national income is expected to increase from $1.029 trillion in 2023 to $1.33 trillion in 2028, it suggests a positive growth trajectory for the country's economy. However, it's worth mentioning that economic forecasts can be influenced by various factors, including domestic and global economic conditions, policy decisions, and unforeseen events.

Regarding inflation, experts see it stabilising it at around 20% and then gradually lowering it to 8%. This could be seen as a positive step. Controlling inflation is crucial for maintaining price stability and overall economic health for the country over the long term.

It is not uncommon for investors to monitor the assessments and forecasts of organisations like the IMF to gain insights into a country's economic prospects. However, investors typically consider multiple factors, including political stability, fiscal policies, market conditions, and regulatory environment, among others, before making investment decisions. That is why our clients trust our wholesome perspective on these topics. Our experience in the sector gives us a unique ability to take into account all the relevant factors for our investors.

End of Interview

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