As Turkey gears up for its pivotal upcoming election, on May 14, 2023, real estate investors are paying close attention to the political landscape and its potential impact on the property market. This crucial vote, which promises to be a defining moment in the nation's history, features a diverse matchup of candidates, each with their own distinct policies that could sway the country's future economic trajectory. In this article, we will delve into the profiles of the leading candidates, providing a comprehensive understanding of their backgrounds and policy proposals. We will also explore Turkey's rich political history to contextualise the current electoral contest and examine the possible consequences of each potential outcome. By the end of this analysis, real estate investors will be better equipped to navigate the evolving Turkish market and make informed decisions based on the election results.
THE ELECTION TIMETABLE
There will be two elections held on May 14 where voters will choose their new president, and also 600 members of parliament. For the presidential elections, if no candidate can secure at least 50% of the votes, a second run-off will be held on May 28 between the top two runners. Around 61 million voters will head to the ballot box on election day and it is estimated that 3 million voters abroad will likely cast their votes in advance, between April 27 - May 9.
The initial results are expected to be known on election day. At midnight the electoral prohibitions end and the broadcasters will begin to announce unofficial results.
Traditionally, the winner of the race for the presidency will declare victory in the early hours of the morning, when the majority of the ballots will have been counted. The president-elect will address the public with a victory speech. However, the announcement of the definite results by the Supreme Election Council can take a few days or even a week.
RECEP TAYYIP ERDOGAN
The incumbent, Recep Tayyip Erdoğan, was born in Beyoglu, Istanbul in 1954. He received his undergraduate education at Marmara University, Faculty of Commercial Science in 1981. Erdogan, who was elected as the Chairman of the National Salvation Party (Milli Selamet Partisi) Istanbul Youth Branch in 1976, continued his duty until 1980.
With the establishment of the Welfare Party (Refah Partisi) in 1983, he became the WP’s Beyoglu District Chairman in 1984. Erdogan who was elected provincial chairman of the Welfare Party in 1985, took part in the central party administration. Elected as the Istanbul Metropolitan Municipality Mayor in 1994, he continued his duties until 1998. With the water, transportation and infrastructure problems of the city largely solved over his tenure, Erdogan also paid the majority of the 2 billion dollar municipal debt. It contributed to the development of Istanbul and investment of 4 billion dollars in 4 year period.
Erdogan founded the AK Party in 2001 and came to power, for the first time, in 2002 with 34 percent of the vote. The AK Party which won dozens of elections between 2002 and 2023 with high votes, continues to have power. Tayyip Erdogan served as Prime Minister from 2003 to 2014 and as President since 2014 to the present day.
Kemal Kilictaroglu was born in 1948 in Tunceli, Nazimiye. Kilictaroglu is the son of a civil servant for the Alevi family. He graduated from Gazi University’s Faculty of Economics and Administrative Sciences in 1971 and later started to work as an assistant specialist in the Ministry of Finance. After a year of specialised training in France, Kemal worked as a manager within different institutions.
Kilictaroglu was appointed to BAG-KUR (Social Security Institution) in 1991, where he took charge over different time periods as the general manager. After that, he worked as a Deputy Undersecretary in the Ministry of Labor, retiring in 1999.
He started his political life in the Grand National Assembly of Turkey as a CHP Istanbul Deputy in 2002. He was elected as the Chairman of the CHP in 2010. Although he was a candidate for Istanbul Metropolitan Municipality in the 2009 local elections, he narrowly lost those elections.
Sinan Ogan was born to a farmer family in Iğdır in 1967. As a Member of a poor family, he worked in agriculture as a shepherd. He graduated from Marmara University, Department of Business Administration in 1989. He completed his master’s degree at the same university in 1992. He received his PhD from Moscow State University of International Relations in 2009.
He established the TURKSAM Research Center in 2004 and has been its chairman until present day. Since 2006, he has advised MHP Chairman Devlet Bahçeli on foreign policy. He entered the parliament as a deputy of the Igdir (MHP). He put his candidacy for the Chairman of the MHP in 2015. But he failed to achieve success. He was announced as the Presidential candidate of the ATA Ittifak in 2022.
Muharrem Ince was born in 1963 in the Elmalik villages of Yalova, After graduating from Uludag University, Department of Chemistry and Physics Teaching, Ince worked as a teacher and manager in different schools.
Muharrem Ince, who was the CHP Yalova Provincial Chairman in 1999, entered the parliament as a deputy in 2002 (The age of Ince was 38). Ince, who served as the deputy chairman of the CHP group in the parliament, was a candidate for the CHP Chairman twice, but could not win. He became the Turkey Presidential Candidate of the CHP in 2018 and received 30 percent of the votes. The Ince’s vote was 8 percent more than his party.
TURKEY ELECTION PLATFORMS
AK PARTY AND ERDOGAN WINS
- There may be a transformation in the management of the economy’s policies. A partial increase in interest rates may be seen.
- Earthquake zones will be rebuilt and the houses will be delivered within one year. It is aimed to deliver the first houses within six months. The houses will be delivered with two year no-payment and interest-free loan.
- Changes may occur in the Central Bank and Ministry of Economy. Reforms that will support the Turkish Lira will also help reduce inflation.
- Partial decrease in real estate prices and then a stable outlook. However, it is possible that prices will accelerate upwards due to construction activities in the earthquake zone.
- Political stability should continue.
- "Century of Turkey" vision and is expected to introduce his 23-point manifesto.
- The rapprochement with Arab countries may attract new investments to Turkey.
- The export-oriented growth with the help of falling energy prices, approach can reduce the need for foreign currency.
CHP AND KEMAL WINS
- There may be a lowering the electoral threshold to 3%. This decision brings many parties into parliament.
- Cancellation of the Central Bank’s relocation to Istanbul Financial Center.
- Raising interest rates by ending Currency Protected Deposits due to fluctuation in exchange rates and sharp decline in domestic demand.
- Reduce inflation to single figures in two years and increase the national income per capita fivefold.
- Starting the process of withdrawal from Syria and repatriation of refugees.
- Promises to fight corruption and vows to enhance freedom.
- Turkey will rejoin the Istanbul Convention which aims to prevent gender-based violence, protect victims of violence, and punish perpetrators.
- Plans for Istanbul Canal will be abandoned
AFTER ELECTION: THE FUTURE OF TURKEY
International Organisations have positive expectations about the Turkish economy after the election. In particular, the IMF revised data on the Turkish economy upwards. OECD, on the other hand, emphasised that Turkey will become Europe’s largest economy by 2060. PwC and World Bank also expressed their positive views on Turkey.
According to the IMF, The Turkish economy may develop as follows between 2023 and 2028. The National income of 1.029 trillion dollars can reach 1.334 trillion dollars (Figure 1).
Between the same dates, PPP could increase from 3.57 trillion dollars to 4,58 trillion dollars (Figure 2).
Foreign trade on the other hand, may exceed 700 billion dollars and set new records (Figure 3).
In conclusion, the upcoming Turkish elections on May 14, 2023, hold significant implications for the nation's political landscape and the property market. With a diverse lineup of presidential candidates, each offering distinct policy proposals, the outcome of the elections could dramatically reshape Turkey's economic trajectory. Real estate investors should closely monitor the evolving political climate and make informed decisions based on the election results. Regardless of the election outcome, international organisations such as the IMF, OECD, PwC, and the World Bank have expressed optimism about Turkey's economic future, with positive growth projections for the coming years. As Turkey embarks on this pivotal moment in its history, real estate investors and the nation as a whole country eagerly await the results, which will undoubtedly shape the country's future direction.
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