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Political Stability Embraces Turkey After the Ruling Party's Landslide Victory on Sunday's Turkish General Elections

Posted on 2008-07-08 15:50:59



Erdogan's Islamist party wins Turkey's election

Turkish elections

The landslide victory of the current ruling Justice & Development Party (AKP) in last Sundays parliamentary elections in Turkey received a strong welcome from Turkeys thriving financial markets and with very good reason too. Let's have a quick look at the reasons behind the optimism in the Turkish financial sector after the Turkish elections results.

Since 2002, The AKP has presided over significant economic growth in Turkey. Annual economic growth rate averaged 7% and the national budget deficit has been reduced from nearly 15 per cent of gross domestic product to just 0.7 per cent of GDP in 2006. Supported with an IMF programme, inflation fell from over 70 % to under 10 % for the first time in the living memory of Turkey's young and dynamic population. The Turkish stock market has quintupled in value. Turkish economy is certainly not without some serious concerns, however, investors and the more savvy population are pleased that Turkey will remain under the same management, whose performance since 2002 has been exceptional.


Implications of Sunday's election results for the Turkish property sectors?

From a foreign investment viewpoint, the result could not have been more promising. Unlike the Nationalist (MHP) and Republican party (CHP),

the Justice & Development Party (AKP) is strongly pro foreign direct investment in Turkey and more importantly actively involved in expanding the level of foreign investment in Turkish real estate. It was indeed the AKP that pushed through the parliament the real estate law enabling foreign nationals to purchase real estate in Turkey.


By Amberin Zaman in Ankara

Last Updated: 1:37am BST 24/07/2007


Turkey's prime minister, Tayyip Erdogan, won a landslide victory in yesterday's parliamentary election for his Islamist-rooted party but was quick to pledge adherence to secularism and continued economic and democratic reform.


With nearly all votes counted, Recep Tayyip Erdogan's Justice and Development Party (AKP) won an estimated 47 per cent, but a more united opposition means it may end up with fewer seats. It was the first time in a Turkish election that a ruling party had impoved its standing, giving the AKP a very strong mandate.


Mr Erdogan, speaking at his party headquarters in Ankara, with confetti flying through the air and fireworks lighting up the sky, sought to appease secular opinion. "Democracy has passed a very important test," he said. "Whoever you have voted for... We respect your choices. We regard your differences as part of our pluralist democracy. It is our responsibility to safeguard this richness."


Analysts were forecasting that the ruling party had won some 340 seats in the 550-member Parliament, a reduction from the nearly two-thirds majority it had before. That will allow Mr Erdogan to form another government without any need for coalition partners. But he would probably still be short of the target of two-thirds of the seats needed to enable the party to rewrite the constitution - and risk a confrontation with the army.


Market reaction showed investor enthusiasm for the result, with the lira rallying to 1.2570 against the dollar in early Istanbul trade today, firming 1.4 per cent from its New York close on Friday.



The election pitted the AKP, with its Islamic roots, against a secular and nationalist opposition, which sees itself as defending the legacy of Kemal Ataturk, the founder of modern Turkey.

Two secular parties, the Republican People's Party and the Nationalist Acrtion Party, won 112 seats and 70 seats respectively. Some 24 seats went to Kurdish independents, the first Kurds in parliament since the early 1990s.


Mr Erdogan vowed last night to keep up Turkey's drive to join the European Union, saying he "hopes to crown Ataturk's dream of carrying Turkey to modern civilisation". Turnout was extremely high, with around three million new voters casting their ballots for the first time.


"I am here to ensure that the AKP doesn't win, to get rid of these imams [Muslim clerics]," said Mefkure Benli, who made a nine-hour bus trip from the Mediterranean resort of Antalya to a voting booth in Cankaya, a staunchly pro-secular neighbourhood of the capital, Ankara.


Mr Erdogan's secular rivals have cast the election as a battle between political Islam and the secular legacy of Ataturk. The election was called after the prime minister nominated his foreign minister, Abdullah Gul, to succeed President Ahmet Necdet Sezer, a secular former judge.


Mr Gul's wife wears the headscarf which is banned in all public buildings as a symbol of Muslim militancy. This sparked a political crisis which escalated when the army threatened to intervene. Mr Gul failed to garner enough support in parliament to win the presidency.


If the AKP wins enough seats it has pledged to rewrite the constitution to introduce a directly-elected president, a move that would revive Mr Gul's chances. But the real tussle is between an old guard of bureaucrats, industrialists and politicians - who have long monopolised power with the army's support - and a new rural business class, which has thrived under the AKP and is seeking a bigger say in politics and greater freedom to express its faith.


The AKP has combined free market economic policies with generous social benefits for the poor. "Secularism is fine but it doesn't fill my children's tummies," said Omer Sutcuoglu, a labourer. "They give us free coal and free schoolbooks."


"Erdogan cares about us because he is one of us," said Mustafa Alkoc, a retired health worker, alluding to the prime minister's origins. The son of an impoverished ferry boat captain, Mr Erdogan started life selling sesame buns in Istanbul.


The National Action Party improved its standing thanks to a xenophobic nationalism, freely expressed by its supporters yesterday. "They [AKP] have been selling our country to the infidels, our best coastline, factories, all gone," said Yasemin Oncel, echoing criticism of the AKP's foreign investment drive.