May saw the presidential and parliamentary elections in Turkey, described by many as the most important elections of the year. Were they really that important? And what does their outcome say about the direction Turkey will take in the coming years?

Why were these elections considered so important?

Because of their potential impact on the future. As noted by Politico – one of the eulogists for the great significance of the Turkish elections – the outcome could have had a number of strategic consequences. It could affect Turkey’s membership in NATO and by extension the entire Alliance, its security and policy towards adversaries such as Russia and China, Turkish-EU relations and the future of the so-called migration agreement, which had been strongly contested by the Turkish opposition, as well as the Middle East region.

Turkey’s influence on international politics, however, was not the only reason for recognising the importance of the elections. Some experts hoped that the eventual fall of President Tayyip Erdoğan would bring about the end of other populist leaders who had mastered the management of reality through narrative to perfection. This would supposedly lead to the restoration of the faith of societies, especially Western ones, in democracy.

However, this will not be the case, as Tayyip Erdoğan won with 52% of the vote in the second round of the presidential election. In truth, this would not have happened if he had lost either. The projections about Erdoğan’s alleged links with other populist leaders were “magical”. For what else can you call the belief that the downfall of one politician would solve the range of problems modern democracies face? How is the defeat of the Turkish president supposed to cause other polarised societies to agree on the values that bind them together, on the rules of the modern state, or on what democracy and the rule of law actually mean?

Hence, if we necessarily want to hold on to the fact that the Turkish elections were the most important this year because of their impact on the future, let us recognise that this was because of the lessons they provided. The first would be that we should not expect the problems that will affect our future to solve themselves as if by magic. The second would emphasise that there is a lot of work to be done in societies that are experiencing problems with democracy – work that would focus on designing functioning democratic systems and a better future, rather than just closely following elections in any country in the hope that any changes there will inspire change ‘at home’.

What will Turkish foreign policy look like?

Turkey will continue to pursue a foreign and security policy that balances its alliance commitments with its desire to develop relations with other states such as Russia and China. It will continue to argue that it essentially has only one alliance – the “Turkey alliance”.

Turkey will therefore continue to push its own interests hard, only letting its guard down when such a policy proves to be excessively costly. It will continue to cause tensions within the North Atlantic Alliance – arguing that its Western allies do not sufficiently respect its security interests – just to make a firendly gesture once in a while that makes its NATO partners keep thinking ofTurkey as an ally. It will also continue its policy of balancing as far as Russian aggression against Ukraine is concerned. On the one hand, Turkey will still arm Ukraine and express support for its territorial integrity and international aspirations. On the other, it will do it in a way which does not antagonise Russia.

Changes could be expected on the Middle Eastern front. Turkey will continue normalisation of relations with the most important Gulf states, i.e. Saudi Arabia and the United Arab Emirates, which began before the elections, most likely trying to extend it to Egypt as well. It will prioritise attracting Saudi and Emirati investment, with the hope that this will stabilise Turkey’s economic situation. Both countries had already contributed significantly to it before the elections, facilitating Erdoğan’s victory.

As the future of the international order is concerned, Turkey’s positioning on the intensifying US-China rivalry will be interesting to observe. An experienced Turkish foreign policy investigator would hypothesise that Turkey will try to balance between the US and the People’s Republic of China until it is clear who will emerge victorious from this rivalry. However, this may be hampered by the multidimensional nature of this rivalry, including the fact that it involves the technological sector, deeply coupled with Turkey’s development. All choices in this area may be treated by both the US and China as strategic declarations. It will also be interesting to see what response Turkish foreign policy finds to the basic dilemma in relation to China, which has become particularly pronounced in recent years. The point is that, on the one hand, Turkey dreams of playing an intermediary role in China’s Belt and Road initiative that will open China’s doors to Europe, while on the other hand, it sharpens its teeth at the prospect of shortening supply chains, in which it often sees itself as playing the role of the ‘new China’.

What will become of the Turkish economy? 

Mehmet Şimşek, the new old Minister of Treasury and Finance announced a return to rationality in economic management. This would mean that Turkey is facing the abandonment of “Erdoganomics” – President Erdoğan’s way of managing the economy, one of the cornerstones of which is the unorthodox claim that high interest rates fuel inflation. If these announcements are to be believed, Turkey will face an increase in interest rates and an attempt to rebuild the central bank’s reserves, consistently burned through in recent years in successive attempts to defend the value of the Turkish currency Furthermore, the value of the Turkish lira should be expected to fall until it finds a point of equilibrium, and Turkey will try to fight inflation. In recent years – according to independent centres – it has even been able to reach nearly 200%.

“If the announcements are to be believed”, as it is still unclear how much leeway Şimşek and the newly appointed central bank governor – also trusted by Western investors – Hafize Gaye Erkan will have in implementing such policies. Admittedly, President Erdoğan has signalled that he will accept their prescriptions, but at the same time he has made it clear that his views on interest rates have not changed. This may mean that the Treasury and Finance Minister has limited time to prove that his plans for the economy will work.

In this case, time is an extremely relative concept. In 10 months at the most, Turkey faces another election, this time local, in which Erdoğan will want to take Istanbul and Ankara out of the hands of the opposition. The experience of the last decade teaches that the pre-election time is not conducive to making adjustments to heal the economy in a way that does not give an immediate bonus but will have effects in the long term. Some analysts argue that this is why Erdoğan has accepted Şimşek’s prescriptions – because he knows that the rise in the cost of living is felt most in these cities, and that temporarily he may need to do just that. Are they right?

Well, we will find out in the coming months. In the meantime, the attempted answers should be sought by observing three elements: a) interest rate policy, especially the pace and scale of interest rate hikes; b) the Turkish president’s comments towards interest rate hikes and the central bank’s reaction to them; c) the constancy of this policy in view of the upcoming local elections, especially towards the end of the second half of this year. If Şimşek and Erkan can withstand the pressure that Erdoğan will probably put on them, the Turkish economy will have a chance to get back on its feet. If, on the other hand, they succumb, Turkey will face a continuation of the president’s economic experiment.