Turkey's Economy Is Ailing Again, and So Is Its Democracy

Erdogan rescued Turkey’s economy. Now investors fear he’s running the country into the ground

- Benjamin Harvey

The world is finally catching on to what the skeptics in Turkey were saying all along.

For the better part of 16 years, Turkish leader Recep Tayyip Erdogan, a self-styled economic reformer and the world’s great hope for Muslim democracy, had a compelling story—and for most of that time, everyone bought it. Everyone, that is, except Turkey’s old guard—the secular establishment, the billionaires, generals, and educated elites who stood to lose their monopoly on power, wealth, and influence.

The old establishment hadn’t done well by the rest of the populace or the economy. When Erdogan’s party swept to victory in 2002 on pledges to open markets and liberalize institutions, Turkey’s economy was on life support, requiring an international rescue package that topped $20 billion. The lira had collapsed, along with a handful of banks and government efforts to contain raging inflation.

Voters demanded change. They got it. For most of Erdogan’s years in power, Turkey appeared to be in a golden age. Istanbul, a global crossroads for centuries, exuded optimism. Restaurants and clubs popped up like mushrooms. Entire new districts for the arts and nightlife seemed to sprout overnight. Young Turks educated abroad returned in droves to start businesses and make their fortunes. Turkey hosted international summits and, with Spain, became a co-sponsor of a United Nations-backed effort to forge international, intercultural, and interreligious dialogue and cooperation. It was captivating. So much so that a visitor could be forgiven for believing that under Erdogan, the city finally had a chance at living up to Napoleon Bonaparte’s comment: “If the world was only one country, Istanbul would be its capital.”