by Isobel Finkel and Selcan Hacaoglu
Following a narrow victory in an April 16 referendum on expanding his powers, Turkish President Recep Tayyip Erdogan greeted supporters with a fiery speech aimed at critics abroad who questioned the validity of the results. “We don’t care about the opinions of any Hans, George, or Helga,” Erdogan told an ebullient crowd at Bestepe, his sumptuous presidential palace in Ankara four times the size of Versailles. “All debates about the referendum are now over.”
In the campaign, Erdogan had said approval of the plan to amend 18 articles of the constitution would give him the clout needed to put the ailing economy back on track and tackle an array of diplomatic challenges. Yet the result is likely to aggravate those concerns by scaring away foreign investors and complicating relations with Europe, says Omer Taspinar, a senior fellow at the Brookings Institution in Washington. “He has to realize that this path will lead to economic ruin sooner or later,” Taspinar says. “The new constitution won’t really change much in terms of Erdogan’s ability to tackle these problems.”
The referendum–the results of which have been vigorously contested by the opposition–yielded an outcome as divided as Turkish society, which has become acutely polarized during Erdogan’s 14 years of leadership. After a broad clampdown in the wake of a failed coup last July that Erdogan blames on followers of U.S.-based cleric Fethullah Gulen, he insisted the country’s security depended on having a strong president able to act decisively. Parliament on April 18 voted to extend a state of emergency that the government has used to fire or jail tens of thousands of soldiers, police officers, and judges and to shutter more than 150 media outlets. Prime Minister Binali Yildirim has hinted that more is to come, saying the government must keep any rogue elements of the once-powerful military on a short leash. “Expect the purge to accelerate,” says Steven Cook, senior fellow for Middle East and Africa Studies at the Council on Foreign Relations in Washington. “Erdogan will not take any chances.”
In his first years in power, as prime minister, Erdogan offered respite from the revolving-door coalitions that had characterized the ‘90s, and he used that mandate to energize Turkey’s economy. But his later administrations have been rattled by charges of corruption, slowing growth, and deepening involvement in Syria. A deadly Kurdish insurgency reignited in 2015 after a three-year ceasefire, and Islamic State terrorists began attacking Turkish cities with bombs.
As he cracked down on dissent, Erdogan grew more authoritarian. Tourists fled the political turmoil, investors balked at meddling in central bank policy, and relations with the European Union–Turkey’s largest trading partner–sank to new lows. “Turkey has a dark future,” says David Phillips, a director at Columbia University’s Institute for the Study of Human Rights in New York. As recently as 2014, Erdogan consistently emphasized the importance of closer relations with the EU, but his referendum campaign was marked by tough anti-Europe rhetoric. “Erdogan will take this election victory as a mandate to reject European values,” Phillips says. “Turkey will be increasingly inward-looking.”
After the vote, the European Parliament said it might suspend a half-century of talks to bring Turkey into the EU if the proposed amendments to the constitution aren’t modified. And European officials have warned Erdogan against reinstating the death penalty—it was abolished in 2004 to bolster Turkey’s application for EU membership–an idea the president has floated repeatedly to shore up support among conservatives. But Erdogan holds a strong hand in any dealings with Europe: Turkey last year agreed to limit the number of refugees from Syria and other conflict zones heading to Europe, but it keeps threatening to loosen its controls. “Erdogan will play on the fact that the West still needs Turkey, more than vice-versa, particularly over Syria,” says Tim Ash, an emerging-market strategist at BlueBay Asset Management in London.
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The new U.S. administration, by contrast, has been less critical of Turkey’s human rights record. Donald Trump called Erdogan to congratulate him on the referendum victory–one of just a handful of global leaders to do so. Though the two countries have been at odds over American backing for Kurdish rebels in Syria, Turkish support is crucial for the U.S.-led campaign against Islamic State. “The US-Turkish relationship will continue to be about what it has always been about: strategic and geopolitical necessity,” says Kristin Fabbe, a Harvard Business School professor who focuses on Turkey.
Erdogan and other government officials said a yes vote would rekindle investor interest in Turkey as the lira has been the worst performer this year among major currencies. Though it surged shortly after the referendum results came in, buoyed by the elimination of one source of uncertainty, the lira soon fell back to pre-election levels. The market reaction is “not a ringing endorsement for a new constitution, and it highlights many people’s concerns about concentrating power in the hands of one person,” says Nigel Rendell, a senior analyst at Medley Global Advisors in London. “Little has changed.”