(Bloomberg) -- Turkey’s biggest cities turned against Recep Tayyip Erdogan for the first time since 1994 in a stinging rejection at the ballot box that looked likely to end in the opposition’s takeover of the president’s hometown of Istanbul.
The capital, Ankara, and cities along the Mediterranean coast slipped from the grasp of Erdogan’s nationalist alliance in a municipal election upended by a raging recession and a recent run on the currency. Erdogan’s ruling bloc largely stood its ground across much of the country’s rural interior.
But after hours of competing victory declarations in commercial hub Istanbul, the election board said the opposition candidate had inched ahead in official counting. Erdogan has yet to concede, although his ally in Turkey’s largest city, former Prime Minister Binali Yildirim, acknowledged that he trails by 25,000 votes in the race.
“The alliance losing control over the big cities constitutes a clear warning signal that people are not satisfied with the current economic policy of the regime,” Nora Neuteboom, an economist at ABN Amro Bank NV in Amsterdam, said in an email. “The current government is likely to have limited appetite for reforms, and may instead focus more on quick fixes, such as flooding the economy with more cheap credit.”
The Turkish lira switched between losses and gains during the morning before gaining 0.3 percent against the dollar at 2:18 p.m. in Istanbul. Authorities had been preventing foreign banks from accessing lira ahead of the vote, making it virtually impossible for them to short the currency.
Erdogan’s first setback at the polls in years shows his ruling AK Party and its nationalist partner are paying the price after the economy dipped into its first recession since the global financial crisis. Although the result won’t affect Erdogan’s formal grip on the executive body, the erosion in support will add urgency to efforts to put the economy back on a growth track and regain the confidence of investors after years of populist quick fixes.
On Monday morning, the greatest uncertainty was over the fight for the mayor’s office in Istanbul. Opposition CHP candidate Ekrem Imamoglu took a narrow lead with 48.8 percent of the vote, according to the High Election Board. AKP’s Yildirim was trailing with 48.5 percent.
“The election board will decide the winner,” Yildirim said in Istanbul. “We know how to celebrate our opponents but the process is not finished yet.”
While Erdogan’s name wasn’t on the ballot, it was his political standing that hung in the balance after a quarter-century reign in Ankara and Istanbul by his Islamist-rooted party and its predecessors. In the run-up to the vote, the president held more than 100 campaign rallies, sometimes speaking as many as eight times a day. In an interview with the state broadcaster days before the election, he fielded questions as the candidates for mayoral races lined up bleacher-style as his background audience.
Erdogan’s AK Party-led alliance captured 51.6 percent of the national vote, with 99 percent of the ballots counted, state-run Anadolu Agency reported. The opposing camp led by the Republican People’s Party, or CHP, had 37.6 percent, while the pro-Kurdish HDP won 4.2 percent after sitting out the races beyond its stronghold in eastern Turkey.
The overall share of the votes for Erdogan’s alliance didn’t change dramatically since last year’s presidential vote as he maintained his hold on the interior of the country, where his nationalist-religious rhetoric appeals to a more conservative base. Erdogan got 52.6 percent of the vote in June.
The opposition says shrinking support for Erdogan in major cities would mark the beginning of the end of his 16-year rule. The Turkish leader was sworn in with almost untrammeled powers after last year’s general elections that followed a 2017 constitutional amendment to change Turkey’s political framework into an executive presidency from a parliamentary system.
The president’s critics say he’s running an increasingly authoritarian system, curtailing media freedoms and muzzling political opponents through court cases. Clashes between rivals at some polling stations left at least two people dead on Sunday.
Erdogan said the ruling party “emerged as the winner” but conceded the loss of some municipalities, where both sides early on claimed victory.
If early indications hold, at least nine cities may change hands. In addition to Ankara, Mediterranean tourism hub Antalya, coastal province Adana and port hub Mersin looked headed for opposition control, with candidates allied to the CHP defeating mayors allied with Erdogan.
“Erdogan’s AKP has lost significant votes in the country’s economic powerhouses,” Wolfango Piccoli, co-president of Teneo Intelligence in London, said in an emailed report on Monday. “Turkey’s economic downturn has killed Erdogan’s aura of invincibility.”
--With assistance from Ugur Yilmaz.
To contact the reporters on this story: Firat Kozok in Ankara at email@example.com;Onur Ant in Istanbul at firstname.lastname@example.org
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