Erdogan Faces Rare Rebellion Within His Party as Economy Weakens

Firat Kozok and Kerim Karakaya

(Bloomberg) -- Turkish President Recep Tayyip Erdogan was confronted with a rare sign of rebellion within the governing party as former allies attacked his leadership following a sharp deterioration in the economy and stinging losses in local elections last month.

Ahmet Davutoglu, who was once Erdogan’s handpicked successor at the helm of the ruling AK Party, said it “must face the reality of decreasing public support” due to “arrogant” policies. The former prime minister’s written statement on Monday avoided any personal criticism of Erdogan, though ripped into policies under the president from the management of economy to curbing of basic liberties and the pressure on free speech.

“We can’t manage the economic crisis that’s in play by denying its existence,” said Davutoglu, who is still an AKP member, though no longer in parliament. “A governance crisis lies at the root of the economic crisis that we are living.”

The broadside underscores the turmoil in Turkey as Erdogan tries to keep control of the political narrative and smother any sign of opposition.

In power for much of the past two decades, the Turkish president and his party are in uncharted territory after unprecedented losses in large cities. The economy is on a knife edge because of a plunge in the currency and the looming threat of more U.S. sanctions.

Rival Warnings

Davutoglu warned against drifting away from free market economics and said the AKP’s electoral alliance with ultra-nationalists is making the governing party a hostage to a smaller political group. Turkey’s pro-government media gave no air time to Davutoglu’s call for reform.

In criticizing Erdogan, Davutoglu faces a leader who has triumphed over powerful opponents and survived a coup attempt in 2016. Erdogan, 65, has repeatedly warned members of his party not to commit “treason” and he has shown no sign of tolerance to any sign of dissent within the party in the past.

Nihat Ali Ozcan, a strategist at the Ankara-based Economic Policy Research Foundation of Turkey, said Davutoglu was doomed to fail. “Davutoglu certainly does not have the capacity or influence either over the party or AK Party supporters to challenge Erdogan’s rule,” he said by phone. “Erdogan still calls the shots over the party and is likely to do so.”

Indeed, it’s not clear what support Davutoglu has or where the the public criticism might lead. The rebellion could provide an opening for members of a party that’s feeling increasingly restless over the economy and the alliance with nationalist party MHP.

Overtures

Davutoglu didn’t try to poach any AKP lawmakers and instead prioritizes an overhaul of the party from the ground up, according to a person familiar with his thinking. There have been overtures to members of Erdogan’s former top team of policy makers such as ex-deputy premier Ali Babacan, though he hasn’t endorsed any public criticism.

If Erdogan chooses demonize critics instead of addressing them, the internal opposition could find itself forced to set up a an alternative political party, the person said.

Whatever happens, Erdogan remains faced with trying to recover from the loss of key cities in March 31 municipal elections. The defeat in Istanbul, where Erdogan made his political career, is disputed by the president’s top aides.

Turkey’s highest electoral body on Monday is expected to start evaluating whether to nullify the Istanbul municipal election results and hold the new vote demanded by AKP.

Ekrem Imamoglu of the opposition CHP assumed the office of Istanbul mayor on April 17 after being awarded the victory, sending the lira surging. The next day, though, the currency tumbled as much as 1.9 percent against the dollar on reports that the central bank was using short-term borrowing to bolster its foreign reserves.

--With assistance from Taylan Bilgic and Selcan Hacaoglu.

To contact the reporters on this story: Firat Kozok in Ankara at fkozok@bloomberg.net;Kerim Karakaya in Istanbul at kkarakaya2@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, ;Onur Ant at oant@bloomberg.net, ;Riad Hamade at rhamade@bloomberg.net, Rodney Jefferson

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