Back in 2011, we saw significant social and political unrest as a result of rising food prices, high youth unemployment and tight control on the freedom of expression in the Middle East. To what extent could these conditions trigger something similar in Turkey, as the country moves into financial difficulties? The recent developments in Turkey show some similarities with the situation preceding the Arab Spring in Egypt, but Turkey has the advantage of insight and the government is trying hard to soften the economic downturn as much as possible.
During 2010-12, food inflation rose by 38% in Egypt. Since 2015, Turkish food inflation has risen even more, increasing by 54%. Youth unemployment shows even more striking similarities. The current youth unemployment rate in Turkey is 20%, very close to the 25% that Egypt reported right before the eve of the rebellious uprising. According to Freedom House, a NGO that rates the freedoms of a country, Turkey’s status has declined from “partially free” to “not free”, mainly because of the recent change of the constitution to allow to starkly increased presidential powers, a mass replacement of mayors with appointees chosen from the government, and arbitrary prosecutions of those defined as “enemies of the state”. Incarceration rates have also increased dramatically, with the total incarcerated population increasing from 50,000 in 2000 to more than 200,000 in 2017.
Turkey faces very significant economic challenges in the coming two years. Weakening the lira is boosting export competitiveness, but it is also exacerbating the inflationary trend. In our view, the government faces a very difficult balancing challenge in the coming two years, while the global economy is entering a downturn. The jury is still out on whether the government will be able to navigate these difficulties safely, without encountering strong voter resistance.