After a Huge Setback in Local Elections, Which Way Forward Now for Türkiye’s Erdogan?

Two women sit near a campaign banner of Turkish President and leader of the Justice and Development Party, or AKP, Recep Tayyip in Istanbul, Türkiye, Monday, March 11, 2024. (AP)
Two women sit near a campaign banner of Turkish President and leader of the Justice and Development Party, or AKP, Recep Tayyip in Istanbul, Türkiye, Monday, March 11, 2024. (AP)
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After a Huge Setback in Local Elections, Which Way Forward Now for Türkiye’s Erdogan?

Two women sit near a campaign banner of Turkish President and leader of the Justice and Development Party, or AKP, Recep Tayyip in Istanbul, Türkiye, Monday, March 11, 2024. (AP)
Two women sit near a campaign banner of Turkish President and leader of the Justice and Development Party, or AKP, Recep Tayyip in Istanbul, Türkiye, Monday, March 11, 2024. (AP)

The huge gains made by the opposition in Türkiye’s local elections are raising the possibility that the long-serving President Recep Tayyip Erdogan and his ruling party could step back from some of the populist leader’s more polarizing policies ahead of the next round of voting in four years’ time.

There is no doubt that Sunday's local polls were a blow to both Erdogan and his Islamic-oriented Justice and Development Party, or AKP, which won last year’s presidential and parliamentary elections.

In the balloting, the main opposition center-left Republican People’s Party, or CHP, kept hold of Istanbul and the capital of Ankara by wide margins, but also added wins in conservative provinces — such as Adiyaman and Kilis in the south — to municipalities it gained in the 2019 balloting.

WHAT HAPPENS NOW? Some analysts said on Monday the outcome was a warning and that they expect Erdogan’s government will pursue a path of "normalization" that also includes soothing ties with NATO allies such as the United States and neighboring Greece — and adopting less antagonistic programs at home.

Erdogan, who has presided over Türkiye for more than two decades — as prime minister since 2003 and president since 2014 — acknowledged the electoral setback in a speech from the balcony of the presidential palace late Sunday, saying his party had suffered "a loss of altitude" across Türkiye.

The people delivered a "message" that AKP will "analyze" by engaging in "courageous" self-criticism, he said.

Seda Demiralp, a political science professor at Isik University in Istanbul, said she has already seen this pattern when Erdogan upset predictions of an opposition win in last May's elections after the devastating earthquake that killed more than 53,000 people in the country’s south.

Despite its demoralizing performance last year, the CHP won the popular vote in many major cities.

"This was a warning," Demiralp said. "I expect Erdogan to continue normalization ... or (the AKP) will keep losing further."

WHAT ABOUT RELIGIOUS AND FAMILY VALUES? Others who have been watching Türkiye closely don't see Erdogan making any radical U-turns or drastic changes in his conservative Islamist policies. But a toning-down may be on the cards.

Wolfango Piccoli, the co-president of New York-based consulting firm Teneo, suggests Erdogan may put a brake on his planned constitutional changes that would emphasize "family values" and safeguard, for example, the rights of women wanting to wear Islamic-style headscarves.

Still, "Erdogan will not move towards greater political accommodation, given his aversion to share power, and will not tone down his polarizing rhetoric due to this stinging defeat," Piccoli said.

Sunday’s elections saw the opposition CHP win 35 of Türkiye’s 81 provinces — including the country’s five most populous cities — while Erdogan’s AKP, took 24.

Ozgur Unluhisarcikli, director of the German Marshall Fund in Ankara, described the results as unprecedented for Erdogan.

Turnout was around 78%, according to the state-run Anadolu Agency, compared to 87% in last year's election. The results suggested it was mostly AKP supporters who failed to vote.

"We have never seen him lose like this," he said. "Now the CHP is leading the AKP in the polls for the first time ... This is a landslide for the CHP because they got more votes than the AKP for the first time."

"Türkiye is ready for change," said Unluhisarcikli.

WHERE IS THE ECONOMY GOING? The elections took place against the backdrop of an ongoing cost-of-living crisis, with voters facing annual inflation that rose to 67% in February. Meanwhile, Erdogan has allowed borrowing costs to rise to 50% in a bid to combat soaring prices.

Erdogan has long been a proponent of an unorthodox policy of cutting interest rates to fight inflation and had fired central bank governors who resisted his rate-slashing policies. That runs counter to traditional economic thinking, and many blame Erdogan’s unusual methods for Türkiye’s economic turmoil.

Commentators said that although the economic crisis left Erdogan’s popularity largely unaffected in last year’s national polls, AKP voters felt more inclined to express discontent when his name was not on the ballot paper.

"I think Turkish voters sent the clear message to Erdogan that enough is enough," said Berk Esen, associate professor of political science at Istanbul’s Sabanci University.

"If Erdogan does not get his act together and change his ruling party, this ... decline that we have experienced vis-a-vis AKP’s vote share is going to continue," Esen added.

HOW HAS THE POLITICAL LANDSCAPE CHANGED? Although Istanbul, where Erdogan was born and raised and where he began his political career, was seen as the main battleground in the election and where the opposition retained its hold on the city, in the southeast, the pro-Kurdish Equality and Democracy Party took 10 provinces — despite years of repression that have seen Kurdish mayors removed and replaced with government appointees, and thousands of political activists arrested.

The Erdogan-allied Nationalist Movement Party, or MHP, won eight scattered across the country. The New Welfare Party, or YRP, which largely competed with the AKP over the support of conservative voters, took two provinces.

It was the third biggest party in terms of nationwide votes, taking 6.2%. The IYI Party and the Great Unity Party won the remaining two provinces.

Those who had expected the opposition to perform poorly in Sunday’s election were stunned.

A change in the leadership in the CHP after last year's elections — from the 75-year-old Kemal Kilicdaroglu to Ozgur Ozel, 49 — appeared to have revitalized the party and paved the way for incumbent CHP mayors and other candidates to secure conclusive victories.

Analysts contrasted the strong candidates fielded by the opposition — such as Ekrem Imamoglu in Istanbul and Mansur Yavas in Ankara — to those for the AKP, who were largely overshadowed by Erdogan during the campaign.

Imamoglu won by a margin of more than 11 points while Yavas secured a gap of nearly 29 points on his AKP rival.

The results could position Imamoglu as a potential challenger for the presidency in 2028, despite an outstanding legal case that could see him banned from politics.

"Leadership is becoming more important than parties and ideologies," Demiralp said. "Especially in a country like Türkiye where institutions are weak, people connect to leaders rather than parties and other institutions."

WHAT IS THE WORD ON THE STREET? Sentiments were mixed on Monday on the streets of Istanbul, where many lauded the opposition's victory but others expressed concerns amid the economic crisis and their daily struggles.

"We woke up to a good day," said opposition supporter Ayse Poplata, adding the results "will be beneficial for our country."

Hicabi Pekdemir, 54, said he voted against Erdogan's AKP, citing a six-fold increase in his rent over the last two years.

"I live by myself and I have two kids," he said. "How do I make ends meet?"

Fatma Hanedar, 40, said she was "devastated and very upset" by the outcome and said the voters showed "such ungratefulness" for Erdogan's leadership through Türkiye’s recovery from the COVID-19 pandemic and rebuilding efforts after last year’s earthquake.

"Thank God our president is still at the helm," said another AKP supporter, Husamettin Ezer, 52.



Cash Shortage Squeezes Gaza Residents

Palestinian children queue for a hot meal at a charity kitchen in Gaza City on April 30, 2025. (Photo by Omar AL-QATTAA / AFP)
Palestinian children queue for a hot meal at a charity kitchen in Gaza City on April 30, 2025. (Photo by Omar AL-QATTAA / AFP)
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Cash Shortage Squeezes Gaza Residents

Palestinian children queue for a hot meal at a charity kitchen in Gaza City on April 30, 2025. (Photo by Omar AL-QATTAA / AFP)
Palestinian children queue for a hot meal at a charity kitchen in Gaza City on April 30, 2025. (Photo by Omar AL-QATTAA / AFP)

Even when food is available, many in Gaza cannot afford to buy it, as the enclave suffers from a severe cash shortage. Israel has blocked the entry of new currency into the territory since October 7, 2023, leaving residents at the mercy of money changers who have hiked exchange rates on remittances to exorbitant levels.

Palestinians in Gaza primarily rely on the Israeli shekel for daily transactions, which used to enter the strip through banks operating under the Palestinian Monetary Authority, supplied by the Bank of Israel.

Banking operations in Gaza have ground to a halt since the start of the war, and no fresh banknotes have entered the enclave, worsening an already dire humanitarian situation. Residents say they have been left at the mercy of traders who exploit the cash shortage to impose arbitrary rules on currency use.

'The Traders’ Game'

Dubbed “the traders’ game” by many in Gaza, the practice began with merchants refusing to accept worn-out banknotes and certain coins, such as the 10-shekel piece (worth about $3), which have all but vanished from local markets. Some vendors now reject older versions of bills - like the brown-hued 100-shekel note (around $28) - insisting instead on the newer yellow ones. The same rules apply to various denominations.

Speaking to Asharq Al-Awsat, Hani Jahjouh, a resident of al-Shati Camp west of Gaza City, said vendors selling vegetables and essential goods - when available - often refuse worn banknotes or specific coins, claiming they are counterfeit or easily faked.

“This just adds to the burden of people already crushed by impossible living conditions,” said Jahjouh, 59. “We don’t have solutions. We don’t even know where to get the money they’re asking for.”

Only a very small number of traders accept digital payments, and even then, residents say, they impose tough conditions - such as inflated prices or demands for partial payment in cash.

Displaced Gazan Duaa Ismail, originally from Beit Hanoun in the north of the enclave, says even when goods are available, she cannot afford them due to a lack of cash.

“We’re suffering badly from a shortage of money, and that makes it even harder to get basic items like flour and sugar - when they’re even in stock,” she told Asharq Al-Awsat from a shelter in Gaza City’s Sheikh Radwan neighborhood.

Ismail said that during a brief ceasefire, some traders had accepted digital payments through mobile apps. “But once the war resumed, things worsened, and they stopped taking them altogether,” she said.

Salaries They Can’t Spend

The crisis has also hit public-sector employees, private workers, and international aid staff, many of whom receive salaries through bank transfers or mobile wallets but have no way of accessing their funds with banks shuttered. They are forced to rely on currency dealers or traders with access to physical cash.

Amjad Hasballah, an employee with the Palestinian Authority, said he has been cashing his monthly salary through mobile banking apps for over a year and a half, paying a steep commission to money traders in return.

“When I received my last salary in early April, the commission had reached 30%,” he said.

Speaking to Asharq Al-Awsat, Hasballah explained that at the start of the war, commissions hovered around 5%, but they spiked during Ramadan, peaking at 35% around Eid al-Fitr, before dipping slightly to 30%.

“My salary is just 2,800 shekels. When I pay a 30% fee, there’s barely anything left,” he said bitterly. “At this point, the traders might as well take the whole salary and just give us pocket money.”

Caught in a Trap

Jamal Al-Mashal, a father of six who lost two children in an Israeli airstrike, said he lives off 1,000 shekels (about $280) in monthly international aid. But even that amount is slashed by up to 30% when he exchanges it through local traders.

“People in Gaza have become a cash trap for currency dealers and big traders,” he said. “They’re exploiting our desperation, and it’s like a harvest season for them - raking in profits while we suffer.”

The poorest and most vulnerable are hit hardest. Many international agencies rely on electronic payment platforms to distribute aid to these groups, who often have no access to physical currency.

No Oversight, No Restraint

The Hamas-run government has made attempts to cap commission rates at 5%, but those efforts have largely failed. Officials blame ongoing Israeli targeting of personnel involved in regulating the process.

Money changers defend the high fees, arguing that the lack of currency entering Gaza leaves them with limited options.

“We raise commission rates because there’s simply no new cash coming in,” one trader told Asharq Al-Awsat. “Once money is distributed to the public, we have no way of getting it back. What goes out doesn’t return.”

He added that while ministries and law enforcement have tried to impose limits, traders view the rules as unfair. “There have been attempts to regulate us, but we haven’t complied - they’re asking too much from us under impossible conditions,” he said.

Some municipal leaders and community elders in Gaza have recently appealed to the Palestinian Monetary Authority in Ramallah to intervene in what they describe as unchecked profiteering by traders controlling access to scarce cash.

They have called for greater oversight, including monitoring and freezing the traders’ bank accounts.

The authority has repeatedly warned against exploitation of civilians and threatened to take action. But in practice, traders continue to charge hefty commissions on money transfers with little deterrence.

The Authority has urged residents to use its Instant Payment System available through mobile banking apps, which it says offers a practical alternative to cash, promotes digital payments, and enables real-time transactions.

Cash Squeeze Tightens Further

Despite the hardship, Israel is considering new measures that could further tighten the financial stranglehold on Gaza. One proposal involves withdrawing the 200-shekel banknote (worth about $55) from circulation, on the grounds that Hamas allegedly uses it to pay salaries to its fighters.

The suggestion was reportedly made by Israeli Foreign Minister Gideon Sa’ar to Bank of Israel Governor Amir Yaron, who rejected the move. Other proposals include voiding the serial numbers of banknotes believed to be inside Gaza, effectively rendering them worthless, a step that could deliver a significant financial blow to Hamas.

According to a report published Tuesday by the Israeli daily Maariv, the proposal has backing from several ministers and economists both within and outside the central bank.

The report estimated that around 10 billion shekels in high-denomination bills - 100 and 200 shekels - remain in circulation within Gaza. These notes entered the enclave over the years through official banking channels supplied by the Bank of Israel.

Economists told Maariv that Gaza residents receive an estimated 150 to 200 million shekels each month through digital transfers from aid organizations and the Palestinian Authority. That money is then converted into cash within markets dominated by Hamas and supported by a network of money changers.

Israeli security sources estimate that Hamas has accumulated up to five billion shekels since the war began and has spent nearly one billion shekels on salaries for fighters and new recruits. The sources claim Hamas has profited significantly by reselling aid and fuel at inflated prices during the conflict.