At one level, the struggles of Turkey's ruling party AKP to form a government for the first time in 13 years is being seen as a vote against the polarising Islamisation, crackdown on personal freedoms and rampant corruption that marked the latter part of the regime of Recep Erdogan, prime minister till 2014 and president thereafter. At another, the verdict, which represents a massive fall from 327 seats and 49.83 per cent of the votes from the 2011 elections, could be considered an expression of discontent with Mr Erdogan's disastrous economic management. As a result, Turkey, the poster boy of emerging economies till quite recently, has become one of its more fragile.
AKP is still the largest party, having won 258 seats and 41 per cent of the votes. But this falls well short of a simple majority to form a government and the two-third majority required for a constitutional amendment to create an executive presidency with virtually unlimited powers, an outcome on which Mr Erdogan was banking and clearly preparing for with his unabashed conversion of a largely ceremonial role into hands-on partisanship. AKP, his party, now faces the unenviable task of allying with the centre-left CHP (25 per cent and 132 deputies) or the right-wing MHP (six per cent and 80 deputies). A glance at the electoral map, however, suggests that Mr Erdogan's Ottoman Pasha style of authoritarian governance, as exemplified by the Taksim Square protests in Istanbul in 2013, may have been deeply unpopular with the prosperous urban European and Aegean districts, but his tilt away from the country's aggressively secular founding legacy retained an appeal in the less developed central and eastern Turkey. The emergence of the rival pro-Kurdish HDP, which acquired an unprecedented 13.12 per cent of the vote and 80 deputies, has played its role in preventing the AKP from acquiring a majority in the 550-member Parliament. HDP's major gains, however, have come from areas formerly held by independents affiliated to another pro-Kurdish party.
Now, as the horse-trading begins, the real question is who can stop the rot in Turkey's economy? From 9.2 per cent in 2010, growth has shrunk to 2.9 per cent, the current account deficit is 5.7 per cent of GDP, domestic demand is almost non-existent, inflation is running at over eight per cent and the unemployment rate at 10 per cent. Like India, Turkey urgently needs to stoke investment and doing this demands structural reform of rigid labour markets and inefficient and corrupt law courts and banking system. With a savings rate at just 14 per cent of GDP, Turkey relies heavily on foreign capital. Yet, it occupies the lower ranks among comparable success stories like Poland and Chile in doing-business indicators. Sunday's verdict, thus, is a wake-up call for Mr Erdogan. In a statement, he has said he believed all parties would make a "healthy and realistic" evaluation of the results. Given the ultra-violent radicalism in Turkey's immediate neighbourhood, it is important he does too.
