Foreign policy is a hubristic disaster and the economy is on the slide, but that won’t stop the ruling AK party founded by Recep Tayyip Erdogan from winning

CRITICS of Turkey say its democracy is under threat, but it doesn’t look that way at election time. Villagers are on the streets in their hundreds, city-dwellers in their hundreds of thousands, to listen to politicians’ pitches. The country is covered in bunting. In recent elections turnout has been over 80%—higher than in most other European countries—and, although allegations of ballot-rigging are frequent, voting is mostly fair.

The likely victor in the general election on June 7th is the ruling Justice and Development (AK) party, founded by the charismatic Recep Tayyip Erdogan, long-serving prime minister and now president. Polls suggest AK will get over 40% of the vote.

In electoral terms, AK has been a wild success. Since the party was set up in 2001, it has won seven consecutive general, local and presidential elections, plus two referendums. In the 2011 general election its vote share was close to 50%. Mr Erdogan won the 2014 presidential election in the first round.

But AK’s impact on the country has been more ambiguous. Turkey has had a strong decade economically, but it now faces stagnation and high unemployment. Abroad, Mr Erdogan’s foreign policy has been a comprehensive failure. The government’s peace process with the Kurds is on a knife-edge. And Mr Erdogan is bent on changing the constitution into a strong presidential system. Because this election will determine whether he can, it matters a great deal to Turkey’s future.

Rating the economy

AK’s most powerful pitch is that it came to power after a string of squabbling coalitions drove Turkey into near-bankruptcy and an IMF bail-out in 2001. Since then, GDP growth has been spectacular, inflation has been tamed, the banks have been strengthened and foreign investment has soared. Turkey, which this year chairs the G20 group of big countries, claims to be on course to become one of the world’s ten biggest economies within ten years. It has an investment-grade rating and, since 2005, has been negotiating to join the EU.

But growth has slowed sharply, to a forecast 3% or even less this year. That means Turkey has no chance of denting unemployment, which averages 11%. Dani Rodrik, an economist at Princeton University, notes that the sources of Turkey’s growth—short-term borrowing and a rising current-account deficit—are also worrying. At almost 6% of GDP, the current-account deficit in 2014 was the largest in the OECD club of mostly rich countries. The lira has sunk by almost 40% against the dollar in the past two years. Turkey’s dependence on property and construction (it is Europe’s biggest cement producer) is another weakness. Huge public-sector projects include a third bridge and a tunnel across the Bosporus, a new Istanbul airport, a “crazy canal” linking the Black Sea to the Sea of Marmara, a 1,100-room presidential palace for Mr Erdogan in Ankara and a vast mountaintop mosque in Istanbul. The tower blocks sprouting up around Ankara and Istanbul could presage a property bust. Mr Erdogan has not improved investors’ confidence by repeatedly attacking the central bank for keeping interest rates too high. The president seems to believe, perversely, that high interest rates cause high inflation. His assaults on what he calls the “interest-rate lobby” have undermined the central bank’s prized independence. It is no surprise that the credit-rating agencies are re-examining Turkey’s rating. The president seems uninterested in the structural reforms that an economy caught in a “middle-income trap” needs. Turkey is strong in basic manufacturing such as white goods, furniture and cars, but weak in high tech. Labour-force participation is low, especially among women. Turkey scores lowest in the OECD for rigid product-market regulation and it comes 55th in the World Bank’s rankings for ease of doing business.

The Turks are coming

With the economy weakening, Mr Erdogan’s assertive foreign policy was partly designed to shore up support at home. As Sinan Ulgen of EDAM, a think-tank in Istanbul, argues, “Erdogan has hijacked foreign policy for domestic purposes.” The president’s rhetoric has taken on an increasingly anti-Western tone. He has pandered to sectarian Sunni feeling and to Turks’ prickly nationalism, caricaturing opponents as traitors working for Western interests and talking of foreign plots. Israel, America and the EU have all been implicated in such plots. Turkey has switched from being an ally of Israel to one of its harshest critics.

Mr Erdogan saw the turmoil after the Arab spring as an opportunity for Turkey to play a bigger role in the former Ottoman empire. In Egypt he supported the ousting of Hosni Mubarak and his replacement by the Muslim Brotherhood’s Muhammad Morsi, and in Syria he backed the Sunni rebels against Bashar Assad, who belongs to the Alawite sect. Many Western leaders saw AK as a moderate model for a new generation of Islamist leaders.

But Mr Erdogan was reluctant to support the Kurds against Mr Assad because they want to carve out a separate state in the area where Turkey, Syria and Iraq meet. His interests were more aligned with those of another bunch of rebels, who are enemies not only of Mr Assad but also of the Kurds, and, like the Turks, are Sunnis: Islamic State (IS). Last summer, when Kurdish forces were besieged by IS in Kobane, Turkey failed to help them. The Turks flatly deny assisting IS, but rumours of covert aid persist. Until recently they did little to stop jihadist fighters crossing into Syria. And they still refuse to let the Americans use Incirlik air base, in the south-east, to bomb IS targets in Iraq and Syria. Three years ago, Mr Erdogan’s foreign policy won plaudits from the West and the Middle East. Now its different strands have failed. Reluctance to support Syria’s Kurds has won Turkey opprobrium in the West. When Mr Morsi was toppled in a coup and Mr Assad remained defiantly in charge, Turkey ceased to look like a model for the Arab world. It is now in the awkward position of having no ambassadors in Egypt, Israel, Libya and Syria, as well as having withdrawn its ambassadors to Austria and the Vatican in a row over the pope’s reference to the 1915 Armenian genocide. A foreign policy that was supposed to boost Mr Erdogan’s popularity seems now to be doing the opposite. Some Turks fret that their country is becoming more isolated. The direct cost is high: Turkey has taken in 1.7m Syrian refugees. The continued progress of Islamic State just across the border in Iraq frightens many Turks. Problems with the Kurds abroad makes it harder to negotiate with them at home.

Seats for the Kurds?

Mr Erdogan deserves praise for trying to reach peace with Turkey’s 15m Kurds. By negotiating with Abdullah Ocalan, the jailed leader of the PKK, Turkey’s Kurdish guerrillas, he has done more to deal with the Kurds’ grievances than any previous Turkish leader. The PKK has observed a ceasefire for two years. But an attempted amnesty for PKK fighters a few years ago generated a fierce reaction among Turkish nationalists when the guerrillas returned in triumph and in uniform. Further talks with Mr Ocalan could prove fruitless unless the government is willing to offer genuine devolution of power.

Whether it does may depend in part on whether the pro-Kurdish party wins seats in the national assembly. According to the constitution, a party running nationally must win at least 10% of the vote before it gets any seats. The pro-Kurdish HDP is hovering close to that figure in the polls.

If the HDP wins seats, it will be a big step towards bringing the Kurds into the mainstream. If it does not, AK will pick up most of their seats, the Kurds will feel unrepresented and there will be a risk that the peace process breaks down. And Mr Erdogan will have a greater chance of winning his ultimate prize: a new system of government with a strong presidency. To create that, he needs a new constitution. If AK gets a three-fifths majority (330 seats), it can pass a new constitution that has to be put to a referendum; with a two-thirds majority (367 seats), it can have a new constitution without a referendum.

A conversation with Turkey's prime minister Constitutional change is not necessarily a bad idea. As Ahmet Davutoglu, the prime minister, points out, the current constitution was written in 1982 by the generals who ruled Turkey and wanted to limit the powers of civilian governments, and there have been many clashes between presidents and prime ministers. When in 2007, the army tried to block the presidency of Abdullah Gul, a co-founder of AK, the government changed the constitution to allow the direct election of the president. Yet seen against the background of his recent behaviour, Mr Erdogan’s plans for a strong presidency are troubling. He has dismantled checks on his power. His approach is majoritarian and divisive: so long as his party wins elections, it can trample any critics. Critical newspaper groups have been subjected to capricious tax fines. Columnists have been fired. Turkey had more journalists in jail than any other country until the middle of last year, when a clutch of 40 were let out. Reporters Without Borders, a Paris-based group, ranks it 149th of 180 countries for press freedom, above Russia but below Venezuela. The authorities have often tried to close off access to critical websites and social media. In the second half of 2014, Turkey filed 477 requests to Twitter to remove content, five times more than any other country. And since Mr Erdogan became president, 105 people have been indicted for insulting the head of state. Attacks on the media and a harsh crackdown on the protests in Gezi Park in Istanbul two years ago deepened a rift with the supporters of Fethullah Gulen, a Muslim preacher. The Gulenists, formerly Mr Erdogan’s allies against the army and the secular establishment, have now become enemies. The battle with them intensified after tape recordings of AK officials taking bribes were leaked. Mr Erdogan promptly reassigned hundreds of policemen, prosecutors and judges who were looking into cases of alleged graft.

The smell of corruption is growing. The government passed laws to give it greater control over both the judiciary and the police. Efforts to pursue corruption probes against senior AK figures have in effect been neutered. Transparency International, a watchdog, places Turkey 64th in its corruption-perceptions index, below such places as Cuba and Saudi Arabia.

Turkey is at a fork in the road. In one direction is a stronger autocratic president better able to crush critics at home and challenge Turkey’s Western allies abroad. In the other is a more conciliatory parliamentary government that is readier to reform the economy and engage opponents at home. As some Turks as well as Kurds have realised, a good way to promote the second is to have the HDP in parliament.