Authoritarianism is Turkey’s biggest economic risk

 

Twelve years ago, I published a commentary that asked: “Why is Turkey Rebelling?” Demonstrators had flooded the streets of Istanbul to protect Gezi Park from being turned into a shopping mall.

Today, they are back, not for trees or green spaces, but in response to the culmination of years of lawlessness and creeping authoritarianism. Then, as now, the protests reflect a deep, mounting frustration with the steady dismantling of Turkey’s democratic institutions.

Last week, Istanbul mayor Ekrem İmamoğlu – who has twice defeated the ruling Justice and Development Party (AKP) in local elections – was arrested on the day he was expected to announce his candidacy in the 2028 presidential race.

The charges against him, including bribery and abuse of office, have been denounced as politically motivated. İmamoğlu is widely seen as President Recep Tayyip Erdoğan’s most credible challenger, and opposition leaders argue that his sudden arrest is no coincidence.

The public responded with outrage. Protests erupted across the country, from Istanbul and Ankara to İzmir, Konya, Diyarbakır, and beyond. For many of the millions who have joined the demonstrations, this is no longer about one man or one court decision.

It is about a political system that has lost its legitimacy. The question now echoing across Turkey is whether the country’s authoritarian slide has finally reached the point of no return.

For those who remember the 2013 Gezi protests, the imagery is familiar: tear gas in the streets, chants in city squares, police surrounding courthouses and universities. This time, however, the economy is central to the unrest.

In 2013, Turkey was still considered an emerging economic success story. Growth was strong, inflation hovered around 6%, and the lira was stable. The AKP government, still riding the credibility of early-2000s International Monetary Fund-supported reforms, commanded respect from markets and foreign investors.

But that rosy picture has unraveled. In 2025, growth is lower, and inflation remains at double-digit levels, despite the central bank’s recent return to orthodox monetary policy.

While some of the foreign capital that was lost through many years of economic mismanagement began to trickle back last year, İmamoğlu’s arrest has shattered investor confidence again. The lira has plunged, and Turkey’s risk premium has spiked.

Like in 2013, the deeper message of the ongoing protests is clear: economic performance is inseparable from institutional health. You can have competent technocrats at the central bank and finance ministry, but if the judiciary is politicised, the media muzzled, and academic institutions under siege, those “adults in the room” are not enough. Foreign and domestic investors alike price the political risk as economic risk, driving up the cost of capital.

Competitive elections and competent technocrats alone do not sustain a democracy. Institutions do. And when the rule of law is eroded, dissent is silenced, and universities and media outlets lose their independence, the economy, too, will falter.

İmamoğlu’s imprisonment may be the last straw for Turks who understand this link between institutions and economic stability. More than just a popular mayor, İmamoğlu is a national symbol of political pluralism and democratic possibility.

His sweeping victories in Istanbul reflected a broad-based desire for change, and his removal now signals that Erdoğan’s regime is unwilling to let that change happen through democratic means.

What makes this moment even more significant than Gezi is the scale and diversity of the resistance. While the 2013 protests were largely driven by secular, urban youth, today’s span social, generational, and ideological divides.

Students, unionised workers, small-business owners, conservative youth, liberals, the elderly, and Kurds are marching together under the unifying chant: “Hak, hukuk, adalet” (“Rights, law, justice”). Their cause goes far beyond İmamoğlu. They are protesting the deliberate misuse of state institutions to criminalise dissent and entrench economic inequality.

When justice is politicised, dissenters become traitors, and those aligned with the regime thrive while independent voices are punished and marginalised. Structural issues – like femicide, educational disparities, youth disenfranchisement – remain unaddressed, because public resources have been diverted towards rewriting history and rewarding loyalists.

This should concern not only Turkish citizens, but also the country’s allies – especially in the US. In fact, the parallels with President Donald Trump’s administration are hard to ignore. Unlike many European democracies, whose leaders swiftly condemned İmamoğlu’s imprisonment, the US response to the erosion of democratic institutions in a Nato member state of 85 million people has been muted.

Worse, patterns familiar to those who have lived in Turkey during the last decade are emerging within the US. The Trump administration has repeatedly targeted knowledge institutions, especially universities.

Because college-educated voters often lean towards the opposition (Democrats), academia has become a scapegoat. Attacks on academic freedom, rejection of science, and promotion of conspiracy theories are all part of the institutional rot that Turkey has witnessed since 2013.

Whether it’s denying the well-documented link between interest rates and inflation (as Erdoğan has done) or dismissing climate science, rewriting the history of Jan 6, and spreading misinformation about Covid-19 (as Trump has done), assaults on truth are essential to authoritarian rule. Universities are not just centres of learning; they are guardians of public reason, without which democracy breaks down.

Turkey is not yet a failed democracy, but it is dangerously close to becoming one. Whether it returns to the path of institutional reform or continues its descent into authoritarianism will depend on the choices made in the days ahead.

The international community – particularly the US – should pay close attention, not only because of Turkey’s geopolitical importance, but also because the struggle unfolding in its streets between students and security forces mirrors a global battle between democracy and its enemies.

Democracies rarely die suddenly. Their demise is the culmination of a process featuring political prosecutions, the imprisonment or disqualification of opponents, criminalisation of protest, seizure of control over universities, and the silence of those who know better. To paraphrase Dylan Thomas, Turks are showing that they will not go gently into that authoritarian night. - FMT

Şebnem Kalemli-Özcan, professor of economics at Brown University and director of the Global Linkages Lab, is a former senior policy adviser at the International Monetary Fund and former lead economist for the Middle East and North Africa at the World Bank.

The views expressed are those of the writer and do not necessarily reflect those of FMT.