ANALYSIS OF TURKEY GENERAL ELECTIONS

INTRODUCTION

Turkeys 24th general elections resulted in the election of 550 members to the Turkish Grand National Assembly on June 7, 2015. According to official statistics, Turkey has 53,765,231 eligible voters domestically and 2,867,658 eligible voters abroad, and this years participation rate was 84 percent. According to the unofficial results of the election, the incumbent ruling AK Party lost its Parliamentary majority and missed the mark to independently form a government, the first time since 2002. With 96.91 percent of the votes counted, the AKP received 40.70 percent of the vote, while the CHP, MHP, and HDP received 25.16 percent, 16.50 percent 12.99 percent of the vote, respectively. The AKP obtained 254 MPs in the Parliament, falling short of the 276 that it needed to form a government. The main opposition, the secularist and social democrat CHP, attained 131 MPs, while the traditional, nationalist MHP and the pro-Kurdish HDP each saw the election of 82 MPs. These results depict voters insistence on maintaining the Parliamentary system and supporting democracy in Turkey.

Chart I: Unofficial Election Results

Source: Hurriyet Daily News

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THE 10 PERCENT THRESHOLD AND ITS IMPACT

According to Turkeys election system, a party needs to obtain at least 10 percent of the popular vote in order to enter the Turkish Grand National Assembly. This policy was introduced in 1980, after a military coup, and it has not been amended since then. This threshold is considered a controversial requirement, given that it is seen by some commentators as undemocratic, due to the fact that it may strengthen the power of the ruling party and prevent representation of smaller political and ethnic minorities in the National Assembly. It is therefore difficult for new political movements to emerge.

Because of the threshold, many political groups, such as the Kurds, have historically participated in the elections as independent candidates, for whom the threshold does not have an impact. Kurdish politicians, who have obtained seats in the National Assembly this way for the past few decades, have now formed a new and a more inclusive political party called the HDP (Peoples Democratic Party) and for the first time entered a general election as a party. By submitting a candidate list composed of Turks, Kurds, and other minorities, the HDP managed to attract the interest of many new voters, including Turks in Turkeys western provinces.

Chart II: Parliament Composition According to the Unofficial Election Results

Source: Hurriyet Daily News

Kurdish Roulette Paid Off

According to the unofficial results, HDPs bold and risky move has paid off as it obtained 12.99 percent of the popular vote. If the HDP entered the elections not as a party, but via the previously adopted strategy of campaigning as independent candidates, as it did during the General Elections of 2011, the HDP would have been essentially guaranteed 25-30 MPs. The HDP managed to add approximately two million votes in this election. The great risk in undertaking an election as a party, rather than as independent candidates, is the HDP would not have had any presence in the National Assembly if it failed to pass the 10 percent threshold. Nevertheless, the Kurdish gamble has paid off, and HDP has managed to obtain a record of 82 seats in the National Assembly. This will have significant implications in the government and in the overall future political system of the country.

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WHATS NEXT?

The HDPs success in passing the 10 percent threshold marks the beginning of a new political era in Turkey. First, the representation of a pro-Kurdish party in the National Assembly will have implications for the peace process that was initiated by the AKP. A diplomatic presence of the Kurds in the Turkish National Assembly can ease tensions surrounding ongoing peace talks, but it is not entirely clear whether these implications will be positive or negative for Turkey.

Most significantly, the admission of the HDP into the National Assembly will end the 13-year period of single-party rule in Turkey. The ruling AKP lost a sufficient number of seats in the National Assembly to form a government with only 254 MPs, as 276 MPs are needed to form a government. Moreover, it is nearly impossible for the AKP to introduce constitutional amendments to a popular vote, since this requires 330 MPs. President Erdoans goal of establishing a presidential system now appears out of reach. This result is likely to trigger a leadership crisis within the AKP. There is a serious possibility that Turkey will witness a power struggle between Erdoans staunch supporters and other AKP heavyweights within the party. Erdoan does not hold legal power over the partys management, so he is likely to place blame on Prime Minister and AKP Chairman Ahmet Davutolu while high-level AKP officials who have been more vocal against particular remarks of Erdoan are likely to become more vocal. It should be noted that the AKP has been very successful in avoiding this kind of a power struggle throughout its history, but this time, it appears inevitable.

Coalition Alternatives

In order to form a government, the AKP needs the support of an opposition party. During the campaign season, all opposition parties vehemently stated that they would never consider entering a coalition with the AKP. In particular, CHP, the main opposition party, is the most unlikely to form a government with the AKP due to its voter base. One option may be the nationalist opposition party, MHP. Transitivity exists between the voters of the AKP and the MHP; both their voter bases are traditional, conservative and nationalist. Yet, in order for the AKP to garner the MHPs support for a coalition, it needs to sacrifice the peace process and its plans for a presidential system. This would cause the government to utilize a security-oriented approach to the Kurdish Question and thwart Erdoans ambitions of a presidential system. Many high-level officials within the AKP have indicated that they are not as eager as Erdogan for a possible transition to a presidential system. Erdogans influence over the AKP may be definitive in such a scenario. Violent protests and clashes in the southeastern region of the country may erupt during such a U-turn. This is a less likely scenario, unless the MHP is offered an appealing compromise.

Another possibility may be for the AKP and HDP to partner to form the government, which would also include large bargaining chips such as constitutional amendments. HDP co-chair Selahattin Demirta has explicitly stated that the HDP would never ally with the AKP without the recognition of its principles on fundamental rights by the AKP, and if he pivots on this issue, this could gravely alienate a large base of current supporters. Thus, if it were to enter into coalition talks, the bargain would most likely be for fundamental rights and gains in the peace process. A presidential system would likely be off the agenda, upsetting Erdoans ambitions. On the other hand, the AKP may not also be very eager to form a government with HDP as it would be met with disagreement from its conservative and pious voter base and shift these voters to the nationalist MHP.

Minority Government

If the AK Party fails to form a government, the main opposition party CHP will be the next in line to enter into coalition talks. Normally, a CHP-MHP coalition would be likely, but they would not have enough seats in the National Assembly. The HDP would have to be included in the coalition, but a coalition that includes both MHP and HDP is nearly impossible. The only feasible alternative is likely to be a CHP-MHP coalition with external support from the HDP, but this government would most probably remain for a year or two before early elections would need to be called.

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Early Elections

If no party is able to form a government within 45 days, the president can call for early elections. Early media reports and statements from the AKP suggest that the former ruling party is betting on this scenario. The opposition parties ability to compromise with each other is likely to determine the outcome, should the AKP fail to, or refrain from, forming the government in the first place. Early elections cannot be held within the three-month post-election period.

Short-term Economic Implications

Instability regarding the uncertainty of Turkey's government formation is very likely to have a negative impact on the Turkish economy. The Turkish stock exchange, Borsa Istanbul, is expected to fall between the levels of 76 - 77,000 base points until the government is formed and uncertainty dissipates. Analysts are expectng the USD/TRY to reach 2.81 Turkish Liras to the dollar. Once the future of the government and its formation is more certain, markets will likely find their equilibrium. In the medium term, the election outcome is likely to have a positive economic effect due to a perceived democratic gain.

For more information about APCO Worldwide in Turkey, please contact: Zeynep Dereli Executive Director (t) +44 7747 783302 (m)+90 549 4204540 zdereli@apcoworldwide.com

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Analysis of turkey general electIonsIntroductIonChart I: Unofficial Election Results

the 10 percent threshold and Its ImpactChart II: Parliament Composition According to the Unofficial Election ResultsKurdish Roulette Paid Off

Whats next?Coalition AlternativesMinority GovernmentEarly ElectionsShort-term Economic Implications