March 31 (Bloomberg) -- Turkish Prime Minister Recep Tayyip Erdogan vowed to pursue those behind graft allegations against his government after his party's victory in local elections.
Erdogan’s Justice and Development Party or AKP won 45 percent of the national vote yesterday, according to partial and unofficial results reported by NTV television with 87 percent of ballot-boxes counted. That’s up from 39 percent at the last local election in 2009, though shy of the 50 percent that the AKP won in 2011’s parliamentary vote. The AKP was set to retain control of the biggest city, Istanbul, and was running neck-and-neck in the capital, Ankara, with the main opposition Republican People’s Party, which won 29 percent nationwide.
Even amid the worst political crisis of Erdogan’s rule, the opposition made few inroads into the dominance of his party, which has won every election since it came to power in 2002. The premier campaigned on his government’s successes in improving the economy, health care and transport, saying that record was more important to Turks than corruption charges concocted by political enemies.
Yesterday’s vote took place after a deluge of recordings, some purportedly from police wiretaps, flooded the Internet and called into question everything from the financial probity of Erdogan’s ministers and family and their religious piety to the integrity of Turkey’s foreign policy and the independence of its media. The nation’s financial markets have plunged since news of corruption investigations emerged in December, though they rallied in the week leading up to the balloting.
Speaking in Ankara after most results were in, Erdogan pledged to bring “a stronger economy and politics as well as democracy.” Addressing thousands of jubilant supporters from the balcony of his party headquarters, he also pledged to go after the movement of U.S.-based Islamist cleric Fethullah Gulen. Gulen’s supporters in the judiciary and police are blamed by the government for instigating the graft probe that ensnared several of his ministers, and leaking its contents.
“The nation has foiled insidious plans and immoral traps,” Erdogan told thousands of jubilant supporters. He called the results a defeat for the “politics of lies and montage,” referring to the leaked recordings, and urged the opposition to “open a new page.”
The opposition republicans said initial results were manipulated, without presenting evidence, and were claiming victory in Ankara, where NTV’s preliminary results had Erdogan’s party less than 1 percentage point ahead.
The opposition Nationalist Movement Party came third nationally with 15 percent of the vote, NTV reported.
Erdogan has responded to the graft probe by firing key prosecutors and thousands of police officials, saying they were taking orders from Gulen, and slapping bans on Twitter and YouTube. Emrullah Isler, deputy prime minister, said the local election victory would provide momentum for a presidential election in August, in which Erdogan may run.
The AKP has roots in Islamist movements and has won support by easing curbs on religion imposed by previous secular-minded administrations. It won in cities across Turkey yesterday, with the exception of Kurdish and secular strongholds in the southeast and the Aegean and Mediterranean coasts respectively.
Erdogan’s appeal is largely based on economic growth that has averaged more than 5 percent a year. Economists have cut their growth forecasts for this year amid the political crisis and the slide of the lira, which led the central bank to raise interest rates in January. The median estimate in the latest Bloomberg survey of economists on March 27 was 2.2 percent.
A “strong overall victory” for AKP would also be positive for the Turkish lira and would “strongly increase the likelihood of an AKP victory in the presidential elections,” Abbas Ameli-Renani, an analyst at Royal Bank of Scotland Group Plc in London, said by e-mail.
The currency gained 0.7 percent to 2.177 per dollar at 1:25 a.m. in Istanbul.
The rally may be short-lived because a “notable pickup in street protests” is likely in reaction to Erdogan’s win, Ameli-Renani said.
“Turkey is now divided into two camps,” Henri Barkey, a Turkey expert who is a professor at Lehigh University in Pennsylvania, said by phone. “No matter what the results are, we are going to see great instability.”
In the last week before the vote, Turkish markets rallied, paring the losses they have posted since Dec. 17 when the graft allegations became public. The benchmark equity index added 7 percent in the week, though it’s still down 7.7 percent since Dec. 17. Yields on benchmark two-year bonds fell 69 basis points last week to 10.79 percent.
In southeast Turkey, Kurdish parties that seek regional autonomy headed the vote count in most cities. Erdogan has broken taboos by starting a dialogue with Kurdish militants who have been fighting the Turkish army for three decades. The separatists have warned that violence may flare again if Erdogan doesn’t take concrete measures to meet their demands soon after the local vote.
To contact the editors responsible for this story: Andrew J. Barden at email@example.com Alaa Shahine, Ben Holland