March 31 (Bloomberg) -- Turkey’s Prime Minister Recep Tayyip Erdogan said a win in local elections hands him a mandate to chase the “traitors” within the state who are behind months of graft allegations.
Erdogan’s Justice and Development Party or AKP won 46 percent of the vote yesterday, according to unofficial results reported by NTV television with 98 percent of ballot boxes counted. That’s up from 39 percent in the 2009 vote. The AKP was set to retain control of Istanbul and was running neck-and-neck in the capital, Ankara, with the main opposition Republican People’s Party, which won 28 percent nationwide. The lira jumped more than 1 percent to the highest level in two months.
Even amid the worst 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 successes in improving the economy, health care and transport, saying that record was more important to Turks than corruption charges concocted by political enemies.
“Wherever they’ve infiltrated in the state over the past 35 to 40 years, we’ve been victimized,” Erdogan said. “But now, the time has come to weed them out.”
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.
‘Politics of Lies’
“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 recordings.
Addressing supporters from the balcony of his party headquarters in Ankara, Erdogan pledged to bring “a stronger economy and politics as well as democracy.” He also pledged to go after the movement of U.S.-based Islamist cleric Fethullah Gulen. The government accuses Gulen’s supporters in the judiciary and police of instigating the graft probe that ensnared several of his ministers, and leaking its contents.
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 probe by firing 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, which Erdogan may contest.
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 yesterday.
The Turkish lira gained 1.1 percent to 2.1668 per dollar as of 10:13 a.m. in Istanbul, according to data compiled by Bloomberg.
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 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.
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