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Why Erdogan So Desperate To Retain Istanbul? With A Budget Of Over $4b, It Is Also A Cash Cow For Companies Close To The Ruling Party

Re-election for Istanbul is scheduled for today [Sunday] after Turkey’s president, Recep Tayyip Erdogan, went to great lengths to undo the success of CHP candidate Ekrem Imamoglu.

Eventually, Erdogan got what he wanted. Citing mistakes in the appointment of polling station officials, Turkey’s election authority overturned the results, booted Imamoglu out of his office and ordered a re-run.

The Economist in a report says on paper the mayoral hopeful, Imamoglu, is running against AKP’s Binali Yildirim. In practice his main opponent has always been Erdogan.

Ahead of the re-run, Erdogan has placed the state news agency, responsible for providing live election results, under the authority of his own communications directorate. And he has accused his opponent of terrorist links and compared him to Egyptian dictator Abdel-Fattah al-Sisi. “On Sunday, are we going to say yes to Binali Yildirim,” he asked a crowd, “or are we going to say yes to Sisi?”

The reason why Erdogan has resorted to such antics, and why some observers fear he may do so again, is that losing Istanbul today could mean losing the country tomorrow. Home to 16 million people, the city is Turkey’s most important political stage, its economic centre of gravity and a key hub in Mr Erdogan’s own patronage network.

Istanbul is where political careers are made, cemented and squandered. And according to The Economist, Erdogan now fears that the city that propelled him to high office could do the same for Imamoglu.

In a few months, Imamoglu has already become the face of a more open, inclusive Turkey, a far cry from Erdogan’s vision of a country beset by outside enemies, including Europe and America, and divided between patriots and traitors. Winning in March transformed him into the opposition’s star. Winning in June would turn him into a presidential contender.

Istanbul, which boasts a GDP bigger than Portugal’s and a budget of just over $4 billion, has also become a cash cow for companies close to the ruling party. Amid a building frenzy that has consumed the city over the past couple of decades, developers have raked in billions of dollars. Successive AK administrations have helped transform Istanbul into a rentier economy.

“The rent provides profit for business”, says Selva Demiralp, a KOC University academic, “and opportunities for the government to bond with the businessmen.” Some of the key players in construction also run some of Turkey’s biggest media groups. Erdogan, controlling them means controlling the press.

Losing the city would also spell trouble for a number of foundations that are close to Erdogan and his party. According to a recent report, foundations managed by the president’s children and friends, as well as a range of Islamic groups, received nearly $100 million in subsidies from the municipality between 2014 and 2018.

TURGEV, whose board includes Erdogan’s daughter, the wife of his communications director and a former AK mayor of Istanbul, collected nearly 51.6 $8.8 million. An archery club headed by one of the president’s sons got 16.6 million lira. Such foundations are also known to benefit from largesse from abroad. As a former deputy prime minister revealed a few years ago, TURGEV received $100 million from unspecified foreign donors between 2008 and 2012. Imamoglu has pledged to cut off municipal funding to such groups.

Cigdem Toker, a journalist who documented the subsidies earlier this year, was promptly sued by one of the foundations. In today’s Turkey, that is par for the course.

On June 14, an Istanbul court accepted an indictment seeking prison terms of up to five years against a pair of Bloomberg reporters, a popular economist, and dozens of others for journalism and social media posts “targeting Turkey’s stability and economic order.”

Despite earlier speculation that he would stump tirelessly on Yildirim’s behalf, Erdogan has largely stayed off the campaign trail over the past month, possibly to avoid being associated with another defeat. But make no mistake. Turkey’s leader has plenty of skin in the game.


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