Erdogan is Trapped Between Business and Voters: The Political Economy of Migration

Political Economy of Migration
Syrian refugee on bus in Turkey. Photo from VOA.

By Mehmet Yaşar Altundağ and Abdullah Esin

Amid the turmoil in Turkish politics triggered by viral videos on social media that show how Afghan-Pakistani immigrants easily pass the Turkish borders, President Erdogan gave a very clear speech on May 9th 2022: “We will protect these brothers who have fled war to the end… They may go if they wish, but we will never chase them away. We will not leave them in the arms of murderers.”

It is puzzling that despite the fact that 85% of the Turkish population wants Syrians to return back to Syria and oppose the open border policy, the government insists on pro-migration policies. How does a coalition of ultra-nationalist parties which consist Islamist Justice and Development Party, [Adalet ve Kalkınma Partisi, AKP] and the Nationalist Movement Party [Milliyetçi Hareket Partisi] government support such pro-migration policies? More importantly, why does the current AKP-MHP coalition insist on their migration policies despite the fact that there is a very powerful backlash from both society and the opposition?

Source: UNHCR

We argue that the political economy of migration must be taken into account to analyze the open-border policy of Erdoğan’s regime. As Turkey goes into a deeper economic crisis with an increase in the cost of living and a currency crisis, the political economy of migration becomes much more important, especially for Small-Medium-Enterprises (SMEs) who are the backbone supporters of AKP. Millions of migrants not only mean a vast resource of cheap labor, tax avoidance, billions of liras to be exploited by export; but also a significant number of consumers, therefore, serving an impetus for the Turkish consumption economy.

While the reliance of labor-intensive sectors on cheap labor and credits are the engines of Erdoğan’s growth-driven economic policies, public tolerance against immigrants has significantly decreased. This is why he is trapped between voters and businesses. However, before digging into the political economy of migration, we need to go back to the beginning of the crisis and contextualize the government’s migration policies.

The Beginning of the End

Turkey hosts the world’s biggest refugee population with 3.6 million Syrian asylum seekers and 400.000 foreigners mostly from Afghanistan and Pakistan. The numbers might likely be higher as there are a plethora of unregistered migrants, and even high-level officials cited the number of migrants at 5 million, if we count all the backgrounds. In 2013, then-minister of foreign affairs, Ahmet Davutoglu evoked that one hundred thousand immigrants would constitute a psychological limit for the Turkish people, and anything beyond that would be impossible to manage. Ironically, this limit was surpassed within only a few months.

In a short time, the number of Syrian immigrants reached millions and they spread across Turkey, especially in İstanbul, and in the southern cities. Within the first two years of the civil war, the number of Syrian migrants in Turkey reached 1 million and the number rose threefold in just one year (2015-16). At the beginning of the war, the open-border policy for immigrants was both a practical and normative choice. Erdoğan’s regime had leverage against Asad, found the justification for its involvement in the civil war, and wanted to maintain its image as the protector of Muslims.

The government’s inability and incapacity to design integration policies gave way to ghettoization in metropoles, and created insecure and unemployed immigrants with a population of at least 3.6 million. Since then, the government did not implement necessary inclusive policies to integrate Syrians into the society, such as setting up a new ministry or appointing a high-level official to be in charge of immigration policies. Neither the government has circulated effective discourses to prepare the society for the new immigrant reality. Rather, the government applied the rhetoric that it was a temporary problem and Turkish people would need to take care of these people until the civil war ended in Syria.

The failure of the AKP-MHP coalition’s policies is not specific to migration. Besides, they have pushed the country to the verge of a cliff. Turkey is facing a severe economic crisis as inflation rates are continuously rising — officially reaching 58% — and the value of the Turkish lira is dwindling. Housing prices are quintuplicated in Istanbul, leaving people crippling as they are dealing with increasing living expenditures.

Source: TÜİK, Turkish Statistical Institute

This is one of the most important reasons behind the recent anti-immigration wave in Turkey. A great potential reservoir of hostility has found both its engine and fuel. Economic depression and political anxiety project anger and fear toward migrants as they are the ones who are easily blamed.

Economic Growth for the Sake of Everything

However, not everyone is complaining about the economy. The official statistics institute announces that Turkey grew by 3.8% in the second quarter of 2023 thanks to strong demand, manufacturing, and exports. Decreases in wages vis-a-vis foreign currencies lead to an opportunity for an export boom thanks to the cheap Turkish lira. SMEs and industrialists benefit from unorthodox economic policies which were abandoned just after elections under Mehmet Şimşek’s ministry. The consequences of the new status quo are reflected in the new labor and capital share of the economy. In just two years, the labor share decreased to 25.4 % in 2022 from 38.8% in 2020. Meanwhile, the capital share increased to 54% in 2022 from 42% in 2020.

  Immigrant workers are one of the pillars of this new structure of the political economy. Their presence provides a huge potential for a low-paid unregistered workforce for Turkey’s labor-intensive sectors and businesses. The share and size of Syrian immigrants in Turkey’s informal economy are so huge that neither the government nor business elites can turn their back on this profit potential. As of 2020, 750.000-950.000 Syrians are working in informal sectors, creating a huge price advantage for Turkish manufacturers, considering the fact that the informal economy represents 31% of the Turkish labor market.

The flow of Syrian capital to Turkey and the rising numbers of Syrian companies has continued to contribute to the Turkish economy in the following years. Former Minister of Trade, Ruhsar Pekcan, stated that By the year 2019, the number of companies registered to Syrians reached 15,159”. These Syrian companies comprise 20% of foreign companies in Turkey.

Syrians’ contribution to the economy, especially in the labor-intensive sector, has begun to be used as a means by the government for dealing with the economic recession and decreasing productivity in the manufacturing sector.

Simultaneously, Syrians’ contribution to the economy highlighted by the government to justify its open-border policy. As such, Former Deputy Prime Minister Veysi Kaynak stated that Turkey should see 3 million people as human capital. Currently, in many cities like Kahramanmaraş, Adana, Osmaniye, Gaziantep, and even Ankara, if there were no Syrians, we could not have met the demand for unskilled workers, and our factories would have stopped.”

Deepening State-Business Alliance and Rising Co-Dependency

Many analysts have a difficult time understanding Erdogan’s unorthodox economic policy and open-border regime for immigrants. Especially after the covid crisis, the government has insisted on lowering the interest rates and increasing domestic consumption despite the fact that almost all countries have adopted strict monetary policies to fight against rising inflation.

The economic crisis triggered by the Covid-19 pandemic in Turkey occurred when Turkey already had a fragile economy. Decreasing domestic demand and production negatively affected SMEs which are the engines of economic growth. In the process leading up to the 2023 elections, the government has initiated an economic model which aims to reverse the SMEs’ losses during the pandemic and bolster the economy.

In that sense, Erdogan’s unorthodox economic policies and open-border regime for immigrants are intertwined. The latter serves the former. The SMEs which are mostly represented by MÜSİAD (Independent Industrialists and Businessmen Association) have also a political role since the AKP government’s electoral success in Anatolian cities partly depends on SMEs’ contributions to employment and financial assistance to local AKP organizations. In return, the incumbent party maintains its economic growth strategy based on cheap credit and low-interest rates.

The Turkish government’s failed economic model, which is called the “Turkey Economy Model”, mainly aimed to increase the Turkish exporters’ competitive advantage through decreasing interest rates and depreciation of the Turkish lira. The chairman of MÜSİAD defended the new model with these words: “We have entered a period in which the New Economy Model instills confidence in manufacturers, industrialists and investors.”

However, not everything went as expected. Skyrocketing inflation and the Turkish lira’s inexorable depreciation have evaporated the competitive advantage of Turkish exporters because of their heavy reliance on the import of intermediary goods and energy. Given these economic conditions, the informal employment of Syrian immigrants creates an important cost advantage for exporters, and immigrants’ positive contribution to domestic demand cannot be disregarded by both the government and its business allies.

“From Brothers to Workers”

This new informal alliance between business and the government on the political economy of immigrants can also be easily traced in President Erdoğan’s shifting discourses. In the beginning, the dominant discourse toward Syrian immigrants was built upon Islamist values and normative rhetoric.

Erdoğan made his first domestic visit to Gaziantep in 2014, a province in Southern Turkey with a huge Syrian migrant population after he was elected as president. In this visit, President Erdoğan addressed Syrian migrants with these words: “We, as Turkey, are happy and in justified pride for hosting you here for about 4 years. You have become muhajirs. You left your homeland out of necessity. We became the Ensar and mobilized all of our means for you. No matter what anyone says, you never became a burden to us.”

President Erdoğan’s speech completely reflected the ideological foundations of his open border policy. The word “muhajir” defines the first Muslims who left Mecca because of torture and repression and the “ensar” means the people of Medina who accept and help the Muslims of Mecca.

This “ensar-muhajir” rhetoric both empowered the AKP government’s ambitious goals to become the protector of the Muslim world and justify the open border policy in the eyes of their voters. It was a reflection of the AKP government’s neo-Ottomanist foreign policy doctrine which was theorized and applied by the former prime minister and academic Ahmet Davutoglu.

However, this strategy failed and made the opposition question the government’s immigration policy even more, destroying the fragile hopes that Syrians would eventually go back.

The government’s approach to immigrants and their model of justification has also changed during this process. The changing rhetoric of government officials demonstrates the transition from a normative justification that emphasizes Islamic values to pragmatism and immigrants’ importance for the economy. For example, former Turkish Interior Minister Süleyman Soylu said in a public meeting, “The people who came first to İstanbul were from the Black Sea region and they worked in the hardest jobs. Then the Kurds came and worked in these jobs. Who is working in the hardest jobs now? Afghans, Pakistanis, and Syrians…”

However, the deepening economic crisis stirred social anger toward the immigrants which produced strong anti-immigrant sentiments within the society, forcing Erdoğan to take a step to control public anger and stop the declining votes of his party. In these circumstances, Erdoğan announced in May 2022, “We are working on a new project for initiating the voluntary return of 1 million Syrian brothers which we host.”.

This announcement was the reflection of the government’s awareness of public anger and its declining votes. However, business allies did not support this plan because they relied on a cheap labor force. The chairman of MÜSİAD said in a TV program, “Unfortunately, people in Turkey don’t like certain jobs. It is not desirable to work in labor-intensive jobs. Most of the immigrant workers work in these jobs” to show their discontent, and force the government to take steps backward.

After only one week, Erdoğan stated that “We will protect these brothers and sisters who left Syria and became refugees in our country until the end. They can return to their homeland whenever they wish, but we will never expel them.”.

Erdoğan’s contradictory speeches reflect the tension between satisfying the capital and heeding to the voters’ demands. On the one hand, President Erdogan wants to maintain the alliance between his ruling coalition and the Anatolian bourgeoisie, on the other hand, he tries to control rising public anger against refugees. To solve this dilemma, the government’s rhetoric on the migration issue fluctuates between both sides.

Therefore, the ultranationalist AKP-MHP coalition’s open-border policy is a reflection of the governing coalition’s embedded alliance with the capital, and not a reflection of their ideological position.

The 2023 Elections and the Policy Shift

Many political experts had anticipated Erdogan’s defeat in the 2023 elections due to several factors, including the plummeting Turkish lira, the crackdown on civil rights, the government’s inability to address pressing issues, and the recent immigration crisis. The opposition alliance, led by Kemal Kılıçdaroğlu, regarded the immigration issue as Erdogan’s Achilles’ heel and transformed the elections into a referendum on whether migrants would remain in or leave Turkey especially after the 1st round of elections.

Contrary to these expectations, Erdogan secured a historic victory in the recent elections against the opposition. However, he has altered many of his policies post-election, particularly concerning immigration. While he had appeared resolute in protecting immigrants leading up to the elections, he has since shifted his immigration policies, and Turkish police have begun expelling unofficial migrants. Erdoğan is now attempting to strike a delicate balance between meeting popular demands and fulfilling business expectations, and it appears that he is prioritizing popular demand following the elections.

About the Authors

Mehmet Yaşar Altundağ holds a master’s degree in political science from Sciences Po Paris. His academic pursuits encompass a wide range of topics, including Turkish nationalism, secularism, immigration, and contemporary far-right ideologies. In addition to his academic interests, Altundağ actively creates semi-academic and investigative political content on YouTube, along with regularly contributing op-eds on contemporary global affairs and Turkish politics.

Abdullah Esin is currently pursuing a master’s degree at Boğaziçi University, focusing on the intersection of the political economy of authoritarianism and defense industries. In addition to his academic pursuits, he serves as a political advisor and consistently publishes investigative political content.

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