It’s a project that has attracted but defeated at least five Ottoman sultans – including Suleyman the Magnificent – plus one four-time prime minister. Which is what makes it perfect for President Recep Tayyip Erdogan, who wants to be bigger and better and greater than them all. What better than Kanal Istanbul – a 45-kilometre man-made waterway, drilled across the European edges of Istanbul, to connect the Black Sea with the Marmara Sea – to illustrate Erdogan’s ambitions to rebuild his country? 

Transport Minister Binali Yildirim says he expects the canal will be put out to tender by the end of the year. Estimated to cost tens of billions of dollars, the project (called “crazy” even by Erdogan) envisages the creation of what is effectively a new town of 500,000 along its shores. Never mind the ‘Putinisation’ of Erdogan, never mind sultans – now he seems to be channeling Ramses II.

Call Erdogan what you will – Kanal Istanbul apart, these big infrastructure projects are not mad fantasies. From the massive new Istanbul airport, which will be among the world’s largest, to new bridges and tunnels across the Bosphorus, new motorways and multiple public transport projects – all are needed to alleviate crippling congestion. The projects have their critics, but the issues are dear to Turks’ hearts. Even Istanbul’s numerous failed Olympic bids suffered from fears of traffic problems. Plus, the contractors are welcome employers.

No, most of the megalomania comes from the trappings and the politics. Nihat Ozdemir, who is building Istanbul airport, has announced that he is pushing hard to open on Erdogan’s 64th birthday, in February 2018, and says it might well be named after the president. Kanal Istanbul is supposedly going to finish in 2023, when Erdogan plans to preside over commemorations for the republic’s centenary.

Erdogan’s rush to ensure everything is in place for that big date is sweeping all before it. The extraordinary second general election last year, a desperate bid to regain control of parliament for his Justice and Development Party (AK), was one example of what he’s prepared to do. The latest victim is Prime Minister Ahmet Davutoglu, eased out because the handpicked premier was not quite puppet enough, daring to claim credit for international diplomacy and dragging his feet on the grandest project of all – securing Erdogan a super-presidency.

Many pundits believe Erdogan will get his way. Davutoglu will be replaced with an even weaker loyalist with no ambitions. “Davutoglu was Turkey’s last prime minister; what has gone is not just Davutoglu but the office of Prime Minister,” says Akif Beki, Erdogan’s former spin doctor.

There could well be a third election soon, when Erdogan hopes that the Kurds and the nationalists are swept from parliament to make way for more AK deputies. Or a referendum on the presidency. Or both. On the face of it, the president seems to care little for what happens to the economy, strained by politics and the weight of millions of refugees. Instead, headlines are full of Erdogan’s frenzied pursuit of all opposition, from Kurds to journalists to antagonistic businessmen; his humourless prosecution of satire; his disputes with the central bank.

But investors are not yet completely scared off. They seem to be simply waiting, as one waits for a child to get his toy and stop his tantrum. The thing to do is to price the country high during this fuss and hope for calm afterwards, Michael Harris, head of research at Renaissance capital, tells me. Standard & Poor’s has just revised Turkey’s credit rating outlook from negative to stable after growth turned out better than expected and a feared stop in external financing didn’t materialise. Even the refugee problem, seen only as a blight, could be helping, according to S&P analyst Frank Gill, as the country’s new arrivals are consuming and the government’s support for them trickles into the economy.

Corruption has failed to dislodge the AK government despite widespread allegations. And although tenders for many big projects have not exactly been transparent, reports are that the contractors are doing a decent job – they wouldn’t dare do otherwise on anything with the president’s name to it. Bankers also say international consortia are continuing to bid, expecting that with so many projects around the cronies will eventually run out of capacity.

Even the hounding of opposition businesses such as Bank Asya has not yet sent people scuttling. “Erdogan hasn’t made that mistake of bringing down a major listed company” as Putin did with Yukos, said one Turkey expert at an investment bank. “Is he really saying: I’m going to allow the private sector to do what it needs – just don’t interfere with me politically? Well, people won’t care much as long as the country’s stable and growing.”

Erdogan has not done much to directly hurt the economy, and, powerless though we suspect he is, if market-friendly Mehmet Simsek remains in the post-Davutoglu cabinet that would be a comfort to investors. Many alternative emerging markets have slower growth with even worse regimes.

So far, so Teflon Tayyip. So what’s the tipping point? How far can Erdogan go before he starts to become a quantifiable economic liability?

Downfall

Well, once a super-president, he can be blamed for everything that goes wrong. It is often forgotten that Erdogan faces his own election in 2019. He may be a ruthless authoritarian of the old school, but he relies on public support – helped immeasurably by the complete lack of viable alternative – for his power. According to a new book currently garnering headlines, “The Power Paradox” by Dacher Keltner, power is retained long term by compassion and empathy: if that’s the case, Erdogan needs to show some, fast.

In any case, if his authoritarian bent continues in a way that it worries even hard-nosed investors, the public, which a former MP friend of mine swears has been literally “bewitched”, won’t be so enamoured of him once his recklessness affects their ability to buy smartphones.

There’s no obvious rival now, but there are still three years to go. Remember, his AK Party went from its founding to government in just 15 months.

This opens up an intriguing possibility. What if, after all his efforts to create an uber-presidency, Erdogan were to lose the next presidential election in 2019, gifting all his new found power to an upstart rival? And if that new president got to crown and name those precious projects in 2023? Now there’s a thought.