Marcus Svedberg of East Capital -
One should always be careful in drawing parallels between seemingly similar events in different countries. But there are a number of striking similarities between the current protests in Turkey and the recent events in Russia.
These are two radically different emerging markets, but there are common denominators among the protestors as well as in the regimes, especially their leaders, but also in the triggers and the underlying causes for the protests. One of the conclusions that the protests are not about economics but economic development, is one of the explanations as to why it is happening now. This may seem paradoxical so it may help to start with theory.
Does economic development foster democracy?
Academics have been wrestling over the question of whether there is a positive relationship between economic development and democracy. There is a huge amount of literature dedicated to the question and, as always with academics, a considerable amount of disagreement. But there seems to be a lot of support for the idea that the emergence of a middle class is positively correlated with political activism.
One scholar summarized the so-called modernization research neatly by arguing that, "after a period of record economic performance, the rapidly expanded middle class is no longer content to enjoy unprecedented personal freedom and prosperity; they also crave liberty and voice in the governing of their countries."
The economic performance applies neatly to both Russia and Turkey, as both countries have seen GDP per capita go from low single thousands to double digits over the past decade, while inflation has moved in the opposite direction. There is thus a base for political activism in both countries, which brings us to the cause for the protests.
It is not about economics but politics
Revolutions and protests are born from several causes. One is obviously from desperation or hunger in the face of poverty or economic mismanagement. But neither Russia nor Turkey fits this profile, as their economies have been doing relatively well recently. Both economies have slowed down recently, but there is no problem with unemployment and anecdotal evidence from the protests suggest that people are not upset about the state of the economy. It is, actually, possible to argue that protests have been delayed by the strong economic performance. Some academics argue that citizens may tolerate authoritarian tendencies longer if the economy is strong. This "performance legitimacy" is especially strong for oil-exporting countries like Russia.
Rather, the protest movement in Russia and Turkey is rather born out of prosperity. It is very much led by a middle class that has profited from the economic success. These students and professionals want their leaders to do to politics what they have already done to economics. Protestors are unhappy about the political system and protest against abuse of power in general, and against legal repression and corruption in particular. Protesters do not buy the stabilization argument, which is often used in both Russia and Turkey, and criticize the oppression of the opposition and the media.
The triggers are weirdly similar
The most obvious trigger for protests would be elections. And it is true that the Russian protests intensified after the parliamentary elections in December 2011 and that Turkey is entering a political season with three upcoming elections over the next two years. But the protests were triggered by environmental concerns or more specifically with a forest in Moscow and a park in Istanbul.
The first street protests in Russia started when the authorities planned to build a high-speed road through the Khimki forest in the summer of 2010 and the Istanbul protest began over plans to build a shopping centre in Gezi park. The protests quickly spread and were transformed to deal with the larger issue described above. In early 2012, there were protests in more than 100 Russian cities and towns, and the Turkish protests quickly spread across Turkey and internationally.
Regimes are similar but different
Russian and Turkish politics are very different, but there is one important similarity: President Vladimir Putin and Prime Minister Recep Tayyip Erdogan have been in power for over ten years and plan to stay in power for the foreseeable future. Putin has swapped jobs with current Prime Minister Medvedev in order to avoid breaking the constitution, while Erdogan wants to change the constitution to remain the most powerful when his third terms expires.
Both take credit for stabilizing their respective countries, which were marked by political and economic chaos in the 1990s, and both are criticized for being too authoritarian. The opposition is weak and divided in both countries (although arguably more sophisticated and institutionalized in Turkey) and they have few advisers that can say no to them (except perhaps current Turkish Deputy Prime Minister Babacan and former Russian Finance Minister Kudrin).
The protestors are young, urban and educated
It is the middle class in a broad sense that have taken to the streets in Russia and Turkey. The crowds tend to be young, urban and educated. These groups have not necessarily been politically active previously and may belong to different political parties or no parties. It is more of a civil society movement than a political movement, and it is organized online. They mock the state's control of mainstream media and get their information from the internet and foreign sources. The protests have also been predominantly peaceful although some rockets were thrown in Turkey as a response to the heavy force used by the police.
The protestors are not a majority though, and would struggle to form a joint alternative to the incumbent leaders even if the playing field was even. Putin and Erdogan may have lost some popularity lately, but they remain the most trusted politicians in Russia and Turkey.
It is premature to believe that the street protests in either country will lead to any immediate change of power. However, it is very difficult to go back once the Pandora's Box of protests has been opened and both regimes will have to operate in a more complex political environment going forward. The first real change may be the election for mayors of Istanbul and Moscow in 2014 and 2015 respectively.
Ultimately, it is a good thing that the middle class is becoming more politically assertive, even if it creates some uncertainty and volatility on financial markets in the short term. The Russian and Turkish economies have improved tremendously over the past ten years and there is now a growing demand for political reforms as well. Political transition is important in its own right, but many analysts also believe that such political change is necessary for these countries to move to the next stage in their economic development as they have exhausted most of the "easy" catch-up factors.
In a way, Putin and Erdogan have become victims of their own success. They did what was needed when assuming office a decade ago. A strong state involvement was arguably important to stabilize the Russian and Turkish economies ten years ago. But Putin and Erdogan now have to pull the state back a step and nurture rather than dominate their economies and people. That may prove difficult but there is no other choice if they want to avoid getting stuck in transit.
Marcus Svedberg is senior economist at East Capital
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