On the day when local elections concluded with an absolute victory for the AK Party, the Turkish Statistics Institute announced the country's gross domestic product (GDP) rose by 4 percent in 2013. This growth is considered significant considering that the latter half of 2013 was marked by efforts to destabilize the government and derail the reconciliation process with the Kurds.
The Purchasing Managers Index (PUMAX), published monthly by MÜSİAD (Independent Industrialists' and Businessmen's Association), one of the most prominent business NGOs in Turkey, fell below 50 points in May 2013 when the Gezi protests began and dropped down to 48 points in June 2013, its lowest level. However, the Average Index, consisting of both the service and manufacturing index, rapidly climbed to the level of 60 points when the protests calmed down. Despite the contraction of the European economy in 2013, industrial export levels were boosted and domestic demand showed an upward trend. Industrial production in the last quarter of 2013 demonstrated that the appetite for investment in Turkey is quite high.
Turkey continued to attract direct foreign investment throughout this process. Hence, 4 percent GDP in 2013 is primarily based on industrial investment and increases in the current account deficit.
Under these circumstances, an increase of 7.3 percent was observed in industrial production in January 2014, the highest boost in the last 27 months. There are two main causes for this increase. Firstly, Turkey did not attempt to artificially decrease growth in 2013 as opposed to 2012. Secondly, exchange rates met their actual value. The increase in industrial production, realistic exchange rate and its reflection on exports led to a serious reduction in the foreign trade deficit in February 2014 as shown by foreign trade statistics, which were published on the same day as GDP-2013.
All these figures show that, the most important problem for the Turkish economy, its foreign trade deficit, decreased with the increase in qualified growth. As growth in Turkey was primarily achieved through short-term hot money inflow in former periods, the foreign trade deficit was increasing in parallel with growth. However, this time GDP boosted while the foreign trade deficit decreased, while at the same time pushing down the unemployment rate.
Since 2008, AK Party governments have put into effect a new economic policy which reduces the unemployment rate and promotes regional development. These policies, at the same time, paved the way for the establishment of small and medium-sized businesses (SME) in Anatolia which focused on producing exports and these enterprises led to the creation of a new middle-class in their boundaries. Apart from that, military appropriation allocated from the central budget was reduced and assigned to health and transportation budgets. These two significant policies were key to the AK Party's success in local elections.
The AK Party has tended toward a direction that will set an example for all developing countries at the insistence of Prime Minister Erdoğan, through attempts such as the GAP Action Plan, low-interest policy and SME-supported export approach.
Investments in infrastructure, health and transportation made this aspect even more noticeable.
Maybe for the first time in Turkey's history, the state has moved to swiftly aid households and, to that end, started to implement mechanisms that transfer income from industry to households. The establishment of the Turkish Competition Authority, tax audits in monopolies, the emergence of new actors other than monopoly structures who won tenders up to now, the fact that these new actors started to win tenders and large budgets allocated to education, health and transportation infrastructures are such examples.
Another significant example is that public banks took steps to improve the situation of people and small-sized enterprises such as creating a competitive market that decreases interest rates. Other than that, the remarkable transformation in energy policies and acceleration of investments to make Turkey an energy hub between Asia and Europe is seen as one of the most significant reasons why the AK Party's share of the vote increased.
Women in Anatolia voted primarily for the AK Party, which has invested heavily in health, education and transportation instead of military expenses.
All in all, GDP and foreign trade data simultaneously with the election results indicate that a substantial proportion of the votes for the AK Party were based on the poor and the middle-class whose economic situation improved. However, this scenario can be realized, contrary to what is alleged by some circles, only through an environment of an open market and gradually improving democracy.
The allocation of increasing shares from the central budget to the poor and the middle class can only be possible with democratization of the state in countries like Turkey. In the former periods, monopoly capital put pressure on politics and used economic sources for their own benefits.
Whatever they may claim, Turkey is developing an open and competitive economy and corresponding anti-monopoly regulations, moves which have garnered support for this government, as indicated by backing the poor and middle class has offered to Erdoğan in recent elections.