Istanbul was the most important city in the world for longer than any other—from approximately 450 AD, when the Byzantine Empire was founded, till the Ottoman Empire fell at the end of the First World War (1918). It’s location on the Bosphorus, which was the nexus between the continents of Europe and Asia, made it a key commercial, cultural, and diplomatic centre over the years; Ataturk’s subsequent reforms turned Turkey into a modern state.
Today, Istanbul is an amazing place, a wonderful blend of khandani and hip, reflected in the extraordinary traditional architecture sitting side by side with very sophisticated contemporary art; in sync, the people live a sensitive balance between conservative and modern Islam—many Turks fast during Ramadan, and also party wildly drinking rake, and dancing and singing. I truly became a Muslim the first time I went to Istanbul, about 12 or 15 years ago, and the joy of it is reconfirmed each time.
We were in Istanbul for a few days last month, and stayed at a small hotel in Ortakoy, just by the bridge; our room had a small balcony with a breathtaking view, right on the Bospohorus. Breakfast lasted forever as the cimit bread and cheese and honey and tomatoes and cucumbers and melon and Turkish coffee kept lazy pace with the boat traffic just below, the idyll occasionally interrupted by ferry horns and the call from the mosque just to the left—allahoakbar.
While we were there, campaigning for the election for mayor of Istanbul was in full swing. Erdogan’s party, the AKP, had already lost the election for this post a few months ago, but he pulled all his corrupt institutional control to declare that election invalid—it was too narrow a victory/loss he said (13,000 votes). People were really upset by that, and given that the economy was also in deep shit, Erdogan’s ass was really kicked—the winner, Imamoglu of the opposition CHP, won by over 800,000 votes, with 54% to AKP’s 45%!
Significantly, Imamoglu’s campaign was celebratory, about bringing people together, in stark contrast to the offensive polarisation that Turkey and much of the world has been suffering from over the past fifteen years or so, as demagogues (like Erdogan, Putin and numerous others) successfully seized upon the failures of previous decades of politics to sell “populism” to people in so many countries.
Democratic capitalism, the previous “-ism”, became the only game in town in 1981, when the Berlin Wall fell and the world became essentially unipolar. That cycle ended dramatically with the 2008 market collapse, which exposed what unfettered capitalist democracy had really become—an asset grab by a well-positioned minority. The criminal failure to demand accountability after 2008, increasing inequality as the “free” market did its job, and the US invasion of Iraq in 2003, which generated tragic waves of refugees, all fed the growing anti-establishment rhetoric, making it inward-looking, jingoistic and anti-immigrant—the new populism was born.
This new cycle probably began a few years into the terms of Erdogan and Putin, both of whom, interestingly, started out as mayors of major cities—Istanbul and Leningrad, respectively—about 20 years ago. This means the “populism” cycle has already been running for nearly 15 years; it probably peaked when Trump was elected—it is hard to imagine anything that could top that. With technology continuously narrowing all cycles, it would appear that this fake “-ism” has, at most, another 5 to 8 years to run.
The tempo at which it will unwind will, of course, be different in different countries, but the turning point will always be economic stagnation, which populism, almost by definition, creates. Turkey is already scraping the bottom; Russia is not far behind.
While the US is currently rocking on—unemployment is near an all-time low—the fact that the yield curve has remained inverted for over a month confirms that a recession is a probably less than a year away, just in time to spike Trump’s chances at re-election. The UK has its October 31 Brexit deadline, after which nobody knows how things will pan out, but it is odds-on that the economy will stagnate at best; a Parliamentary election is certainly on the cards and, with all political parties shamefully discredited, we could see the rise of a large number of independent lawmakers. Europe, which is holding on for dear life economically even as long-term bond yields have been negative for over 3 years, will doubtless suffer some fall-out from Brexit, which will hopefully drive some sense into the electorate.
India, which has also been hugely susceptible to polarising populism, is currently sitting pretty politically, but the government has a big job to rescue the economy. Modi is both remarkably strategically savvy and knows how to get things done—the trick will be to turn off the polarising approach to enable the economy to turn around swiftly. The Budget was an excellent first step.
Who knows, maybe in a few years, we will be able to say, Welcome to Mumbai!
Author is CEO, Mecklai Financial
Views are personal
