A banner reading "Where is the $128 billion?" hangs at the Beyoglu district office of main the opposition Republican People's Party (CHP) in Istanbul, Turkey, April 13, 2021.
A banner reading "Where is the $128 billion?" hangs at the Beyoglu district office of main the opposition Republican People's Party (CHP) in Istanbul, Turkey, April 13, 2021.

ISTANBUL - Turkish President Recep Tayyip Erdogan could be finding himself cornered over opposition claims that his government $128 billion squandered in defending Turkey's currency, the lira.

Throughout Turkey, giant banners emblazoned with the words "where is the $128 billion?" hang from party offices of the main opposition, People's Republican Party, CHP.  Advertising trucks and vans carry images asking the same question, along with posters on billboards across the country, some with just the words "$128 billion Where?"

In Istanbul, the governor ordered the banners taken down, claiming they violated COVID restrictions. Video of the police taking down the huge posters in the middle of the night went viral on social media, only fueling more interest.

The CHP has countered by simply using the number 128, which has become synonymous with demands for accounting of the lost billions of dollars.

Meral Aksener, the firebrand leader of the opposition Good Party, iyi, joined in the assault on the government, "Turkey has become the land of disappearance under the great illusionist Erdoğan," quipped Aksener in an address to her parliamentary party deputies this month.

"Vaccines are missing,” and “128 Billion USD and the Minister of Powerpoint (referring to former Finance Minister Berat Albayrak) who lost the money is also missing," she said, referring to opposition claims that more than one million imported COVID vaccines are unaccounted for – a claim the government denies. 

Albayrak, Erdogan’s son-in-law, has not been seen public since reports said he was forced to quit in November.

Under the finance minister's two-year stewardship, billions of Turkey's foreign currency reserves were used to prop up the currency, as he confounded economic orthodoxy of keeping interest rates low, despite rising inflation.

A man is reflected at a foreign currency board in a currency exchange shop, in Istanbul, Turkey, March 22, 2021.

Albayrak followed Erdogan's unorthodox view that low-interest rates reduce inflation rather than the widely held belief that high rates are needed to tame rising prices.

Analysts warn the growing controversy over the opposition's slogan, "What happened to $128 billion,” is threatening to engulf Erdogan.

"The question drives Mr. Erdogan furious because it is essentially an assault on the integrity of his son-in-law Mr. Berat Albayrak," said political consultant Atilla Yesilada of Global Source Partners. "It also implies AKP cronies might have absconded with part of Central Bank F/X sales."

Economic hardship caused by the COVID pandemic, with rising unemployment and inflation, mean that questions over missing billions of dollars are striking a chord in the country. In recent weeks, the question "What happened to 128 billion" has been among the top three search questions on Google in Turkey.  

Erdogan on Wednesday accused the opposition of carrying out a campaign of "lies."

"This money was not gifted to anyone or wasted," Erdogan told members of his ruling parliamentary. "It simply changed hands and went to economic actors... and a large part of it has returned to the central bank," he added.

Turkey's President Recep Tayyip Erdogan speaks during his ruling party's congress in Ankara, March 24, 2021. (Credit: Turkish Presidency)

But the president caused alarm in the financial markets when he said 165 rather than 128 billion had been used defending the currency and that he would support such a policy again if needed. The Turkish lira plummeted after the comments.

"Erdogan is now saying $165 billion (were) used in two years to defend the lira. That is a huge sum spent on a failed FX intervention strategy," tweeted Timothy Ash, a senior Emerging Market Analyst of Blue Ray Investments. "I cannot think of another country that wasted such huge sums on a failed defense of the lira. Disastrous," he added.

Falling approval rating

Many analysts see Turkey's economic woes as the main factor behind Erdogan and his AKP Party’s slide in opinion polls. For the first time, the party's support, according to polls, has fallen below 30%.

Observers say Erdogan's struggle to contain the 128 campaign indicates a far broader problem facing the president. Having dominated Turkish politics for nearly two decades, they say he now appears to be heading into enemy territory.

"For the first time, the AK Party is obliged to a defensive strategy, and because it does not know how to play, it responds with kick and slap to every attack," said veteran pollster Bekir Agirdir of the Konda polling company.

The 128 campaign, using both traditional and modern means of communication and its slick presentation, is also a sign that Erdogan is facing a galvanized and effective opposition that appears to have a finger on the nation's pulse.

"The economic conditions in the country are getting harder, the government seems to be losing the grip of the pandemic, and to be honest, the opposition is playing tough," wrote political columnist Murat Yetkin for the website Yetkin Report.