Wednesday, 18 July, 2018

Turkey's new finance chief, Erdogan's son-in-law, vows to bring inflation down

Nellie Chapman | 12 July, 2018, 00:38

ANKARA: President Tayyip Erdogan appointed his son-in-law as Turkey´s finance minister in a new cabinet on Monday, hours after he was sworn in with sweeping new powers at the head of a country he has dominated for 15 years.

Erdogan was elected on June 24 in a vote marking Turkey's transition to an executive presidential system of government, doing away with the prime minister's post, among other changes.

Erdogan said the executive presidency would put behind a "system that heavily cost our country through political, social and economic chaos".

The lira, which has lost almost a fifth of its value against the dollar this year, dropped almost 3 percent to 4.74 to the dollar minutes after the cabinet announcement.

Meanwhile Mevlut Cavusoglu remains in his post as foreign minister.

Erdogan has also pledged to end the state of emergency that has been in place since the failed July 2016 coup and which has seen the biggest purge in the history of modern Turkey.

"We are facing a period where we have to work hard to bring inflation down to single digits again", said Albayrak, adding that Turkey will have a stronger monetary policy in the upcoming period.

The president will be able to select his own cabinet, regulate ministries and remove civil servants, all without parliamentary approval.

Just as Ataturk transformed an impoverished nation at the eastern edge of Europe into a secular, Western-facing republic, Erdogan has fought to bring Islamic values back into public life and lift millions of pious Turks-long ostracised by the secular elite-out of poverty.

In other words, Turkey will be an institutionalised autocracy.

State news agency Anadolu said Erdogan's inauguration celebration was attended by Venezuelan President Nicolas Maduro, Russian Prime Minister Dmitry Medvedev and Sudanese President Omar Hassan al-Bashir, wanted for war crimes by the International Criminal Court.

Erdgoan has said he will announce the cabinet on Monday night, promising to make appointments from outside parliament and to slim down his ministerial team to 16 from more than 20. Erdoĝan has repeatedly clashed with strategic allies such as the United States and the European Union in recent years over the war in Syria, Turkey's accession to the EU, human rights abuses by Ankara, Europe's failure to support Turkey during the coup attempt, and rising Islamophobia in Europe.

Prominent market-friendly ministers, who encouraged investor confidence, are not included in Erdogan's new government.

Turkey also faces a widening current account deficit making it reliant on weak foreign investment to plug the gap. It then briefly dropped more than 1 percent after a decree removed a clause stipulating a five-year term for the central bank governor.

The five-year term served as a sort of "shield" for the central bank, helping to ensure its independence from politicians, said Ugur Gurses, a former central banker.

The moves have already stoked market fears that Erdogan will enact economic policies that will cause the ongoing currency crisis to spiral out of control. He defeated a coalition of opposition parties in a snap election last month to hold onto power.