Şimşek, who has a long history in economic policies, is counted on to reorganize the papers of the Turkish economy, which has been subjected to various blows and jolts over the past few years, as expressed by economic indicators, especially the inflation and unemployment rates, and the lira’s exchange rate is collapsing to levels not seen in years.
Thus, several challenges await the Turkish Minister of Finance, who will finally return to his previous ministerial portfolio, alongside a worrying economic situation which has resulted in investor confidence in the Turkish economy. The markets are also waiting for his economic policies and the potential change these policies could bring in the next stage.
Mehmet Simsek previously assumed the Ministry of Finance portfolio in Erdogan’s government on May 1, 2009, then in Ahmed Davutoglu’s government until 2015, after which he worked as an adviser to the Prime Minister in Ben’s government. Ali Yildirim.
Şimşek – who entered the list of the 500 most influential people in foreign policy in 2013 – is widely appreciated in Turkish circles, and analysts believe that his appointment in the new government is a sign of a step back from the unconventional policies carried out by President Erdogan, which is mainly based on reducing interest rates despite high inflation rates.
Main tasks
Karam Saeed, a researcher specializing in Turkish affairs, says in statements exclusive to “Sky News Arabia Economy”: “The appointment of Muhammad Simsek clearly indicates Turkey’s effort, during the new term of President Recep Tayyip Erdogan, to correct economic mistakes and trying to overcome the crisis which has reached an unprecedented level, and has resulted in the escalation of inflation and unemployment rates, and above all the collapse of the local currency, which has lost a large part of its value against the dollar during the last period.
Since the start of the year, the Turkish lira has fallen by around 12%, losing more than 90% of its value in a decade that has seen various stages between depression and economic prosperity.
Inflation in Turkey hit its highest level in nearly a quarter century, when it hit 85.51% last October, before rates fell to a low of 39.59% in May. for about a year and a half.
It comes at a time when Turkey’s president is pledging to cut rates into single digits, while raising the growth rate to 5.5% by 2024.
Monetary Policy
The Turkish affairs researcher said: “With his (Shimsak) appointment, President Erdogan’s hegemony and control over the issue of the country’s monetary policy-making may decline, as one of Shimsek’s conditions for assuming his position was for him to be the decisive decision-maker in the formulation and management of monetary policies.
Erdogan was sworn in for a new presidential term after winning elections last week, bringing his rule into a third decade. Erdogan, Turkey’s longest-serving leader, won 52.2% of the vote in the May 28 runoff.
For his part, the researcher specializing in Turkish affairs indicates: “It is expected that these potential changes will have the effect of reassuring foreign financial markets and investment markets, and perhaps in the next stage, we will see Turkey receive new investments in the context of the possible policy change in appointing Shimshak and the decline of the Turkish President’s grip on monetary policies.
Saeed does not believe in the possibility of a collision between the two sides later, justifying this by saying: “The Turkish president realizes that the current stage is the end of his era, and there may be new pressures which result in new understandings and characteristics. of AKP policy to ensure continuity after Erdogan, when party thinking is now at What stage after the next five years?
notable changes
He explains that the change in the formation of the Turkish government and the escalation of Hakan Fidan from Intelligence to the Ministry of Foreign Affairs, as well as the dismissal of Interior Minister Suleiman Soylu, in addition to the appointment of Shimshik to Finance, are all indications of the possibility of clear changes in Turkish policy at the economic level and in terms of foreign relations.
Observers believe that Simsek’s appointment could end the unconventional economic policies that continued for years under Erdogan’s rule, which were characterized by lower interest rates despite high inflation rates and the state control over markets. The reports quote the new minister saying:
– Transparency, consistency, predictability and respect for international standards will be among its basic principles to achieve the objective of raising the level of social well-being.
Our main objective will be to support the Central Bank in the fight against inflation through structural reforms.
– There is no choice but to bring Turkey back to a rational economic policy.
Reducing inflation to single digits over the medium term and accelerating structural transformation that will reduce the current account deficit are of vital importance to our country.
A qualified team to manage the economic file
For his part, Turkish academic, Muzaffar Şenil, said in exclusive statements to “Sky News Arabia Economy” that “Muhammad Simsek is a well-known economist, but such a big problem (the economic situation in Turkey) needs ‘highly qualified personnel’. team to find a lasting solution.” .
And he continues: “And then Şimşek cannot be a savior on his own. This question must be answered: what freedom will Erdogan grant Şimşek in terms of economic policies and the formation of his own team?”
At the same time, the Turkish academic points out that “regardless of the economic team, Turkey needs the rule of law and an independent judiciary”, explaining that “there is little trust in the deal that Erdogan will not reject Şimşek in a short period of time”. due to recent experiences”, which is debatable.
On Saturday, Turkish President Recep Tayyip Erdogan pledged to implement Turkey’s vision of the century during his new term, saying: “Over the next five years, we will continue to work with determination to implement Turkey’s vision of the century,” while writing a message in the shrine notebook of the founder of the modern Turkish republic, Mustafa Kemal Atatürk, during his visit to the mausoleum after taking the constitutional oath in parliament.
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