Mohammad Himshak
The appointment of Mehmet Simsek, Finance Minister of Turkey’s new government, has opened the door to speculation about possible changes in the country’s economic policy to address the current imbalances caused by the unconventional policies pursued and sent a reassuring message, That would address investor concerns about the situation in Turkey.
Simsek, who has a long history in economic policy, has relied on documents recasting the Turkish economy, which has suffered various blows and shocks over the past few years, as expressed by economic indicators such as inflation and unemployment. That way, the lira plummeted to levels not seen in years.
Therefore, many challenges await the Turkish Finance Minister, who will eventually return to his former ministerial post, accompanied by a troubling economic situation, which is reflected in investor confidence in the Turkish economy. Markets are also awaiting his economic policies and the potential changes they may bring in the next phase.
Mehmet Simsek previously served in the Ministry of Finance in Erdogan’s government from May 1, 2009, and then in Ahmed Davutoglu’s government until 2015, after which he served as an advisor to the prime minister in Ben Ali Yildirim’s government.
Simsek, who was included in the Foreign Policy 500 list in 2013, is widely admired in Turkish circles and analysts see his appointment in the new government as a sign of the unconventional policies pursued by President Erdogan , which despite high inflation, is largely based on rate cuts. .
main mission
Karam Saeed, a researcher specializing in Turkish affairs, told Sky News Arab Economy: “The appointment of Mohammad Simsek is a clear indication of Turkey’s commitment to Recep Tayyip Erdogan. Efforts to right the wrongs of the economy and try to overcome this crisis have reached unprecedented levels during the President’s new term, reflected in rising inflation and unemployment and most importantly the collapse of the local currency, which over the past period has The dollar has depreciated a lot.
The Turkish lira has lost about 12 percent of its value since the start of the year and more than 90 percent in a decade that has passed through various phases from recession to boom.
Turkey’s inflation rate hit its highest level in nearly a quarter of a century, reaching 85.51% in October last year, before falling to 39.59% in May, the lowest level in about a year and a half.
This comes at a time when Turkey’s president has pledged to cut interest rates to single digits while boosting growth to 5.5% by 2024.
Türkiye.. new government formally takes office
Monetary Policy
“With his appointment (Himsak), President Erdogan’s hegemony and control over the issue of setting the country’s monetary policy may decline, because one of the conditions for Himsak to take office is He’s the one who makes the decisive decisions — the one who sets and manages monetary policy.”
Erdogan was sworn in for a new presidential term after winning elections last week, bringing his rule into its third decade. Turkey’s longest-serving leader Erdogan won 52.2 percent of the vote in the May 28 runoff.
“These potential changes are expected to reassure foreign financial markets and investment markets, and perhaps in the next phase we will see a possible change in policy in Turkey through the appointment of Shimshak, as well as the Turkish president’s control over monetary policy,” said a researcher specializing in Turkish affairs. decline.
Saeed does not believe there is a possibility of conflict between the two parties afterwards, defending it by saying: “The Turkish president realizes that the current phase is the end of his time and that there may be new pressures leading to new understandings and characteristics of the AKP’s policies to ensure that Continuity after Erdogan, because where is the party’s thinking going now five years into the future?
obvious changes
He explained that changes in the formation of the Turkish government and the promotion of Hakan Fidan from the intelligence service to the foreign ministry, as well as the dismissal of Interior Minister Suleiman Soylu and the appointment of Simsik’s finance minister, point to the possibility that Turkey Policies on the economic level and foreign relations have undergone marked changes.
Observers believe Simsek’s appointment could end years of unconventional economic policies under Erdogan that have featured lower interest rates amid high inflation and state control of markets. The report quoted the new minister as saying:
– Transparency, consistency, predictability and compliance with international standards will be the basic principles for achieving the goal of improving the level of social welfare.
Our main objective is to support central banks in combating inflation through structural reforms.
There is no choice but to return Türkiye to rational economic policy.
Reducing inflation to single digits in the medium term and accelerating structural transformation to reduce the current account deficit are critical for our country.
Qualified economic file management team
Turkish scholar Muzaffar Şenil said in an interview with “Sky News Arab Economy”, “Muhammad Simsek is a famous economist, but such a big problem (the economic situation in Turkey) requires a team of high-quality people to reach a sustainable solution.”
He continued, “Then Simsek cannot be the savior alone. The question must be answered: How much freedom will Erdogan give Simsek in terms of economic policy and the formation of his own team?”
At the same time, the Turkish scholar pointed out that “Turkey needs the rule of law and an independent judiciary regardless of the economic team” and explained that “the market has insufficient confidence that Erdogan will not reject Simsek in a short time” due to Recent experience,” which is questionable. At his discretion.
On Saturday, Turkish President Recep Tayyip Erdogan pledged to realize the vision of the Turkish century during his new term, saying: “In the next five years, we will continue to unswervingly realize the Turkish Vision of the century,” also wrote a letter in the mausoleum notebook of Mustafa.