Erdogan's economic model of family loyalties collapses

Some analysts say the Turkish president felt compelled to sacrifice his son-in-law to save what could be saved.

The sudden resignation of Turkish Finance Minister Berat Albayrak announced the end of the model that President Recep Tayyip Erdogan sought to impose, which is based on replacing those who are politically close to the leaders of the Justice and Development Party (AKP) with those close to his family circle, which has led to the collapse of the Turkish lira and years of perpetual economic crises.

The Republican People’s Party (CHP), Turkey’s main opposition party, said on Monday that the announcement of the resignation of Albayrak, Erdogan’s son-in-law, was an unprecedented step that amounts to a “state crisis.” The party also criticised the sudden ouster of the central bank governor.

Albayrak said he stepped down for health reasons, but his resignation came one day after the Turkish president appointed former Finance Minister Naji Iqbal as the new central bank governor, replacing Murat Uysal.

The reasons behind this move have not been announced, but officials attributed it to the decline of the Turkish lira and considered that official silence on the matter is due to Erdogan’s attempt to show that it is business as usual on the economic front, thus avoiding having to admit his mistakes and his refusal to take the advice of former officials such as former Economy Minister Ali Babacan, who is credited with engineering the surge in Turkey’s economy during the first years of the Erdogan era, former President Abdullah Gul and former Prime Minister Ahmet Davutoglu.

At a press conference in Ankara, CHP leader Kemal Kilicdaroglu said that Erdogan is running the country as if it were a “family business,” adding that the central bank had lost its independence.

He stated that it was also shameful that major Turkish media outlets had not reported Albayrak’s resignation for nearly 24 hours.

For his part, Babacan, leader of the opposition Democracy and Progress Party, said that Albayrak’s resignation represents a declaration of bankruptcy of Erdogan’s government and his regime.

“What happened is not a statement of resignation, but a statement of bankruptcy; it is a declaration of bankruptcy of the government and the regime,” Babcan said.

There are conflicting narratives about Albayrak’s resignation. One says that the Turkish president felt compelled to sacrifice his son-in-law to save what could be saved, especially after the circle of anger over the shaky economic policies expanded, threatening Erdogan’s popularity and fortunes in the upcoming 2023 presidential elections.

A second version reveals that Albayrak actually resigned of his own volition because he was angry at not being consulted about the appointment of the new central bank governor, Naji Iqbal, with whom he has fallen out.

Turkish analyst and journalist Yavuz Baydar pointed out that there is known animosity between Iqbal and Albayrak. He relayed to The Arab Weekly that Albayrak had relied on the mediation of his father, Sadik Albayrak, who was Erdogan’s main guide and is credited with the latter’s rapid rise in the AKP. But Erdogan apparently refused to respond to Albayrak Sr.’s calls, prompting Berat, who viewed the appointment of his opponent as a stab in the back, to resign.

Baydar, who is the editor-in-chief of Ahval, an online news website on Turkish affairs, believes that what matters to Erdogan is that Iqbal and his new team at the central bank heal the country’s economic wounds, and that the issue is whether or not, by sacrificing members of his family, the Turkish president will have enough room for tactical manoeuvring in order to save the economy, which has been exposed to great pressure due to a lack of public confidence and an empty treasury.

Within two years of Albayrak taking over the finance ministry, Turkey suffered a currency crisis in 2018, which caused the lira to plunge to record lows against the dollar this year.

Albayrak also sparked public outrage when he downplayed the sharp decline in the lira last August. He addressed Turkish citizens in a live television interview at the time, saying, “Do you receive your salaries in dollars?”

He also added in statements that went viral on social media, “Do you have any businesses conducted in dollars?”

Berat Albayrak is married to Erdogan’s eldest daughter, Esra, and they have four children. He is close to Erdogan and has often accompanied him on trips and political meetings with world leaders.

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