Realist, not conformist analysis of the latest financial, business and political news

At Least Erdogan’s Son In Law – Turkey’s New Finance Minister – Has Run A Real Business

It’s possible to view Turkey as retreating – advancing if you prefer – to something like the power and economic status it had as the Ottoman Empire. The point being back then that just everything depended upon the Sultan. Sure, sometimes it was the Vizier who had the real power, but the legal status was that the entire thing belonged to said Sultan. State employees were in fact slaves – quite literally in law – of said Sultan. All land, industry, belonged to him. Above things like household goods, possibly houses, there wasn’t really a concept of private property in fact.

This is what led to a certain amount of economic ossification of course. Who would invest in private sector economic activity if upon death – as it would – all reverted to the Sultan. OK, this wan’t entirely and wholly true. But it was of estates. One could be gained by rising in the government service – one became a Pasha. But once office ended that estate was passed along to the new office holder. Families didn’t get to keep them. It’s meritocratic feudalism. Which had its merits, sure, it meant that the grandees and the office holders were those with the nous and ambition to gain office. But it also meant that there was no multi-generational investment nor stability of ownership. The second causing the first of course.

At which point, today’s news:

From the moment he entered politics just three years ago, it was clear that Berat Albayrak would not be constrained by the limits of his official energy brief. As the son-in-law of president Recep Tayyip Erdogan, the former business executive soon found himself setting out the government’s position on military operations, joining high level overseas visits and accompanying his wife’s father on the campaign trail.

Few expected, however, that Mr Erdogan would be bold enough to put his 40-year-old protégé in sole charge of the economy at a time of mounting concerns about its health. As he formally adopted his new role as combined treasury and finance minister on Tuesday, Mr Albayrak promised to “work night and day” to maintain fiscal discipline and bring down the country’s soaring inflation.

Well, that’s easy enough, just tell Pops in Law to stop printing money. Which, given that the election and assumption of greater powers are now over he might be willing to do.

Sycophantism lies at heart of Erdogan’s new Turkey

That’s what tends to happen with concentrated power. Everyone sucks up to the person with that power concentrated in them. So, how long before economic position is once again simply in the gift of the ruler, something that can and will be taken away upon either displeasure or death? And what does that do for the long term of the economy? Again.

Still, there is a bright side to this:

Moscow’s accusation that President Erdogan is running a “family business” in smuggling Isis oil has thrown the spotlight on relatives of the Turkish leader who have been dogged by accusations of nepotism and corruption.

An opposition MP claimed this week to have established “that there is a very high probability” that Berat Albayrak, Turkey’s energy minister and Mr Erdogan’s son-in-law, was linked to the supply of oil by the terrorists.

It would appear that he has direct experience of running a profitable business. Not something true of most Finance Ministers around the world.

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