Meet the 40-Year-Old Erdogan Son-in-Law Running Turkey’s Economy
PhD in finance? Check. Graduate school in the U.S.? Check. Experience as a corporate executive? Check.
On the face of it, Turkey’s 40-year-old economy czar Berat Albayrak has many of the traits that ensured his predecessors were respected by investors. Yet his appointment as Turkey’s chief economic policy maker on Monday caused the biggest bloodbath in Turkey’s financial markets since a failed military coup two years ago.
Investors’ disappointment over Albayrak is less about his economic credentials than his family pedigree. He’ll be answering to his father-in-law, President Recep Tayyip Erdogan, who is already using his new executive powers to tighten his grip over the central bank.
Albayrak’s predecessors, including Mehmet Simsek, reined in the president’s go-for-growth instincts to keep Turkey’s $880 billion economy on a sustainable path, easing the political pressure on the bank to cut interest rates as Erdogan wanted.
The president’s son-in-law may not provide that bulwark, said Nigel Rendell, a senior analyst at Medley Global Advisors in London.
“Yes, he’s got an MBA from a U.S. university and he’s been a CEO, but is he really going to stand up to his father-in-law? Would he be prepared to argue that interest rates should be significantly higher and economic policy much tighter?” Rendell said by email. “If we look back and ask who’s stood up to Erdogan and come off better, it’s a short list. In fact, it’s a list with no names.”
The lira lost more than 3 percent against the dollar after Albayrak’s appointment as the Treasury and finance minister was announced Monday night. On Tuesday, Turkish bonds tumbled, pushing 10-year yields to a record high. Stocks also slid.
A political rookie who only joined parliament in 2015, Albayrak’s actions leading up to the next rate meeting on July 24 will come under intense scrutiny. But he’s been a fierce critic of high interest rates and frequently advocated swift cuts, even as the International Monetary Fund accused the central bank of failing in its mandate and losing credibility.fullstory
