Turkish President Recep Tayyip Erdogan signaled a move toward more traditional economic policies as he unveiled sweeping changes to his cabinet, revamping his finance team and replacing an interior minister known for his hardline rhetoric.
Erdogan shook up several top administrations, announcing new finance, foreign and interior ministers in a speech late Saturday.
The appointments come less than a week after Erdogan won one of the most contested elections since he became Turkey’s leader two decades ago. The presidential election, which was run-off after Erdogan failed to garner half the votes in the first round, showed that while the president retains strong support among his base, his popularity has taken a hit due to Turkey’s worsening economic problems.
The sweeping changes announced on Saturday, in which only two ministers remain from Erdogan’s previous government, come ahead of municipal elections next year in which the president’s AKP will seek to regain control of Istanbul and Ankara, Turkey’s two largest cities.
“Turkey’s century has begun, and the doors to our country’s growth have opened,” Erdogan said in his inauguration speech hours before announcing his new government, referring to how the Turkish republic will soon celebrate its first centenary.
Erdogan’s decision to reinstate Mehmet Simsek, a former deputy prime minister and finance minister who is revered by investors, as head of finance and treasury is one of the clearest signs yet that Erdogan may change course on the unorthodox economic policies many blame him for sending him off. The lira recorded its lowest levels and ignited a severe inflation crisis.
Analysts also saw the selection of Cevdet Yilmaz, who previously held senior economic posts in the Turkish government and parliament, as vice president as a sign of a possible policy shift.
An economist, who asked not to be named, said that Yilmaz’s appointment shows that “Erdogan’s priority is the economy and there will be a shift from economic policies, which is positive for Turkey, but ministerial changes (alone) will not be enough.”
Noureddine Nabati, Şemshak’s predecessor, pursued a “lira” strategy in which the government took an increasing number of measures to push businesses and consumers not to hold foreign currency. The policies, along with a sharp decline this year in Turkey’s foreign exchange reserves, have deepened the fears of foreign investors who have fled the country’s markets in recent years.
Another important change was the replacement of Suleyman Soylu, known for his hard-line anti-Western rhetoric and calling the May elections a Western attempt at a “political coup”, as interior minister. He will be succeeded by Ali Yerlikaya, governor of Istanbul.
“Soylu was problematic and toxic,” said Wolfango Piccoli of the consulting firm Teneo, noting that he took a staunchly anti-Western and particularly American stance that “antagonized a lot of people.”
On the foreign policy front, Erdogan has replaced his longtime foreign minister, Mevlut Cavusoglu, who is well known in Western capitals. This role will be assumed by Hakan Fidan, the head of Turkish National Security.
Fidan will enter the role with Turkey under strong pressure from his NATO counterparts to allow Sweden to join the alliance. The country has so far resisted, insisting that Stockholm take more measures to fight terrorism first.
Piccoli said the cabinet changes appear to be a sign that Erdogan is adopting a slightly “moderate” stance, with a more “technocratic flare” than the previous leadership.