Economic policy

Turkish tycoon calls for economic policy overhaul

One of Turkey’s top business tycoons has spoken out against the country’s ‘depleting’ inflation and spiraling exchange rate, in a rare public intervention that will be seen as a thinly veiled criticism of the president’s economic policies Recep Tayyip Erdogan.

Omer Koc, chairman of Koc Holding, one of the country’s oldest and largest companies, called for an economic overhaul as he said he was “extremely sad” to see the impact of inflation annual – which reached almost 20% last month – on ordinary Turkish citizens.

“There is no other sustainable alternative than to drive down the exchange rate, [high] costs and their result: inflation,” he said at an event in Istanbul, according to a transcript of his remarks. published by the company on Friday.

Koc made no mention in his remarks of Erdogan or his Justice and Development Party (AKP), which has ruled Turkey for 20 years. But his comments will be seen as an unusual and thinly veiled criticism of the Turkish leader, whose increasingly unpredictable and unorthodox approach to managing the country’s $765 billion economy has spooked foreign investment and provoked growing public discontent in his country.

Koc called for reforms to help attract badly needed foreign investment, adding, “It is obvious that for peace in our country and for sustainable economic growth, it is necessary to act in accordance with reason. and science”.

He said the country needed to return to the “fundamental reform agenda” of the first decade of the 2000s, a time when the AKP had just come to power and was following an IMF program after a dramatic financial crisis. It is a period considered by many in the Turkish business world as a golden era.

As Erdogan consolidated his own powers and increasingly meddled with nominally independent economic institutions, the country suffered a succession of crises. Analysts said its pursuit of high growth at all costs has been accompanied by double-digit inflation and a falling currency.

Ten years ago, it cost 1.86 lira to buy a dollar. On Friday, the currency hit a new high, hitting 9.24 against the greenback as investors fretted over Erdogan’s decision to fire three members of the central bank’s monetary policy committee.

The Turkish president’s interference in monetary policy has combined with broader concerns about strained relations with the West and the erosion of the rule of law to scare away vital international capital.

Foreign direct investment amounted to just $5.7 billion last year, according to central bank data, compared with a peak of more than $19 billion in 2007.

Turkish businessmen rarely criticize Erdogan or his policies, fearing losing lucrative government contracts or being the target of politically motivated investigations.

Koc Holding itself, seen by the Islamist-origin AKP as the embodiment of the old secular elite against which they have long rebelled, has had a strained relationship with the ruling party during its two decades in power. .

In 2013, Erdogan accused the company of harboring violent protesters at its Divan hotel in Istanbul during the Gezi Park protests that rocked the government. A criminal investigation was opened against the group after its patriarch published a thinly veiled criticism of Erdogan later the same year.

Koc’s brands include Tupras, which runs Turkey’s largest oil refinery, white goods producer Arcelik (which does business as Beko in Europe), Yapi Kredi bank and a joint venture with the giants Ford and Fiat automobiles. Its revenue was equivalent to more than 6% of the national gross domestic product in 2020, according to its annual report, and 7% of the country’s exports.

There was no immediate reaction from Erdogan or his ruling party to Koc’s remarks.

Additional reporting by Funja Guler in Ankara