Elections over, Turkey's Erdogan eyes economic reforms - GulfToday

Elections over, Turkey's Erdogan eyes economic reforms

Turkey-Erdogan-750

Turkey's President Recep Tayyip Erdogan gestures as he delivers a speech at a rally in Istanbul. File photo

Soon after his ruling party faced defeat in Ankara and Istanbul in last Sunday's election, Turkish President Recep Tayyip Erdogan was quick to promise reforms to revive the country's weakened economy.

Stung by high living costs and a 2018 currency crisis, voters handed the AKP one of the party's worst setbacks after a decade and a half in power.

Now with no elections until 2023, Erdogan has room to focus on the economy, but analysts say he must convince investors already wary over his sometimes unorthodox policies, and worried about fallout from tensions with the United States.

Turkey-eletion-main2-750

An elderly couple get their ballots from an official at a polling station during the local elections in Ankara, Turkey on March 31, 2019. File/AFP

Turkey's lira can be volatile, but analysts said Erdogan's government must balance any gains from short-term stopgaps with the need for deeper reforms for more long-term stability.

Finance Minister Berat Albayrak, also Erdogan's son-in-law, has said Turkey will enter "an economic rebalancing period" after the elections and he is set to reveal reform details next week.

Albayrak is due to meet IMF and World Bank officials in Washington April 12-14 to "shed light on the new road map" for Turkey's economy, according to the Daily Sabah newspaper.

"On paper and in public speeches, the economic leadership... seems to agree reform is needed. In practice, the government's recent record is poor.

"As concerns about the struggling economy motivated many voters' decisions at the ballot box, Erdogan will be compelled to address its underlying problems," said Amanda Sloat at the Brookings Institute. "However, he has limited room for manoeuvre."

The AKP built its success on Turkey's strong growth and his supporters point to progress in living standards during Erdogan's 16 years in office.

But on Sunday, the AKP was punished in part because Turkish households were stung last year by a 30 percent slide in the lira during a diplomatic crisis with the US.

Once the darling of emerging market investors, economists say Turkey has lost some of its appeal as problems emerged with growth driven by foreign credit.

Tens of thousands of refugees and migrants, mainly from Syria, Iraq and Afghanistan, are stuck in Greece from when Balkan countries shut their borders in 2016, closing the main passage towards northern Europe.

In 2016, thousands of people had camped for months in another field in Idomeni, on the border with Macedonia. Greek authorities eventually cleared that makeshift camp out.

Reuters