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Turkish deputy PM says executive presidency would steady economy

Turkish deputy PM says executive presidency would steady economy

ANKARA: Recep Tayyip Erdogan’s bid to secure an executive presidency will boost the country’s struggling economy if, as expected, it succeeds, Turkey’s deputy prime minister said, blaming instability and regional tensions for the downturn in the country’s growth.

Until recently, Turkey boasted one of the better performing emerging markets. But its economy shrank by 1.8 per cent in the third quarter of 2016 — its first contraction in seven years — as it felt the impact of last year’s failed coup, political instability and a wave of terror attacks. Mr Erdogan has responded by tightening his grip on power. His ruling Justice and Development party released a draft of a new constitution last month that would radically alter Turkey’s parliamentary democracy by centralising the powers of the government in the president’s office. A proposed referendum on the charter — expected in the first half of the year — is now seen as a critical event for the economy as the lira regularly hits new lows and both allies and critics assail Mr Erdogan for what they describe as an autocratic style of government.

But Mehmet Simsek, the deputy prime minister who oversees the economy, insisted that a Yes vote would provide stability and unlock the country’s economic potential, especially by freeing up the legislature to pursue long-promised reforms.“My point is this; if you’re doing an analysis of the Turkish political economy I think you would probably easily make an argument that if you have stability in the executive branch the economy is likely to perform better,” Mr Simsek, a former economist at Merrill Lynch, told the Financial Times. “This is where some optimism is warranted.”