Opinion | Berat Albayrak resignation: The departure of Erdogan’s son-in-law

Having long lost its independence, mainstream Turkish media appeared too afraid to report on the resignation for 24 hours, until the presidency finally issued a statement saying Albayrak’s decision to step down had been accepted. In the absence of an official explanation, Turks took to their favorite WhatsApp groups, where the popular explanation was that Albayrak had resigned in protest of the replacement of central bank governor last week without his knowledge. Who knows — and does it even matter?

Albayrak, the prodigal son-in-law, had been Erdogan’s heir apparent. He was placed in charge of the Turkish economy in 2018, at a tender age of 40. During his tenure, he oversaw a rapid decline in what was once one of the fastest-growing emerging markets in the world. Today, unemployment is high, inflation is in double-digits and the Turkish lira has been in free fall, having declined 30 percent against the dollar this year alone. No one wants to invest in Turkey, and portfolio outflows alone show money fleeing. Worse, in an effort to prevent further depreciation of the Turkish lira, over the past year, Turkey’s central bank is estimated to have sold over $100 billion from its coffers via state banks, sending net reserves to a sharply negative territory.

This is tantamount to selling family silver to buy ribbons and ornaments for a birthday party. As a result, Turkish economy is on the brink of a precipice.

But make no mistake, while Erdogan’s son-in-law may ultimately emerge as the scapegoat of Turkey’s economic decline, in reality he was only enacting the Turkish leader’s vision — in this case, accommodating a strongman’s obsession with low interest rates. Erdogan has long seen interest as “the mother of all evil,” theorizing that “interest rates are the cause of high inflation,” upending a standard economic theory. What President Trump has tried to do over Twitter on Federal Reserve decisions, Erdogan has done through legislation and coercion, step by step diminishing central bank’s independence and replacing its governors.

The political story here has a lesson for all. On a larger frame, Turkey is paying the price for turning a relatively competitive and transparent economy into a personalized affair micromanaged by one man with extreme discretion. In 2017, Erdogan succeeded in overhauling the country’s system of governance from a parliamentary democracy to a consolidated presidential system. He has argued that Turkey should be run “like a corporation” and that bureaucracy and the judiciary — all things that make up a system of checks and balances — were “shackles” that prevented progress. One by one, the independence of the nation’s economic institutions, from central bank to autonomous institutions such as the competition or capital markets boards, were dismantled, all stacked with Erdogan loyalists. By the time the president appointed his son-in-law as the economy tsar in 2018, with a consolidated portfolio that combined ministries of finance and the treasury, the transformation had been complete.

Any normal government faced with this kind of picture would consider a stand-by program from the…