Turkish President Erdogan's son-in-law ends silence to defend his economic legacy

This comes after Mr Berat Albayrak's 16-month public silence after a bruising encounter with President Recep Tayyip Erodgan. PHOTO: REUTERS

ISTANBUL (BLOOMBERG) - After 16 months of public silence following a bruising encounter with his father-in-law, President Recep Tayyip Erodgan, Turkey's former economy czar is back with a memoir on his tumultuous reign - with one glaring omission.

Mr Berat Albayrak's account of five years in government leading up to his bitter November 2020 fallout with the most powerful man in Turkish politics is a forceful defence of policies he oversaw, first as energy minister.

But over 287 pages, there's no mention of Mr Erdogan by name, even though it was the President who propelled Mr Albayrak's meteoric rise and ensured his unceremonious departure.

Their close links even sparked speculation Mr Albayrak, now 44 and married to Mr Erdogan's elder daughter Esra, was being groomed as a potential successor to the man who's led Turkey as prime minister or president since 2003.

Mr Albayrak's term was characterised by mostly-futile efforts to control the value of Turkey's lira, as it came under pressure amid repeated confrontations with the US, without resorting to additional interest rate hikes after some emergency monetary tightening.

Mr Erdogan holds the unorthodox view that higher borrowing costs fuel inflation.

But after officials raced through more than US$150 billion (S$204.98 billion) in foreign reserves without stemming losses in the currency, he was humiliated by a presidential decree that replaced the central bank governor with a political foe.

Mr Albayrak resigned two days later, spurring opposition calls for an inquiry into his management of the economy.

Mr Erdogan never took the demands seriously, once remarking "may a stone as big as (my) son-in-law fall upon you".

The book, titled This Bit Is Very Important, in a lighthearted reference to one of his favourite idioms, is Mr Albayrak's side of the story.

He portrays himself at the centre of an ambitious reform drive, breaking with his time in office when he praised Mr Erdogan as the main driver of prudent policymaking.

Criticism of his efforts to protect the lira are breezily dismissed.

Reserves "came under pressure", he writes, without saying whether he personally forced the central bank and state lenders to intervene.

Mr Albayrak blames a widening current account deficit and companies' net foreign exchange debt repayments during the pandemic for the losses, even though the decline in reserves began months before the Covid-19 virus emerged.

The rundown in reserves accelerated during market turmoil that preceded key municipal elections in March 2019.

A note by JPMorgan analysts at the time triggered the biggest plunge in the lira in a year, after which Turkish regulators began a probe into the US bank and others.

Exhibiting a world view close to Mr Erdogan's, Mr Albayrak describes the JPMorgan missive as "a new financial attack" on Turkey.

Foreign investors "shorted" the lira in an attempt to weaken it past psychologically important levels of 10-per-dollar before the elections, he writes.

Mr Erdogan has deployed his opposition to fickle "hot money" from abroad to explain the government's current push to transform Turkey into a manufacturing powerhouse based on a cheaper lira.

Foreign entanglements are a theme of the book. Mr Albayrak cites a series of tweets by then-President Donald Trump hiking some trade tariffs at the height of a diplomatic row between Turkey and the US over the fate of a detained American pastor.

"When I started as the treasury and finance minister, there was a big problem of external reliance on foreign resources, like in the field of energy. My first job was to face this reality," he writes.

Moves to curtail Turkish lenders' swap transactions with foreign investors were intended to reduce reliance on foreign cash flows, Mr Albayrak writes.

Many overseas investors instead saw an encroachment on market principles, and took their holdings in Turkish markets to historic lows.

Tapping another leitmotif of his father-in-law's Islamic-rooted rule, Mr Albayrak says he helped prepare Turkey for an eastward-shift in economic might as Asia rises.

It was "meaningful" that an exploration vessel he purchased from Norway made a massive natural gas discovery in the Black Sea only weeks after Istanbul's iconic Hagia Sophia was reopened for Islamic prayer in 2020, he says.

"It's been a gift to us from God that during this five years, we've enabled gains for Turkey that were beyond dreams."

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