One of Turkey’s top business tycoons has spoken out against the country’s “exhausting” inflation and spiralling exchange rate, in a rare public intervention that will be seen as a thinly-veiled criticism of president Recep Tayyip Erdogan’s economic policy.
Omer Koc, chair of Koc Holding, one of the country’s oldest and most important companies, called for an economic overhaul as he said it was “extremely saddening” to see the impact of annual inflation — which rose to almost 20 per cent last month — on ordinary Turkish citizens.
“There is no lasting alternative but to bring down the exchange rate, [high] costs and their outcome: inflation,” he said at an event in Istanbul, according to a transcript of his comments 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 the past 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 running the country’s $765bn economy has scared away foreign investment and caused rising public discontent at home.
Koc called for reforms to help attract sorely needed foreign investment, adding: “It is obvious that, for the sake of peace in our country and for sustainable economic growth, it is necessary to act in accordance with reason and with 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 was newly in power and was following an IMF programme after a dramatic financial crisis. It is a period seen by many in the Turkish business world as a golden era.
As Erdogan has consolidated his own powers and increasingly meddled in nominally independent economic institutions, the country has suffered a succession of crises. Analysts have said that his pursuit of high growth at all costs has come with the side effect of double-digit inflation and a sliding currency.
Ten years ago, it cost 1.86 lira to buy a dollar. On Friday, the currency hit a new record low, reaching 9.24 against the greenback as investors fretted over a decision by Erdogan 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 stood at just $5.7bn last year, according to central bank data — down from a peak of more than $19bn in 2007.
Turkish business figures rarely criticise Erdogan or his policies — fearful of losing lucrative public contracts or being targeted by politically motivated investigations.
Koc Holding itself, seen by the Islamist-rooted AKP as the embodiment of the old secular elite that they have long railed against, has had a tense relationship with the ruling party during its two decades in power.
In 2013, Erdogan accused the company of sheltering violent protesters in its Divan Hotel in Istanbul during the Gezi Park demonstrations that rocked the government. A criminal investigation was opened against the group after its patriarch published a thinly-veiled critique of Erdogan later that same year.
Koc’s brands include Tupras, which runs Turkey’s largest oil refinery, the white goods producer Arcelik (which trades as Beko in Europe), the bank Yapi Kredi and a joint venture with the auto giants Ford and Fiat. Its revenues were equivalent to more than 6 per cent of national gross domestic product in 2020, according to its annual report, and 7 per cent 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
Read More: Turkish tycoon calls for economic policy overhaul