Today, on July 27, 2023, Hafize Gaye Erkan, the Governor of the Central Bank of the Republic of Turkey, introduced herself to the Turkish public by presenting the third Inflation Report. The Central Bank of the Republic of Turkey prepares and releases this report to the public four times a year. Prior to delving into the meeting's details and the CBRT's institutional capacity, it is important to highlight that Erkan demonstrated her ability to read and comprehend the report prepared by the CBRT staff. This might sound peculiar, but it addresses a previous issue where the former CBRT governor occasionally made statements that contradicted the content of the report during both report presentations and the question and answer sessions that followed.There were instances when questions about certain aspects of the report were answered in a manner that deviated from both the report's content and the principles of economic science. This could be attributed to the former president's political involvement. However, even when faced with more technical questions posed by economic reporters or investment professionals, it became evident that he lacked detailed knowledge on the subject. Considering merit and bureaucratic capacity in Turkey, it is now possible to assert that Hafize Gaye Erkan, despite not being an economist, instills more confidence in the market, if not complete confidence.When it comes to the institutional capacity and the principle of independence of the Central Bank, unfortunately, Erkan has not lived up to the expectations of his position. Given the way Turkey is governed and President Erdoğan's governing style, it appears unlikely that Erkan would openly criticize Erdoğan. Instead, he has chosen to indirectly refer to the previous period. For example, he mentioned that when he assumed office, he encountered a "gift of macroprudential measures," implying that some actions were taken without careful consideration. He acknowledged the inconsistency in these measures, with some being expansionary and others tightening. Erkan emphasized the need for simplification to address this confusion.While making these technical criticisms of the previous period, Erkan was asked by a reporter about his thoughts on Erdoğan's thesis that 'interest is the cause and inflation is the effect', a notion that has dominated the discourse on the Turkish economy in recent years. However, Erkan did not respond to this question, stating that he did not want to get into political issues. Nevertheless, this was a highly technical matter, despite being politicized by Erdoğan. Frankly, I would have expected Erkan to briefly explain the conditions under which this view is valid or not, and if necessary, mention the Neo-Fisherian effect, while indicating that it might not be a valid model for the Turkish economy.&nbsp;Since we were talking about technical issues, these question marks could have been addressed in a very coherent and scientific way without Erdoğan being strongly criticized. But in a system like the "presidential government system", where the winner wins everything and can impose his point of view on the entire bureaucratic structure, it seems that we will not be able to talk about the independence of the Central Bank or the president's representation of the position he occupies for a long time. <hr fr-original-style="" style="height: 0px; overflow: visible; border-bottom: none; clear: both; user-select: none; break-after: page; box-sizing: border-box;"> 1 Atilla Yazar ve diğerleri [GK], B. No: 2016/1635, 5/7/2022; şuradan erişilebilir: https://kararlarbilgibankasi.anayasa.gov.tr/BB/2016/1635&nbsp;2 Abbas Yalçın ve diğerleri, B. No: 2014/8146, 29/3/2023; şuradan erişilebilir: https://kararlarbilgibankasi.anayasa.gov.tr/BB/2014/8146 &nbsp;3 https://oad.org.tr/yayinlar/rapor/turkiyede-basin-ozgurlugu-raporu-%e2%80%a82022/

The Freedom Observer

While making these technical criticisms of the previous period, Erkan was asked by a reporter about his thoughts on Erdoğan's thesis that 'interest is the cause and inflation is the effect', a notion that has dominated the discourse on the Turkish economy in recent years. However, Erkan did not respond to this question, stating that he did not want to get into political issues. Nevertheless, this was a highly technical matter, despite being politicized by Erdoğan.

The Central Bank Governor Has Finally been Introduced

Many charities, non-governmental organizations, and public institutions set up to serve the public tried to rescue civilians from the ruins. The failure of the coordinative institutions in this process cost many lives. In this section, we discuss the strange donation campaign by public institutions.While all this was going on, there were some strange developments. A donation program called "Turkey: One Heart" was held on February 15, 9 days after the earthquake, with the organization of the Radio and Television Supreme Council (RTÜK) and the Presidency of Communications. A donation of 115 billion Turkish Liras, or 6 billion dollars, was collected in the program. It was said that these donations will be directed to the Disaster and Emergency Presidency (AFAD) and the Turkish Red Crescent, which work as the coordination board in times of natural disasters. As this is the case, individuals generally donate through programs according to their own economic power. A slightly different and economically confusing thing happened in the broadcast of “Turkey: One Heart”. When we look at the sequential size of the donations made to the donation program, we can easily understand what the problem is.In this program;- The Central Bank of the Republic of Turkey (CBRT) 30 Billion TL, i.e. 1.6 billion dollars- Ziraat Bank 20 billion TL, that is, 1.05 billion dollars- Vakıfbank 12 billion TL, 635 million dollars- Halkbank 7 billion TL, 370 million dollars- Savings Deposit Insurance Fund (TMSF) 2 billion TL, 106 million dollars- Borsa Istanbul 2 billion dollars, 106 million dollars- Turkey Insurance and Turkey Hayat Emeklilik 2 billion TL, i.e. 106 million dollarsEmlak Participation (a state bank engaged in Islamic banking) 2 billion TL, 106 million dollars- Ziraat Participation (Islamic banking subsidiary of Ziraat Bank) 1 billion TL or 53 million dollarsThe abovementioned institutions donated such amounts of money. Although all of the above-listed companies are joint stock companies, they are financial and insurance institutions controlled by the state. In addition, institutions such as Turkcell, Türk Telekom, and Turkish Airlines, which are open to the public but under the direct control of the government, also donated 7.5 billion TL or 400 million dollars. In fact, institutions such as the Presidency of Religious Affairs, RTÜK, Istanbul Police Department, Defense Industry Presidency, and ASELSAN, which are also directly public institutions and under the control of the government, also announced large donations. Thus, about 80 percent of the total amount collected in the donation campaign came directly from public institutions or institutions controlled by the government.The point that draws attention here is that almost all of these institutions are affiliated with the central budget; When they make a profit, they transfer to the Treasury, and when they make a loss, they receive support from the Treasury. In fact, at the beginning of the year, a total of 60 billion TL was transferred from the central budget to the abovementioned three public banks (Ziraat, Vakıfbank, Halkbank). Now, these banks have transferred more than half of this amount back to AFAD and Kızılay. We will learn about the nature of the donation made by the Central Bank only when it is recorded on the balance sheet. As it is known, Central Banks declare high profits due to transactions such as increasing the monetary base and lending to the public in difficult economic times, and this is, indeed, an undesirable situation. All these things brought the donation program to the discussion. The donation statements of these central budget-dependent institutions are actually equivalent to the contributions made from the central budget. However, since the changes made in the central budget should be made and supervised by the decisions taken in the Turkish Grand National Assembly, there are doubts that the government has organized this donation program to avoid parliamentary control.

Turkey was shaken by a great earthquake on the morning of 6 February. Before one realized what this earthquake was, the country was shaken by yet another earthquake at noon on the same day. We are trying to get rid of the consequences of all these shocks, thanks to the solidarity of people.

Earthquake and Public Donations (!)

Last week in Spektrum, we created a ‘recipe’ for the opposition's presidential candidate, which has become one of the hotly debated topics in the run-up to the June 2023 elections, based on the definitions of columnists and politicians. In this article, we will interpret the most discussed and anticipated potential candidates for the six-party opposition, under current circumstances.&nbsp;Since the six-party announced its alliance, various names have been mentioned as the presidential candidate of this group. While some of these names are political insiders, and former political figures, others are far from politics. Certain names are being evaluated and sometimes the public opinion is being measured by polling companies. So what are these names and what do the evaluations say?Kemal KılıçdaroğluCHP leader Kemal Kılıçdaroğlu is the most prominent name in the opposition alliance. Kılıçdaroğlu's candidacy is strongly supported by a certain group of people, while others are firmly against his candidacy.&nbsp;Supporters argue that Kılıçdaroğlu is the ‘legitimate candidate’ of the opposition because he brought the six-party together, his ‘March for Justice’ in 2017, and his success in metropolitans in the March 2019 elections. Those who claim that Kılıçdaroğlu's recent rhetoric against President Erdoğan and his statements in front of institutions such as TÜİK (Turkish Statistical Institute), CBRT (Central Bank of the Republic of Turkey), and MEB (Ministry of Public Education) have created the ‘right reactions’ suggest Kılıçdaroğlu is the most prominent name in the opposition.&nbsp;In his column titled ‘Why should Kemal Kılıçdaroğlu run?’ in Independent Turkish, Nevzat Çiçek writes that Kılıçdaroğlu's candidacy ‘is as halal as his mother's white milk’ (this idiom is used in Turkish to mean ‘to deserve more than enough). Çiçek answers the question of why Kılıçdaroğlu should run, with 17 arguments some of which are: ‘he uncovers confidence in society’, ‘he has won municipalities with the alliance he established’, ‘he does not impose himself as a candidate’, ‘he can break the prejudgement that a candidate cannot be elected because of their ethnic or religious identity’ and ‘he is sincere in making amends’.&nbsp;It is possible to say that the number of people who do not support Kılıçdaroğlu's candidacy surpasses those who do, for various reasons. Let us emphasise this. Some claim that the society will not accept ‘an Alevi president’. Kılıçdaroğlu's candidacy is ‘1-0’ behind because he has always lost to President Erdoğan so far. Some argue that it will lead to a backward start.&nbsp;Habertürk columnist Sevilay Yılman wrote in her July column that there is an ‘allergic reaction’ to Kılıçdaroğlu in society and she argued that not only for this reason but also because of the six-party panel, not everyone would support Kılıçdaroğlu's candidacy.What about the polls? According to the latest poll conducted by Yöneylem Research, 46.8% of the respondents answered ‘Kılıçdaroğlu’ and 40.6% answered ‘Erdoğan’ when asked, ‘Who would you vote for if the presidential election were to go to the second round?’. Mehmet Pösteki, General Manager of ORC Research Company, said that in a survey, which he said has not been published yet, there was a head-to-head situation of 38%-38% on the question ‘What would be your preference in a Kılıçdaroğlu-Erdoğan race?’.Editor's note: If CHP leader Kılıçdaroğlu officially announces his candidacy, the public's attitude towards the CHP leader may become more constructive as the uncertainty will end. Kılıçdaroğlu may be able to convince a certain segment of the public that he is ‘guiding’ the government with his six-party success, KYK (an institution that provides students with scholarships and loans) debts, and the EYT (retirement age victims) agenda; however, he should keep in mind that a significant proportion of citizens approach him with complete ‘antipathy’. Especially after Meral Akşener's speech called ‘I am a candidate for prime minister’, Kılıçdaroğlu is the most prominent candidate. On the other hand, keeping his candidacy on the agenda in such a topical way might prevent the main candidate from being worn down if he does not run.Ekrem ImamoğluFollowing Kılıçdaroğlu, another name that has been brought up again and again for ‘candidacy’ is Ekrem İmamoğlu, the mayor of Istanbul Metropolitan Municipality. İmamoğlu's candidacy is being discussed at least as much as Kılıçdaroğlu's. Even more than his candidacy, ‘why he cannot be a candidate’ is being discussed. Since last year, it has been rumoured that İmamoğlu had requested to run for the presidency, but Kılıçdaroğlu did not support him and warned him. So much so that it was even claimed that Imamoğlu and Kılıçdaroğlu have fallen out.However, especially in the recent period, İmamoğlu has been casting a shadow over the allegations with his statements that he ‘supports Kılıçdaroğlu's candidacy’ rather than his own. On the other hand, it is claimed that İmamoğlu is no longer waiting for a ‘candidacy’ but a ‘general presidency’. Hürriyet columnist Abdülkadir Selvi expresses these claims as follows:&nbsp;‘Ekrem İmamoğlu finally realised that he could not be a presidential candidate despite Kılıçdaroğlu. After that, he changed tactics. He preferred to act together with Kılıçdaroğlu rather than against Kılıçdaroğlu. From that moment on, the competition between Kılıçdaroğlu and İmamoğlu was replaced by cooperation. In Elazığ, he looked Kılıçdaroğlu in the face and said, ‘Today you are the main opposition leader, tomorrow you are the head of this country.’ He made this maneuver to support Kılıçdaroğlu in his presidential candidacy and to get his support in the CHP presidency. İmamoğlu is following the strategy of ‘take the presidential candidacy, give the CHP chairmanship.’What about the polls? In the above-mentioned survey conducted by Yöneylem Research, 50.1% of the respondents answered ‘İmamoğlu’ and 39.3% answered ‘Erdoğan’ to the question ‘Who would you vote for if the presidential election were to go to the second round?’ in which Erdoğan and İmamoğlu were compared.Mansur YavaşMansur Yavaş, the mayor of Ankara, has been considered a potential presidential candidate since his first year in office. Although it was rumored that Yavaş did not want to ‘run’ and wanted to continue with the municipality, the allegations never stopped. Even the leader of the Zafer Party, Ümit Özdağ, stated that his candidate was Yavaş, while Yavaş stated that he would ‘continue as a civil servant’. It is known that a certain group in the İYİ Party supports Yavaş due to his nationalist roots.&nbsp;Although Yavaş is portrayed as the ‘ideal candidate’ by many, due to his success in local politics, his distance from the political agenda, and his lack of involvement in polemics, the HDP wing also states that they will never support Yavaş due to his nationalist origin. From this point of view, if he becomes the candidate of the six-party, Yavaş is expected to convince the MHP base and swing voters while losing the support of Kurdish voters.&nbsp;On the other hand, according to a recent report in the Milli Gazete, Yavaş will only accept the nomination if Kılıçdaroğlu offers it to him. Journalist Fehmi Koru said about Yavaş's candidacy: ‘Yes, I think that Meral Akşener is the party leader who played her hand the best at the 'six-party alliance’ and Mansur Yavaş is her candidate.'What about the polls? Most opinion polls show that Yavaş is the only candidate with a clear lead over Erdoğan. In the above-mentioned survey conducted by Yöneylem, 57.3% of the respondents answered ‘Yavaş’ and 34.2% answered ‘Erdoğan’ to the question ‘Who would you vote for if the presidential election went to the second round?’ in which Erdoğan and Yavaş were compared. In this survey of Yöneylem, Yavaş is the name that defeats Erdoğan by a significant margin.&nbsp;Editor's note: Mansur Yavaş has attracted Turkey's attention especially due to his success in local governance. At the same time, he has always stayed away from the political agenda. İmamoğlu, on the other hand, had a say in the administration despite the AKP's majority in the municipal council but remained at the centre of political issues and debates. Therefore, a comparison of these two candidates reveals why Yavaş has relatively more supporters. Although it has been speculated that Yavaş's political messages will decrease his vote rate, the public is now expecting a ‘service-oriented approach away from controversy’. On the other hand, we should bear in mind that in the unlikely event that the six-party bloc wins the elections and a strengthened parliamentary system is chosen as the form of government, the president will only be in power for seven years. After seven years of governance, the president will disappear from politics. Imamoğlu and Yavaş are two names that will not want to leave politics yet.Abdullah GülSince the six-party alliance was formed, it has been rumored that 11th President Abdullah Gül would be a joint candidate. Sabah columnist Mahmut Övür wrote in August about Gül's candidacy, which has been on the agenda from time to time like other names, ‘It seems that Gül is planning to run again. Although many people say, ‘The CHP will not accept Gül's candidacy when they are so prepared for Kılıçdaroğlu's candidacy,’ there is not much they can do once the decision comes off the table. There are also speculations of a person who is shuttling between Gül and Kılıçdaroğlu on this issue: Former minister Ertuğrul Günay. It is rumoured that a team including Günay is doing serious PR work for Gül to become a presidential candidate.’On the other hand, Fehmi Koru said, ’As far as I can see, I am the only one who has mentioned Abdullah Gül's name as a presidential candidate. However, I have not written and expressed my opinion with the certainty that 'Abdullah Gül should be the presidential candidate.' What I am saying is that if the opposition wants to win, they have to call the election with a candidate like Abdullah Gül.’&nbsp;Haşim KılıçIt was claimed that former Constitutional Court President Haşim Kılıç would also be a candidate for the People's Alliance. Kılıç responded to these allegations by saying, ‘I don't know on what basis such an allegation was made’. It would not be wrong to assess that the nomination of a name so distant from society would create a second ‘Ekmeleddin İhsanoğlu’ case.&nbsp;Özgür DemirtaşÖzgür Demirtaş was also one of the periodic claims. The claim of an economist for the presidential candidacy had a shock effect on public opinion. Demirtaş's statement ‘We made a primary decision in the family. We will not say anything politically.’ was interpreted as a kind of confirmation of this claim.&nbsp;Or is someone completely different?&nbsp;Besides all these names, the election is still nine months away. Perhaps the six-party alliance will come up with a completely different name. However, it is crucial to keep in mind that it is critical that the candidate is known and liked by the public. In addition, the table of six should not forget that they are running to ‘win’. Possibly putting forward separate candidates could divide the voting unity and make Erdoğan lose the election, while the idea of ‘let's put our candidates, and carry on with whoever makes it to the second round’ could create a door for Erdoğan to show his strength in the first round.

Spektrum

Who is the right candidate? #2 Names and possibilities

<a fr-original-style="" href="https://www.linkedin.com/in/av-muhammed-kerem-%C5%9Fenol-ll-m-160a82b0/" rel="noopener noreferrer" style="color: rgb(9, 9, 9); text-decoration: none; background-color: transparent; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">Muhammed Kerem Şenol</a>*The Istanbul Finance Center (IFC) stands out as the most significant project of recent years when considering the innovations it brings and the gains it targets.The Istanbul Finance Center Law No. 7412, which officially establishes the IFC and regulates the tax exemptions, exceptions, discounts, and incentives for the activities to be carried out in the IFC, was published in the Official Gazette on 28 June 2022 and entered into force.<h2 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">What is Turkey aiming for?</h2>The Law aims to increase Turkey's financial competitiveness in the international arena, strengthen the global integration of finance and capital markets, and make Istanbul one of the global financial centers by taking advantage of its geostrategic position.<h2 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">What is in the IFM? Who will operate?</h2>IFC has 1.4 million square meters of office space, 100 thousand square meters of a shopping center, a conference center with a capacity of 2.100 people, a hotel, and a parking lot with a 26 thousand vehicle capacity. Thus, IFC is a gigantic ecosystem that will be managed with a smart city model, established with the motto of meeting all the needs of the business world.For now, institutions and organizations such as the Central Bank of the Republic of Turkey (CBRT), the Banking Regulation and Supervision Agency (BRSA), the Capital Markets Board (CMB), Borsa Istanbul, Ziraat Bank, Halkbank, Vakıfbank, Türkiye Sigorta, and İŞ GYO will move their operations to the IFM. But it's known that the IFC is closely followed by domestic and foreign organizations that want to benefit from the advantages brought by the Law.<h2 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Innovations brought by the IFC</h2>With the IFC, the Presidential Finance Officer (CFO) has expected to become even more prominent, as it is necessary to obtain a participant certificate from the CFO to operate in the office space of the IFC and benefit from the advantages brought by the Law.Institutions and organizations that qualify to operate in the IFC by obtaining a participant certificate can benefit from various exemptions, employment advantages, and incentives, including discounted corporate tax, fee, and tax exemptions.Participants can also freely choose the law in all kinds of transactions and contracts subject to private law, provided that they fulfill the conditions required by the Law. In addition, the participants are relieved from the burden of making all kinds of transactions, agreements, contracts, and communications between themselves and within the scope of the activities they carry out in the IFC in Turkish.There is another new concept that will enter our lives with the Law: One Stop Office. Designed as an office where representatives from all relevant institutions will be present, the One-Stop Bureau aims to enable participants to apply for permits, licenses and similar approvals for their activities from a single center and quickly.<h2 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">There is only one question in mind: What if it works?</h2>IFC was criticized for its alleged cost of more than USD 3 billion. But those who believe in the project argue that the IFC will soon become one of the world's largest financial centers.Whatever the case, it is necessary to get rid of the illusion that "Turkey cannot do it," to believe in Turkey's potential, work in line with this potential and understand the global trend.It is difficult to predict the fate of the IFC, which is planned to become operational in the coming days. But it is expected to contribute to the variation of world financial centers and be an alternative stop for the capital fleeing from the one-sided justice of the pragmatist West which has almost collapsed the assets of Russian oligarchs on the grounds of security concerns but make alliance with the Saudis by turning a blind eye to their disclosed and proven lawlessness.*Lawyer

Central Bank of the Republic of Turkey ile ilgili hikayeler