New finance minister sparks debate about his credentials to steer Turkish economy

The overnight appointment of Nureddin Nebati, who does not have a degree in economics, as Turkey’s new finance minister has prompted discussions about his credentials to steer the country’s deteriorating economy amid a currency meltdown.

Turkish President Recep Tayyip Erdoğan early Thursday appointed Nebati, 57, who has a bachelor’s degree in public administration, a master’s in social sciences and a doctorate in political science and public administration, as minister of treasury and finance, after his predecessor submitted his resignation.

Nebati, who has served as deputy finance minister since 2018, was appointed to the post after he praised the president’s drive to bring down interest rates last week, saying Turkey had sought for years to implement a policy of low rates but had faced strong opposition.

“This time, we are determined to implement it,” he said in a series of tweets, adding that there was “no problem” with keeping interest rates low under current market conditions.

The newly appointed minister is also known to have close ties to Erdoğan’s son-in-law, Berat Albayrak, who held the same post from July 2018 until his surprise resignation in November 2020.

Albayrak has frequently been blamed for the deterioration of the Turkish economy, with a decline in the value of the Turkish lira, nearly 30 percent in 2020, leading to higher inflation via imports priced in hard currencies.

According to local media reports, Nebati had served as ruling Justice and Development Party (AKP) deputy for three consecutive terms between 2011 and 2018 and in 2014 wrote a doctoral thesis on the AKP’s view on democratic values.

The minister was also revealed by the Turkish media to be a member of pro-government foundations that include the Ensar Foundation, the Society for the Dissemination of Science and the Turkey Youth Foundation (TÜGVA), on whose advisory board Erdoğan’s son Bilal Erdoğan sits.

“Someone without an education in economics has become Turkey’s new finance minister. … This is what they call the ‘New Turkey!’ Zero merit [needed to be appointed as a minister], the only criterion is loyalty to a certain family…” journalist Sedef Kabaş tweeted on Thursday, referring to the president’s family.

Main opposition Republican People’s Party (CHP) lawmaker Deniz Yavuzyılmaz also brought a second salary received by Nebati to public notice on Thursday. The deputy stated in a tweet that Nebati had been receiving a second salary from Turkish telecommunications giant Türk Telekom, of which he is an administration board member.

“Nureddin Nebati, who was appointed minister of treasury and finance today, is the first minister to collect two salaries. A minister’s salary is TL 32,000 ($2,391) [and] the Türk Telekom administration board compensation plus six bonuses is TL 33,849 ($2,529). [His] total monthly income is TL 65,849 ($4,921),” the MP said.

Nationalist opposition İYİ (Good) Party parliamentary group deputy chairman Erhan Usta announced Nebati’s appointment on his Twitter account, describing the development as “another nail in the coffin of the Turkish economy.”

Erdoğan abruptly replaced his finance minister amid deepening rifts in the administration over aggressive interest-rate cuts that have undermined the currency and fueled inflation.

Under pressure from the president, Turkey’s officially independent central bank lowered its key interest rate in November, for the third time in less than two months, despite inflation approaching 20 percent – four times the government’s target.

Erdoğan believes that high interest rates cause high inflation, the exact opposite of conventional economic thinking, and has insisted he will keep rates low.

Turkey’s currency hit yet another record low of more than 14 to the dollar before recouping some losses on Wednesday after a central bank move to sell reserves. One dollar bought 13.22 lira as of Wednesday afternoon.

The recovery, however, was short-lived after Erdoğan appeared again to defend his “new economic model” against the “malice of interest.”

Erdoğan, who has blamed the lira’s troubles on foreigners sabotaging Turkey’s economy and on their supporters in the country, believes lower rates will fight inflation, boost economic growth, power exports and create jobs. The president has dismissed three central bank governors who opposed his “economic model” since 2019.