Erdogan appoints Hafize Gaye Erkan as governor of Turkiye’s central bank

US-based Hafize Gaye Erkan, 41, is Turkiye’s fifth central bank chief in four years. (AP)
US-based Hafize Gaye Erkan, 41, is Turkiye’s fifth central bank chief in four years. (AP)
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Updated 09 June 2023
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Erdogan appoints Hafize Gaye Erkan as governor of Turkiye’s central bank

Erdogan appoints Hafize Gaye Erkan as governor of Turkiye’s central bank
  • Experts skeptical about whether appointment signals change of economic policy

ANKARA: As part of recently re-elected Turkish President Recep Tayyip Erdogan’s attempts to overhaul his economic team, the country’s central bank will be governed by a female executive for the first time.

US-based Hafize Gaye Erkan, 41, is Turkiye’s fifth central bank chief in four years, replacing Sahap Kavcioglu, who followed a policy of slashing interest rates despite rising inflation of around 40 percent. Kavcioglu has now been appointed head of the Banking Regulatory and Supervision Agency (BDDK).

Erdogan has always been opposed to interest rate hikes and has focused on economic growth, investment and exports.

Erkan was the first woman under the age of 40 to hold the title of president or CEO at one of America’s 100 largest banks. She has a doctorate in financial engineering from Princeton, and previously worked as First Republic’s co-chief executive officer. She abruptly resigned from that position in December 2021 before the bank was sold. She also worked at Goldman Sachs for almost a decade as a managing director, and was a director at Marsh McLennan. Last year, she was appointed CEO of the real estate finance and investment firm Greystone, a post she resigned in December.

Following her new appointment, there are now 23 female central bank governors around the world.

On Monday, Erkan reportedly met Turkiye’s newly appointed Treasury and Finance Minister, Mehmet Simsek, a former Merrill Lynch economist, in Ankara to discuss her new role.

Simsek told media on Wednesday that Turkiye would now return to economic “rationality” with a “credible program” to address the cost-of-living crisis. However, he also warned there would be “no shortcuts or quick fixes” and asked the public to be patient.

Brad W. Setser, senior fellow at the Washington-based Council on Foreign Relations, recently calculated that, apart from Turkey’s swap and deposit deals with foreign countries including Saudi Arabia, the central bank has only $30 billion in actual foreign reserves.

Economists believe that Erkan’s appointment may indicate that Turkiye will now follow orthodox economic policies, including interest rate hikes.

The new governor’s policy preferences are unclear, however, as she has previously worked only in the private sector. It also remains to be seen how much independence she will be granted, especially with local elections approaching. In March 2021, former central bank governor Naci Agbal was fired after just five months in the job after he decided to raise interest rates.

Erik Meyersson, chief emerging markets strategist at the European financial services group SEB, said the appointment of Erkan “provides valuable synergies” to Simsek’s attempts to shift policy.

“But, at the same time, the experience of Agbal — and the manner in which his efforts to push policy in a similar direction ended prematurely — does hang like a shadow over the current initiative,” he told Arab News. “The continued presence of Kavcioglu — a figurehead of the devastating policy mistakes of recent years — as head of the BDDK does not provide similar synergies and instead could be a sign of a limited commitment on behalf of Erdogan to the new policy direction.”

The retention of Kavcioglu, he added, “risks becoming an unwanted deadweight to what could otherwise have signaled fresh and significant policy momentum.”
According to Meyersson, one interpretation is that the old economic model that caused so much damage is “more dormant than dead” and is a reminder that “arbitrary rule implies arbitrary and often sudden changes.”

Meyersson believes that markets will likely look to test the extent of the new mandate from the presidential palace, and said that front-loaded rate hikes would be a good start.

“The gap between the policy rate and current inflation is minus 30 percent, and given the low credibility ascribed to the central bank, the real policy rate should increase toward positive territory soon. But that amount of policy tightening is unlikely to have been approved by President Erdogan, setting up Turkish financial markets for further volatility during the year,” he said.

The central bank’s monetary policy committee will have its first meeting under the new governor on June 22, and an increase in interest rates is expected.

Ehsan Khoman, head of emerging markets, ESG and commodities research at MUFG Bank in Dubai, said Erkan’s appointment, coupled with Simsek’s pledges to restore credibility, was a clear signal of a return toward rules-based monetary policymaking to re-anchor inflation expectations.

“Our base case is for a supersized rates hike from 8.5 percent to 20 percent on 22 June — with a likely pre-meeting statement to prepare markets for the start of the hiking cycle — to reach levels that imply positive real rates by year-end,” he told Arab News.

Critically, given Turkey’s past experience with relatively short-lived U-turns in policy regarding interest rates, Khoman said that (gaining) credibility will require patience, though these latest market-friendly appointments should rule out risks related to reliance on less-orthodox measures, including stricter regulations on foreign exchange transactions, to sustain acutely negative real rates.

Wolfango Piccoli, co-president of London-based Teneo Intelligence, thinks that “an outright and fast pivot toward a conventional policy set, especially in terms of monetary policy, remains unlikely.”

He told Arab News: “Erkan’s appointment seems designed to regain credibility in the eyes of foreign investors. But how she will adapt to Ankara’s working culture, where obedience matters, remains to be seen. Also, Erkan has no formal monetary policy experience.

“The appointments are important, but the next crucial step should be the decisions,” he continued.

He also noted that a shift towards orthodox economic policy requires the support of the banking regulator, which is now headed by a loyalist, suggesting a likely return to previous economic policies.

“Turkey’s domestic banks — private and state-owned — are under close political scrutiny and command,” he said.


Aswan governorate launches tourism app for ‘the best winter resort in the world’

Aswan governorate launches tourism app for ‘the best winter resort in the world’
Updated 9 sec ago
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Aswan governorate launches tourism app for ‘the best winter resort in the world’

Aswan governorate launches tourism app for ‘the best winter resort in the world’
  • Attia claimed that Aswan is “one of the best governorates in the field of tourism, and the best winter resort in the world”
  • The new app, he explained, allows tourists to access “all necessary information, such as tourist places, hotels, and hospitals”

CAIRO: The Egyptian Governorate of Aswan in Upper Egypt has rolled out a new app to serve tourists.
According to Aswan Gov. Major General Ashraf Attia, the application been well-received so far. “It has significantly contributed to facilitating (tourists’) trips, saving both time and effort,” he said in a video published by the Information and Decision Support Center of the Council of Ministers and on his official Facebook page.
Attia claimed that Aswan is “one of the best governorates in the field of tourism, and the best winter resort in the world.”
The new app, he explained, allows tourists to access “all necessary information, such as tourist places, hotels, and hospitals.”
He continued: “The reaction we have received from tourists who have downloaded the application has been overwhelmingly positive, particularly during meetings with tourists in floating or fixed hotels, or during tours. The program has achieved great success.”
Bassem Halaqa, the head of the Tourism Workers Syndicate, highlighted the assistance the application has provided to Russian tourists, who currently make up the majority of visitors to Egypt, saying it had “significantly eased navigation” around Aswan.
“It underscores the importance of Russian tourists in supporting and revitalizing the tourism sector due to the close geographical proximity between Russia and Egypt, the availability of economical flights, and balanced prices for the services they receive,” he said.
Halaqa noted that Russia is cold for most of the year, and Egypt serves as a “warm haven” for Russian tourists.
“They particularly enjoy Aswan and the beaches of the Red Sea in Hurghada or Sharm El-Sheikh,” he said. “Some (like) to take day trips to visit the antiquities in Aswan and Luxor or travel to Cairo and Giza.”
Halaqa said that proposals to allow closed residential buildings to be converted into hotels are currently under consideration at the Ministry of Tourism. The initiative will focus not only on luxury tourism, but on two- and three-star accommodation as well, he added.


US exhibit of sphinx with African features angers Egyptian experts

US exhibit of sphinx with African features angers Egyptian experts
Updated 7 min 6 sec ago
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US exhibit of sphinx with African features angers Egyptian experts

US exhibit of sphinx with African features angers Egyptian experts
  • An exhibition at the Leiden Museum in the Netherlands recently caused a stir by linking hip-hop music with pharaonic coffins and statues, aiming to show the influence of ancient Egypt on artists of African descent

CAIRO: A statue of a sphinx featuring a head with African characteristics has sparked anger in Egypt after it was placed on display at a leading US museum.

The installation, crafted by American artist and activist Lauren Halsey, is on show at the Metropolitan Museum in New York as part of an exhibit that opened in April 2023 and is due to close in October.

Leading Egyptian archaeologist Zahi Hawass described the sculpture as “a distortion of history and a complete falsification.”

“It is a shame that the museum, which is well-versed in the history of Egypt, allowed its trustees to carry out this farce,” he told Arab News.

Mahmoud Darwish, professor of archaeology at Minya University, said: “Unfortunately, there has been no move to address the controversy.”

The 36-year-old Halsey plans to display the artwork at various locations in the US, Darwish added.

Hussein Dakil, an archaeology expert, said the controversy raises questions about the “cloning” of ancient artifacts.

He said the practice violates Egyptian law, but cannot be enforced internationally.

However, Dakil said that international agreements such as the 1972 UNESCO World Heritage Convention could offer a framework for resolving such issues.

“Countries, including Egypt, can demand compliance with the UNESCO convention, offering a potential solution for removing and preventing such replicas,” he said.

This is not the first time that the intersection of contemporary culture and ancient Egyptian artifacts has raised eyebrows.

An exhibition at the Leiden Museum in the Netherlands recently caused a stir by linking hip-hop music with pharaonic coffins and statues, aiming to show the influence of ancient Egypt on artists of African descent.

Photos of Beyonce as Queen Nefertiti and a video of Rihanna dancing in front of the pyramids have also sparked a backlash.

The latest controversy comes on the heels of a Netflix documentary about Cleopatra featuring a dark-skinned actress in the title role.

The Egyptian Supreme Council of Antiquities condemned the casting, saying that Cleopatra was “light-skinned with Greek features,” and criticized the film as an attempt to endorse an “Afrocentric” perspective.

 

 


Lawsuit filed to halt Mubarak sons from contesting elections

Lawsuit filed to halt Mubarak sons from contesting elections
Updated 10 min 51 sec ago
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Lawsuit filed to halt Mubarak sons from contesting elections

Lawsuit filed to halt Mubarak sons from contesting elections
  • The lawsuit accuses them of illicit gains, and seeks the recovery of smuggled funds from across the world
  • Apart from preventing their candidacy, Ismail’s legal action calls for the recovery of funds that have allegedly been smuggled abroad

CAIRO: Abdel Salam Ibrahim Ismail, director of the National Center for Citizenship and Human Rights Support, has filed a lawsuit aimed at preventing Alaa and Gamal Mubarak, the sons of Egypt’s late President Hosni Mubarak, from running for any high-ranking office in the country.
The lawsuit accuses them of illicit gains, and seeks the recovery of smuggled funds from across the world.
Ismail said that he filed an urgent lawsuit in which he demanded the cancelation of the justice minister’s decision to refuse to open a probe against Mubarak’s sons, in accordance with Article 44 of Law 20 of 1977.
Apart from preventing their candidacy, Ismail’s legal action calls for the recovery of funds that have allegedly been smuggled abroad.
He said that these funds belong to the Egyptian people and should be reclaimed, whether they are in the form of real estate, liquid assets or deposits in Egyptian or foreign banks.
Ismail added that these funds should be handed over to the Ministry of Finance to contribute to the state’s general treasury.
He said his lawsuit is driven by a sense of responsibility toward safeguarding the Egyptian people’s money.
“This request of mine has nothing to do with the approaching presidential elections in 2024, but rather a citizen’s care for the Egyptian people’s money that was plundered by symbols of Mubarak’s state,” Ismail said.
However, Ammar Ali Hassan, a researcher in political sociology, raised doubts in a post on X, pointing out that neither Alaa nor Gamal Mubarak had applied for any political positions.
“What would happen if the court permitted them to run for office, potentially opening the door to their political participation,” he said.
The legal saga traces its roots back to May 2015 when an Egyptian court sentenced Mubarak and his sons to three years in prison.
They were also fined about 126 million Egyptian pounds ($4 million) and ordered to return about 21 million Egyptian pounds.
This ruling followed their conviction for embezzling public funds in the widely known “presidential palaces” case.
The court of cassation upheld the ruling, making it final in January 2016.
A legal expert, who chose anonymity, highlighted the complexities in the case.
He said Law 22 of 2014, enacted during the era of interim President Adly Mansour, stipulates that anyone running for the presidency must not have been convicted of a felony or a crime against honor or trust, even if their reputation has been restored. The interpretation of this law remains a point of contention among legal experts.


Turkish authorities warn unregistered Syrians to leave Istanbul

Turkish authorities warn unregistered Syrians to leave Istanbul
Updated 14 min 23 sec ago
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Turkish authorities warn unregistered Syrians to leave Istanbul

Turkish authorities warn unregistered Syrians to leave Istanbul
  • The government needs ‘new strategy because current harmonization plan not paying off,’ analyst says

ANKARA: Against a backdrop of increasing anti-migrant sentiment in Turkiye, the Ministry of Interior has instructed unregistered Syrian residents of Istanbul that, unless they leave the city by Sunday Sept. 24, they will face “severe sanctions.” Syrians who had previously registered in other Turkish provinces are required to return to their original places of registration.

In recent months, Turkish authorities have intensified their efforts to crack down on illegal migrants in Istanbul, which currently hosts more than 500,000 Syrian refugees, the most of any city in Turkiye. Many of the refugees were registered in locations outside of Istanbul, but came to the city in search of employment.

Syrians who fled the provinces in which they were registered after the devastating earthquake in February and were subsequently granted travel permits to Istanbul are exempt from the ministry’s orders.

Sinem Adar, an associate at the Center for Applied Turkey Studies in the German Institute for International and Security Affairs, noted that similar restrictive measures have been imposed in the past.

“In 2019, the Ministry of Interior told Syrian refugees who were not registered in Istanbul to return to the districts where they were initially registered,” she told Arab News. “The fact that a similar measure is now being implemented — four years later — is a sign that the earlier efforts were not successful.”

As of Sept. 14, Turkiye is home to approximately 3.2 million Syrians with temporary protection permits, down 19,100 from the previous month’s figures.

According to Adar, public pressure and its own policies mean Turkiye’s ruling government is keen to repatriate at least some of the Syrian refugees as soon as possible.

“Ankara has been trying to create a safe zone in Northern Syria,” Adar says, “while also attempting to foster a reconciliation with Bashar Assad.”

Turkish President Recep Erdogan promised ahead of elections back in May that he would repatriate a million Syrian refugees. He has also unveiled plans for the development of new residential, agricultural and industrial projects — financed by Qatar — in northwest Syria, where Turkish troops are stationed, to accommodate the resettlement of Syrian refugees from Turkiye over the next three years.

This initiative — dubbed “The Aleppo Model” — will also encourage businesses in Turkish provinces bordering Syria to engage in commercial activities within Syrian safe zones, thereby generating employment opportunities for local residents. However, progress remains sluggish due to the protracted reconciliation process between Ankara and Damascus.

“Unfortunately, a Syrian’s fate relies on procedural arbitrariness,” Omar Kadkoy, a migration policy analyst at Ankara-based think tank TEPAV, told Arab News. “The mere fact that a documented Syrian is present in a province other than that (in which they were initially registered) does not constitute sufficient grounds for deportation (in either) domestic or international law. The authorities, however, could arbitrarily link one’s presence outside the province of registration to other activities, like being a threat to the public, for which deportation could qualify as a legal procedure. So, an apprehended Syrian relies on luck instead of rule of law to appeal the decision.”

Official statistics show that around 554,000 Syrian refugees have returned to their homeland voluntarily, but Adar said it is difficult to discern whether they all truly chose to return, as there have been allegations of refugees being pressured to sign up for “voluntary” return, as well as reports of increased deportations. “Forced return cannot be excluded,” she said.

As many in Turkiye grow increasingly resentful of the large number of refugees in the country amid its ongoing economic crisis, Syrian refugees are once again being made scapegoats by nationalist campaigns ahead of local elections in March 2024. “Gitmeliler” (They Should Go) has been trending on social media site X.

According to analyst Kadkoy, this is a recurring theme. Similar events occurred before the local elections in 2019, he noted.

“The public are living through the effects of unorthodox monetary policy, the pandemic and the recent earthquake on the economy, and blame Syrians for the economic woes,” he said.

The government, in response, “tightens measures against Syrians as a quick relief. This is insufficient and unsustainable,” he continued.

“The local elections are six months away. We are likely to see similar measures in other provinces as well. These measures are short-term fixes.”

He said the government “must seriously discuss and work on a new strategy because the current harmonization plan is not paying off.”

The analyst added: “This is particularly important since the prospects of large-scale voluntary repatriation are rather low without political transition in Syria.”

Adar underscored the delicate balancing act the ruling Justice and Development Party faces as it attempts to address societal discontent by returning some refugees to Syria while maintaining harmonious relations with Turkiye’s Arab population.

Several Turkish journalists and a number of other citizens have been detained recently for their anti-refugee social media posts, accused of inciting hatred and hate speech. Three journalists were arrested on Saturday morning.

“Ramping up measures against Syrian refugees while simultaneously punishing anti-refugee views is a strategy aimed at appealing to various interests,” Adar said.

The recent serious assault of Kuwaiti tourist Mohammed Al-Ajmi in the northeastern city of Trabzon, which left him comatose with four broken teeth, was a reminder of rising anti-Arab sentiment in the country, stoked by the influx of Syrian refugees.

 

 


Somalia liberated over 45 percent of Al-Shabab-controlled areas in under a year: PM

Somalia liberated over 45 percent of Al-Shabab-controlled areas in under a year: PM
Updated 21 min 16 sec ago
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Somalia liberated over 45 percent of Al-Shabab-controlled areas in under a year: PM

Somalia liberated over 45 percent of Al-Shabab-controlled areas in under a year: PM
  • Hamza Abdi Barre calls for lifting of arms embargo ‘to combat terrorism more effectively’
  • Palestinians’ plight ‘continues to be a source of shame to us all,’ he tells UN General Assembly

NEW YORK: Somalia has managed in under a year to liberate more than 45 percent of the areas formerly held by the terrorist Al-Shabab group, Prime Minister Hamza Abdi Barre said on Saturday.
Addressing the 78th UN General Assembly, he called for “the complete and unconditional removal of the arms embargo” that has been imposed by the Security Council since 1992.
“Lifting this embargo would allow us to combat terrorism more effectively and build a peaceful and prosperous future for our people,” he said.
The arms embargo on Somalia has been the world’s “longest-lasting … widest and most comprehensive,” he added.
Barre said his country has “dealt with an iron fist with extremism,” employing a “successful campaign” encompassing military, financial and ideological measures.
He emphasized that Somalia today has “necessary administrative systems that are strict in controlling possession, use and storage of firearms.”
Somalia launched the first phase of its military offensive against the Al-Qaeda-linked Al-Shabab in August last year.
The second phase was announced last month, with the military collaborating with clan-based militias in central Somalia.
Barre stressed the need to establish a similar approach in dealing with terrorism worldwide. “We must guarantee the effective integration of local communities in a manner that protects their rights by offering justice and upholding the rule of law,” he said.
Citing recent extreme climate events and rising temperatures, Barre stressed the need for collective action to address climate change.
He said “it’s a great injustice for Somalia,” a nation that “had the least to do with carbon emissions globally,” to bear the brunt of the negative impact of climate change.
“In the past years, Somalia has been the victim of a vicious cycle of prolonged droughts and destructive floods that have killed thousands and displaced millions,” he added, urging the international community to support the country in tackling climate change.
“There’s no poorer country — compared to where it was in the 1960s — than Somalia,” he said. “Despite this, Somalia in the last decade has made tangible progress toward peace and stability. We’ve started to witness qualitative and tangible socioeconomic growth.”
Barre said his country looks forward to achieving social and economic progress free from security threats, calling for “an immediate and comprehensive cessation of violence and destruction.”
He said the plight of the Palestinians “continues to be a source of shame to us all.” Barre pledged continued solidarity with them, and called for the adoption of a two-state solution to the Israeli-Palestinian conflict along the pre-June 1967 borders.
Describing the world as “fragmented on one end and unequal on the other,” he called for reform of multilateral institutions such as the UN and development banks “because these establishments and their current structures are no longer fit for purpose.”