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Turkey’s Plan for Economy Is Seen as Tepid Response to Downturn

Category: Business,Finance

The plan presented Wednesday by Mr. Albayrak failed to address the problem that most bothers the Turkish business community: government agencies and courts that are increasingly tilted in favor of Mr. Erdogan’s loyalists, and opaque decision making.

“It’s not clear how administration is run, and who does what,” said Atilla Yesilada, Turkey analyst at GlobalSource Partners, a research firm. “Who makes policy is not clear at all. That’s what I hear time after time.”

During a 40-minute presentation in Istanbul before an audience of journalists, who were not given a chance to ask questions, Mr. Albayrak said that the government would increase taxes on the rich, cut taxes for corporations, encourage people to save and take measures to stabilize the country’s pension system by making it compulsory for all Turks.

He also said the government would create a “National Unity in Agriculture Project” to combat runaway food price inflation. But there were few details on how that and the other measures would work.

At least this latest economic plan landed with less of a thud than the last one. That program, presented by Mr. Albayrak in August, was regarded as so unconvincing by foreign investors that they dumped the lira and provoked a currency crisis. For a brief period, it took almost 7 lira to buy $1, a low. The lira was worth about $5.70 Wednesday, little changed from Tuesday.

The timing of the economic plan created a political quandary for Mr. Erdogan and his party. There was intense pressure for the government to regain international credibility by presenting a serious program.

But tough economic polices might further alienate voters and hurt Mr. Erdogan’s chances of retaining power in Istanbul by forcing a repeat election.

“For financial stability, more determined measures were expected,” said Bahadir Ozgur, an economic analyst and columnist for the online newspaper Gazete Duvar. “In this program, there is nothing curbing budget spending and disciplining public finance.”

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