Turkey - CBRT needs clarity, and quickly

It’s sad to see the CBRT engrossed in uncertainty about its leadership. It looks like Governor Hafize Gaye Erkan remains in place for the time being. 

Note the allegations made in recent days against her, and some of her family members, by clearly disgruntled former CBRT employees which appear serious. They have been denied by Governor Erkan. No word yet from the presidency or indeed by Mehmet Simsek, who leads the economy team.

The appointment of Erkan, the first women to head the CBRT, and with a young family, was a really great story for Turkey, and indeed for EM - that it is possible for a women with a young family to lead in such a high profile and intensive position. We need to be more flexible in work - life balance to ensure more women leaders in business, like Erkan, feel that they can make their valuable contributions to work without having to give up on family life. Woman bring so much more, different and very often much better - more sensible - perspectives, less ego more reality.

She had made excellent first steps in normalisation and adjustment in policy - building a very credible team around her, of like minded orthodox economic thinkers. The CBRT had again become an institution to which the best economic minds in Turkey wanted to join to help the policy adjustment as opposed to the brain drain and institutional erosion we have seen for much of the past decade.

The challenges facing the CBRT and the Turkish economy are huge, and this affair cannot distract from the huge effort required to ensure the right policy responses.

One would hope that the issues at the heart of the allegations are investigated quickly, and that there is a speedy resolution. Either the allegations are exposed as unfounded, or if there is some basis for complaint that action is taken to ensure that they cannot be repeated and that confidence then in the CBRT and the management team are restored. Remember here that the appointment of Erkan et al was as much about restoring confidence in the CBRT, which is critical to ensuring that the population believe the institution has the ability to deliver on its core mandate to bring inflation back to its 5% target. HR issues should not distract from this goal.