When Turkish President Recep Tayyip Erdogan appointed Cevdet Yilmaz as vice president in 2023, the former official’s eastern hometown of Bingör erupted in celebration. Revelers set off fireworks, beat drums and waved flags bearing the ruling party’s light bulb-shaped logo.
The fanfare comes as Yilmaz, a soft-spoken veteran of Erdogan’s Justice and Development Party (AKP), is one of Erdogan’s most trusted lieutenants and a key figure in Turkey’s sweeping economic reforms. It has shown rare prosperity in a long career that has been quietly established.
Former Merrill Lynch banker and Finance Minister Mehmet Simsek is being treated like a rock star on the international financial circuit as he tries to convince investors that President Erdogan has truly abandoned the policies that caused a protracted inflation crisis. is attracting a lot of attention from all over the world.
But Yilmaz, who held key government posts throughout more than two decades of presidential administrations, quietly played a central role in keeping the country’s axis on track, according to current and former officials, business executives and analysts. It is said that he has achieved this goal.
“Cevdet has communicated with the president, businessmen and the people, telling them that we are implementing the program and that the situation is under control,” said the former policy chief. “The president needs to hear from people he trusts about this program.”
“In the palace, Mr. Yilmaz is basically keeping the Şimşek plan on track,” said Emre Peker, European director at political risk consultancy Eurasia Group. He added that “Yilmaz is a very experienced person” and that “he has been in the AKP from the beginning and is trusted by President Erdoğan.”
Yilmaz was born in the hilly Bingol province in 1967 and served as director of EU relations in Erdoğan’s first government 21 years ago. Local media reported that when he was appointed minister of state in 2009, he was the first person from Bingol to hold such a high government position.
Yilmaz, who holds a master’s degree from the University of Denver and a doctorate from Bilkent University in Ankara, is also an AKP lawmaker and chaired the influential Planning and Budget Committee. He will become vice president after the general election in May 2023. President Erdoğan won the general election despite the most vigorous attempt by the Turkish opposition to unseat him in recent years.
Simsek is widely considered to be the architect of Turkey’s economic reforms, which began shortly after the 2023 elections amid growing concerns about the trajectory of the $1 trillion economy. But Turkish officials said Yilmaz was instrumental in persuading Erdoğan on economic policy issues that the president was unsure about.
He said Yilmaz acted as an advisor to domestic companies and listened to their complaints regarding new economic policies. Erdogan’s business allies, such as construction barons, have been the biggest beneficiaries of the president’s previous approach to boosting economic growth with ultra-low borrowing costs, and some are growing impatient with the new program.
“Mr. Şimşek knows the real economy well, but when it comes to talking to industry leaders, he’s not as good as Cevdet Yilmaz,” said Atila Yesilada, an Istanbul-based analyst at consultancy GlobalSource Partners.
Yilmaz is seen as a level-headed bureaucrat who adheres to traditional economic theory. While he supports a significant rise in the central bank’s borrowing costs, pushing interest rates up to 50% from 8.5% in June 2023, he says the government does not want to slow growth too aggressively. I warned you.
Yilmaz told the Financial Times in 2023: “We want more price stability and financial stability, but we also want to continue to have reasonable growth rates and employment because we are a developing country.” he said. He declined to be interviewed about this matter. article.
Despite growing public dissatisfaction with the economic situation, he repeatedly pledged full support for Mr. Şimşek’s plan.
“We may face temporary challenges while fighting inflation,” Yilmaz said in a recent speech to Turkish businessmen. “However, without containing inflation, neither achieving predictability nor reducing uncertainty will completely prevent those who take advantage of the foggy environment created by inflation to engage in opportunistic behavior. Don’t forget that you can’t.
President Erdogan has previously called high interest rates “the root and father of all evil” and has supported a tightening stance on monetary policy. But investors are wary of the president, who has in the past abruptly reversed course and fired central bank governors over rising borrowing costs.
Simsek resigned as deputy prime minister in 2018 when Erdogan appointed his son-in-law as finance minister, a sudden turmoil that deeply spooked foreign investors and caused the lira to plummet.
Analysts said Yilmaz’s presence on Turkey’s economic team is an important bulwark at a time when Erdogan remains surrounded by AKP members who believe in unorthodox policies. Turkish officials noted that Yilmaz’s long-standing relationship with the AKP facilitated policy coordination between government departments.
“Yilmaz’s coordination and sincere sense of responsibility for the economic program are very important,” said the Turkish lender’s chief executive.
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Yilmaz’s intervention comes as many Turks are growing weary of years of economic crisis. The government has previously sought to ease the pain with massive stimulus, especially in the run-up to the 2023 elections, helping Erdogan win but fueling inflation.
Government policies to cool demand, including increases in VAT and petrol taxes and the decision to raise the minimum wage by only 30% for 2025, have won praise from Wall Street banks, rating agencies and international bodies such as the European Union. I am doing it. and IMF.
However, they are also increasing pressure on household budgets. A poll conducted this summer by Ankara-based Metropol found fewer than one in five Turkish residents supported Mr. Şimşek. “No one trusts him,” one Ankara-based taxi driver told the FT.
This is where Yilmaz, one of the few people to have worked so long under a capricious president, could play a key role. But as economic pain among Turkish voters lingers, analysts warn that Erdogan’s patience with reforms is not limitless. “If you look at the people who followed Erdogan’s long march from exile to leadership, there are very few left,” Yesilada said.
