The principle, of course, is to give the markets 48 hours to get used to the idea that the sky will not fall on their heads. Last Friday was a curious confirmation of that rule.The prime minister waited until dusk before drawing his knife to perform a much-expected political bloodletting. Not quite two years after a convincing general election win and just over one month after a solid but less impressive performance in nationwide local elections, Prime Minister Recep Tayyip Erdoğan announced a major Cabinet reshuffle. He changed the foreign minister and the minister in charge of the economy. He waved goodbye, in all, to eight of his colleagues. This includes the minister of justice, Mehmet Ali Şahin, who was deputy prime minister in the first Justice and Development Party (AK Party) Cabinet in 2002 and therefore in government longer that Mr. Erdoğan himself. The job of the new team will be to impress the electorate in time for a 2011 poll. To do that it needs to convince markets that Turkey has a credible strategy for dealing with the global economic uncertainties still ahead.
The overall sentiment is that Turkey has been coasting on the post-2001 economic reforms. The country's banking system remains relatively tidy after the great mopping up operation of that year, and despite steady growth up until last year, the Turkish consumer is under-borrowed. The banks don't hold that large of a mortgage portfolio, let alone a toxic one. At the same time, investors warn that the Treasury has been far too complacent in the face of evaporating export markets and dwindling capital flows. Outgoing ministers stand accused of being too weak to defend the cause of fiscal discipline and of entering into negotiations with the International Monetary Fund (IMF) that they do not have the political clout to conclude. By contrast, Ali Babacan's great accomplishment in the job to which he now returns was to implement an IMF agreement against pressures from the country and his own colleagues.
Mr. Babacan's departure has left a vacancy in the Foreign Ministry, which has been filled with the most eye-catching of Friday's reshuffle. The replacement, Ahmet Davutoğlu, is not an elected deputy and therefore not directly answerable to Parliament. However, Mr. Davutoğlu has been driving Turkish foreign policy from the back seat for several years, so it is only right that he is made accountable by being given the keys to the car. He is credited with broadening the focus of Turkish foreign policy -- or what he termed establishing "strategic depth." His critics see it as a dangerous meddling in the Pandora's box of regional conflicts and accuse him of reviving imperial ambitions -- a new Ottomanism, in which the republic attempts to exert an influence it cannot possess. The far more positive gloss is that Ankara is simply protecting its own interests by pacifying its region. The country has long likened itself to being the good citizen in a violent neighborhood, so that Mr. Davutoğlu's approach broadly makes sense. Better to seek out the roots of regional instability than stay inside and barricade the door.
The current conventional wisdom is that Mr. Davutoğlu will be viewed as an outsider not just by Parliament, but by his new ministry. Of all of the government departments, the Foreign Ministry is seen as the one most antithetical to the "lifestyle" core issues associated with the ruling AK Party. The prime minister mocked the Foreign Ministry esprit de corps when he disassociated himself from the foppish ambassadors who went around saying "mon cher." On that occasion, Mr. Davutoğlu stood up for hardworking diplomats -- an act of solidarity which they appreciated. They also respect their new boss for being on top of his brief. The painful truth is that many of them will not miss Mr. Babacan, whom they describe euphemistically as "brusque."
Mr. Davutoğlu is sometimes credited with having pioneered an alternative strategy to Turkey's EU accession, and there is a suspicion that his appointment will do little to inject new life into the talks. Still, optimists have located a silver lining. Mr. Babacan, who until recently was also Turkey's chief EU negotiator, had been constantly peering over the shoulder of his successor, Egemen Bağış. Mr. Davutoğlu will at least let Mr. Bağış get on with the job.
