Ankara, Turkey – The shock resignation of Turkish finance minister Berat Albayrak – who is also President Recep Tayyip Erdogan’s son-in-law and heir apparent – has seen rumours of palace intrigue reach fever pitch among the country’s political class.
Albayrak quit his role as Turkey’s economy tsar on Sunday evening in an Instagram message that left the world scrambling to understand the dynamics behind his sudden departure.
For more than 24 hours, there was no official confirmation of his resignation from Erdogan’s governing circle – which finally came in a six-paragraph message citing health reasons – left a vacuum in which rumours swirled.
A fake screengrab of a tweet from Albayrak claiming his social media accounts had been hacked and the closure of his Twitter account initially cast doubt on his resignation.
Adding to the confusion, all but one post on the finance ministry’s Twitter account since mid-September were also deleted.
Lacking official comment, pro-government TV channels and newspaper websites ignored the news until late on Monday evening when the presidential communications office issued a statement declaring the resignation had been accepted.
Made finance minister in 2018 after nearly three years as energy minister, Albayrak’s position at the heart of Erdogan’s circle compounded bewilderment about his decision to quit.
The 42-year-old was often front-and-centre of major political developments and many observers suggested he was being groomed to eventually replace Erdogan, although such plans were never officially mentioned.
He featured prominently when a significant discovery of Black Sea gas reserves was announced in August and was seen as a key figure in Ankara’s relationship with United States President Donald Trump’s administration, even though these fell outside his official duties.
Albayrak’s family ties also reinforced his position at the heart of government.
His father is a long-standing friend of the president and he married Erdogan’s daughter Esra in 2004. Further cementing the family’s political clout, his brother runs a string of pro-government media outlets.
Decision ‘made in haste’
Explanations of Albayrak’s decision to quit have centred on Saturday’s surprise dismissal of Murat Uysal as central bank governor after just 16 months in office.
Albayrak supported Uysal and was not consulted about his removal, according to one senior figure in Erdogan’s ruling Justice and Development Party (AK Party).
“The decision to sack Uysal seems to have pushed Mr Albayrak over the edge but there were other underlying issues, as well,” the source, who asked to remain anonymous, told Al Jazeera.
These issues included Albayrak’s handling of the struggling economy, which has been a focal point of criticism by Turkey’s opposition and international investors.
The Turkish lira has lost about a third of its value against the US dollar this year – making it the worst performer in emerging markets – although it bounced back slightly following the departures of Uysal and Albayrak.
Some analysts estimate Turkey has spent some $100bn of foreign exchange reserves defending the currency.
As the lira has weakened, it has stoked inflation, which currently stands at nearly 12 percent – a situation that angered many AK Party legislators, according to the party insider.
“There was a lot of discomfort in the party because high inflation was the main problem the people have complained about and Mr Albayrak was the focus of these complaints,” the source added.
Albayrak also faced a number of heavyweight rivals inside government, not least Interior Minister Suleyman Soylu and Defence Minister Hulusi Akar, according to Berk Esen, assistant professor of political science at Istanbul’s Sabanci University.
When Soylu resigned earlier this year, Erdogan rejected it and he remains in his post today.
On Saturday, presidential adviser Bulent Arinc, a veteran AK Party politician, appeared to criticise the handling of the economy in a TV interview, sparking rumours of a Cabinet reshuffle.
“Albayrak must have taken this decision in haste which means he’s either really stressed out or some kind of major disruption is going on within the government and he couldn’t take it,” Esen told Al Jazeera.
The Biden effect
Joe Biden’s victory in the US presidential election may also have weakened Albayrak’s position.
Trump has held off on imposing sanctions on Turkey for its purchase of Russian S-400 missile defence system, as well as reportedly seeking to intervene in the prosecution of Turkish state-run Halkbank in New York for allegedly breaching sanctions on Iran.
Albayrak’s close ties to Trump’s Middle East adviser Jared Kushner – another presidential son-in-law – also provided Erdogan with a backdoor to the US presidency, something that expired with Biden’s win.
“Now that Biden has been elected, there’s a clear sign that things will begin to change,” Esen said.
“That means the Halkbank case will be reopened, there could be sanctions related to the S-400s and obviously, these decisions will have a significant impact on how the financial markets react to Turkey.
“It’s partly related to that and partly to this game of musical chairs that the Turkish leadership is playing. It’s quite clear that Albayrak has been on the losing side for some time now because he hasn’t really managed the economy well. He had personal access to Erdogan, but that only takes you so far.”
Timothy Ash, emerging markets analysts at BlueBay Asset Management, told Al Jazeera that the replacements in the finance ministry and central bank were “capable AKP technocrats picking up the pieces from the fall of Albayrak”.
Turkey replaced Albayrak with former Deputy Prime Minister Lutfi Elvan as its treasury and finance minister. Naci Agbal, a former finance minister, is the newly installed central bank governor.
Both men have pledged to prioritise price stability in messages that have been welcomed by global markets.
However, Can Selcuki, general manager at Istanbul Economics Research, said the test of the economy’s new management would be whether they raise interest rates to tackle inflation, something staunchly opposed by Erdogan in recent years.
“I’m hesitant to expect a huge interest rate hike,” he said. “The new finance minister is a very competent guy but will he be able to perform his job independently?”
Ankara-based political analyst Ali Bakeer said Erdogan was forced to make changes to address the economic situation.
“The president had to do something to cut losses in the current situation,” he said. “That’s why he changed the head of the central bank and then the resignation of Albayrak came.”
However, having spent so much political capital on Albayrak, his departure in such dramatic circumstances could be the largest setback for Erdogan since losing major cities such as Istanbul and Ankara in last year’s local elections, observers noted.
“This is a very, very big loss for Erdogan,” Esen said.
“It may not be of the same magnitude as the March 2019 local elections, but after that this is the second biggest blow – more so in some ways that the failed coup d’etat in 2016.
“This is internal bleeding.”