Recently, Mr. Albayrak, Minister of Finance and Treasury in Turkey was giving a rosy speech about Turkey’s economic outlook. He discussed many issues that he predicts will happen in the couple of quarters. However, one part of his speech got my attention; incorporating a Turkish national credit agency similar to Fitch or Moodys, I guess. He vaguely elaborated on it as he rushed from one issue to another.
Now this sounds great, and would greatly benefit investors, companies and even the government. Also it would bring more transparency and constant independent audits plus many other benefits.
However, this concept is totally flawed in today’s Turkey because of the following weaknesses:
- Weak rule of law
- No check and balances (limited under a new presidential system)
- Limited democracy and human rights (Current trend)
- Lack of financial transparency (poor guidance)
- Lack of independence (e.g. CB or high court)
- Nepotism (Treasury and Finance Minister)
- Financial media under pressure (many investigations & allegations)
- Free market system needs to strengthened
Before Turkey can even think about an independent and fair credit rating agency, the above need to be addressed. Unfortunately, offering solutions to problems is considered against the state norms and could get you put in jail.
In conclusion, I really hope Turkey can adjust its policies and reverse many miscalculated decisions instead of constantly “blowing more smoke.” Moreover, once things get back in order, then investors will come back. Once this happens, Turkey will be a rising star.
In short, an objective Turkish national credit rating agency would be great!
