Erdogan plans to reinstate former finance minister Mehmet Simsek

The draft election manifesto of Turkish President Tayyip Erdogan's AKP (Justice and Development Party) marks a return to a more orthodox, free-market economic policy as Erdogan plans to put former Finance Minister Mehmet Simsek back at the helm of the economy, a highly regarded name in international circles, Reuters reported Friday, citing four sources familiar with the matter.

According to the sources familiar with the draft, the AKP's manifesto for the upcoming election will make no reference to Ankara's more recent economic policies but instead to return to his party's prior, more orthodox approach.

"The approach to the economy is very similar to that of the 2002 AK Party election manifesto. In other words, the AK Party is returning to its origins," one government official said about the draft, adding that work on it had reached the final stage.

He said that its priorities included free market economy rules and practices parallel to those applied in the global economy, with "no sign of any kind of non-market practices."

The AKP declined to comment on the issue.

Simsek was not available for comment.

"A pivot back to orthodox economic policy would be welcomed by investors," said Blaise Antin, head of EM sovereign research at asset manager TCW in Los Angeles.

"But foreign investors are likely to treat such news with extreme caution", he added, "given multiple past head-fakes by Turkish authorities and President Erdogan’s very public skepticism about conventional monetary policy and market-oriented economic policies more generally."

A senior AKP official said the manifesto made no reference to the new economy model but emphasized principles previously advocated by the AKP, such as fighting inflation, accountability in the public sector and transparency in tenders.

He said Erdogan's final approval of the manifesto would be required and so far he had not conveyed any dissenting opinion.

"If he does accept, it will eventually bring radical changes in both the cabinet and the management of the economy," he said.

Among Erdogan's goals was the appointment of Simsek.

"All Turkey knows Simsek's approach and success. If he takes office, a radical change is inevitable in economic policies, the bureaucracy and cabinet members to work in harmony with him," the AKP official said.

Another source with knowledge of the issue said that as well as the AKP, three parties from the main opposition alliance wanted to work with Simsek.

In 2012, when Simsek was actively involved in running the economy, the foreign share of the lira-denominated bond market peaked around 25%. It stood at 0.8% at end-January, Treasury data shows. Simsek was deputy prime minister until 2018.