Turkey’s illiberal economic model will extend further

Significance

Erdogan spoke with pride of imposing additional customs duties to protect domestic industries, cheapening credit and launching a national car project. Economic policies are becoming less liberal, and more protectionist and interventionist.

Impacts

• Financial investors will increasingly regard investments in Turkey as speculative.
• Foreign direct investment will still be welcome, but investors may need to consider additional risks.
• Turkey is very unlikely to turn to the IMF and implement a liberal programme in a crisis, an option already rejected by Erdogan.