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IMF’s New Chief, New York Times and Turkey’s Crab Mentality

While Dominique Strauss-Kahn is waiting in jail, Treasury Secretary Geithner suggested DSK to step aside. There are a few leading candidates for this position. One of them is Turkey’s Kemal Dervis. He is the former head of United Nations Development Programme, and the Vice-President for Poverty Reduction and Economic Management at the World Bank. He is qualified for the position but his chances are really slim.

This didn’t stop the Turkey’s ruling party and its finance minister, Mehmet Simsek, from sabotaging Kemal Dervis’ slim chances of becoming IMF’s next president. This is the crab mentality at its rawest form. A decade ago Turkey got into a Greek-style budget deficit problem where almost everybody expected Turkey to default. Turkish Prime Minister asked Dervis to leave his post at the World Bank and help him with the budget and debt crisis. Dervis cut a deal with the IMF and went on to implement the plan. He was so successful that Turkey didn’t default on its debt and started to grow at a very healthy pace again. However, Erdogan’s AKP won the elections in 2002 and reaped all the benefits of Dervis’ hard work. Between 2002 and 2007, the Turkish economy grew by more than 7% annually, thanks to declining interest rates and the implementation of an IMF-backed programme that was struck by Dervis. Turkish economy went back to its mediocre performance after the IMF agreement ended in early 2008.

Erdogan’s AKP doesn’t have any credible alternatives in Turkey and they are expected to win the 2011 elections. However, they are worried that if Dervis becomes the next chief of the IMF, he will probably be an unbeatable candidate in 2015. That’s why they are trying to pull him down like crabs pulling down other crabs in a boiling pot. That’s why Mehmet Simsek, who was just a managing director at Merrill Lynch before he became Turkey’s finance minister and Erdogan’s puppet, announced his candidacy to run the IMF.

The New York Times didn’t waste this opportunity and made fun of Mehmet Simsek by saying “Among some potential candidates, modesty was not a characteristic widely on display.” The funny thing is Dani Rodrik, a Turkish economist at Harvard, published an article yesterday supporting Kemal Dervis’ candidacy. It’s well known that Rodrik doesn’t like the Erdogan government and he saw this as an opportunity to make a jab. Unfortunately Simsek announced his ridiculous candidacy to give the Germans and the French enough ammunition to shot Dervis’ slim chances down.

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