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Success eludes the victors

The AKP’s hefty majority in Turkey’s November elections looked promising but indecision has taken a hold on the new government, not least in its commitment to the discipline required by the IMF.

Abdullah Gul

TURKEY'S LIBERAL ISLAMIST government was only elected in November but it has already disappointed the markets because of its perceived lack of direction, coordination and skill.

Tayyip Erdogan's Justice and Development Party (AKP) won control of nearly 70% of the seats in the Meclis (national assembly) but has often behaved as if it were a novice coalition.

Matthew Vogel, head of emerging markets strategy at Barclays Capital Research, summed up the market verdict when he wrote that "across foreign and economic policy matters [the Turkish government has] been unable to provide clear answers on a number of critical issues. Lack of focus and coordination are [its] characteristics."

Vogel made this assessment in a report after a week-long visit to Turkey last month. "We arrived in Ankara with questions about the government's stance," he wrote, "and we left with the same ones."

The question is are these failings a temporary affliction or is this as good as the AKP government will get?

"I have never seen a new government run out of capital so quickly," says a European banker.

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