To Go Forward, Turkey Must Look Back

Source:Bloomberg Date:31Aug2018

Prof Daron Acemoglu hits a home run with his diagnosis of Turkey’s true malaise: How does Ankara get out of this mess? There has been no dearth of policy prescriptions. Some, like Paul Krugman, have recommended temporary capital controls and the repudiation of foreign-currency debt. Others are pointing to ways to shore up the corporate or the banking sector, by restructuring private-sector debt, tightening fiscal discipline and perhaps reaching out to the International Monetary Fund again. But what Turkey needs to do is both simpler and more difficult: Start reversing the downward slide of its institutions.