30 percent for minimum wage earners, 10-fold raise for Palace advisors! Here is the new salary advisors will receive

President Erdoğan appointed 140 members to 10 separate policy boards last week. Some names who were board members during the initial appointments in 2018, such as Orhan Gencebay and Yiğit Bulut, as well as presidential advisors, were once again assigned to the boards in the new appointments.

In the new regime transitioned to with the Presidential Government System (CHS), reducing the number of ministries and bureaucracy, accelerating management and decision-making processes, and moving public administration away from sluggishness were important claims. However, alongside 10 policy boards operating in areas similar to the 16 ministries, numerous special Presidential 'offices' with special budgets and legal personalities were established, ranging from investment and finance to digital transformation, and from human resources to cybersecurity.

There is a parallel bureaucracy to the ministries, duplication of duties, and institutional structuring with policy boards and special offices that have administrative and financial autonomy.

In addition to the policy boards, which reached a total of 10 with the recently established Agriculture and Food Policies Board, the number of members appointed to the boards rose to 140 last week, up from 76 in 2018. According to the circular of the Ministry of Treasury and Finance dated January 6, 2025, the civil servant monthly coefficient to be applied between January 1 and June 30, 2025, is 1.012556. As a result of multiplying this coefficient by 100,000, the lowest monthly salary to be paid to members appointed to policy boards is 101,255 TL, an increase of approximately 10-fold compared to 2018. The 140 appointed members will continue to receive the salaries and income they obtain from other institutions, universities, and companies.

THE BILL FOR THE MARCH 19 OPERATIONS IS MOUNTING!

According to the article by ANKA Economy Editor Zülfikar Doğan, the political-judicial dimension of the political operations initiated over Istanbul Metropolitan Municipality Mayor Ekrem İmamoğlu, and the protests that emerged in response, along with the mass detentions, arrests, and consecutive lawsuits, is increasingly taking a heavy toll on the economy.

Following the hot money flight that began after the March 19 operations and the subsequent sales in foreign portfolio investments, there was a foreign capital outflow reaching 4 billion dollars in one week. The dissolution in foreign portfolio investments and the hot money flight continued in the week of March 21-28, which followed the operations. According to Central Bank data, the market value of foreign investments in Turkish securities, stocks, Government Domestic Debt Securities (DİBS), and bonds decreased by 11 billion 756 million dollars in two weeks, falling to 45.6 billion dollars. The Central Bank's reserve loss in the two weeks following March 19 approached 43 billion dollars.

CRITICAL TURNING POINT FOR INTEREST RATES: APRIL 17

In addition to the costs in foreign exchange, currency, hot money, and foreign investments, another negative effect of the March 19 operations was reflected in interest rates. In the inflation-fighting program, which had been carried out by paying heavy prices with a high-interest policy for two years, a process of interest rate cuts had been initiated over the last 4 months. However, the shock wave of the March 19 operations in the markets forced the economic management to resort to the interest rate weapon once again.

The Monetary Policy Committee (PPK) meeting to be held this week on April 17 has become critical in terms of the message to be given to domestic and foreign markets. While the expectation of an interest rate cut in April was dominant before March 19, this expectation reversed after the operations. Therefore, the probability of the PPK cutting interest rates on April 17 is seen as low. The prominent expectation is that the policy rate will be kept constant at 42.5% and that interest rates will not be touched until the June meeting. The final option at hand is to implement a 100-150 basis point interest rate hike to overcome the atmosphere of political, legal, and economic distrust and the worsening expectations created after March 19. Şimşek and his team are at a very critical turning point in this regard.