Turkey’s Babacan Plans to Form Party to Challenge Erdogan's Rule

(Bloomberg) -- Turkey’s former economy czar Ali Babacan is planning to establish his own political party by the end of this year to challenge President Recep Tayyip Erdogan’s 16-year rule, a person close to Babacan said.

Babacan’s party is expected to include several former ministers and prominent economists who will work with him on formulating policies, the person said, speaking on condition of anonymity due to the sensitivity of the subject. A onetime Erdogan ally, he broke with the president’s ruling AK Party days after Erdogan sacked the central bank governor in July, and is likely to form his own faction in December, the person said.

Babacan, 52, presided over the boom times that tripled the size of Turkey’s economy following the financial crisis of 2001. He’ll be taking on his former boss at a time when the economy has been weakened by diplomatic rows with the U.S. and resistance is growing to Erdogan’s increasingly authoritarian rule. The president’s governing coalition won less than 50% of the votes in municipal elections earlier this year.

Babacan isn’t the only former ally who’s taking Erdogan on. Earlier this week, the president started the process to expel former AKP chairman and premier Ahmet Davutoglu, who has spoken out against his policies. On Wednesday, the president -- who himself rose to power through a splinter party he established in 2001 -- warned his ranks against “mischief makers.”

“If we keep our brotherhood strong, then seeds of unrest can’t grow,” Erdogan said in the central Anatolian city of Sivas. “Those who wanted to harm the AK Party for their own political ambitions and aspirations have always been disappointed.”

It isn’t clear whether Babacan and Davutoglu will join forces. For now, Babacan is cool to the idea, the person said.

--With assistance from Selcan Hacaoglu.

To contact the reporter on this story: Firat Kozok in Ankara at fkozok@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, Amy Teibel, Michael Gunn

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