McKinsey blacklisted from ministerial consulting contracts in Turkey

12 October 2018 Authored by Consultancy-me.com

Turkish President Recep Tayyip Erdoğan has reacted to domestic political criticism by banning his ministers from contracting American management consulting giant McKinsey.

In the wake of recent criticism from Republican People’s Party (CHP) opposition leader Kemal Kilicdaroglu over the appointment of McKinsey by Turkey’s Finance Minister Berat Albayrak, Turkish President Recep Erdoğan has ordered a ministerial ban on any further engagement with the American consulting giant. Albayrak had sought support from McKinsey to implement a new economic programme following a period of local economic turbulence.

With Turkish-US diplomatic relations currently strained, including the imposition of reciprocal trade sanctions, the move from Erdoğan, despite the president and other figures in the ruling AK Party defending the deal with McKinsey, was designed to shut the gate on the potential for further political point-scoring. Earlier, Albayrak – who is also Erdoğan’s son-in-law – said that anyone who criticised Turkey for working with McKinsey was “either ignorant or a traitor”.

“This person (Kilicdaroglu) is trying to corner us by asking questions about a consultancy firm that has been paid in full to help our economic management,” Erdoğan is reported to have told members of his party. “In order to not give him that chance… I told all my ministers to no longer receive consultancy from them (McKinsey).” It remains unclear whether the original deal has been scrapped, yet an AK Party spokesperson later said it was not a government contract.McKinsey blacklisted from ministerial consulting contracts in TurkeyAccording to a report from Reuters, AK Party spokesperson Omer Celik told reporters at a party summit that the deal with McKinsey wasn’t an agreement between the Turkish government and US firm, but rather one arranged independently with certain ministries. Celik also however said that Erdoğan had instructed his party and ministers to engage local Turkish consulting firms in the future. Other global strategy and management firms with a presence in Turkey include BCG, Bain, A.T. Kearney and Roland Berger, as well as the consulting divisions of the Big Four.

The new ministerial direction hasn’t however satisfied Kilicdaroglu and other government critics, with Kilicdaroglu remaining on the attack. “I asked you 10 questions, told you to answer them. He read them but couldn’t handle it. He can’t answer and now he has been forced to cancel the deal,” Kilicdaroglu said in accusing Erdoğan of failing to reveal the details of the McKinsey contract, after initially accusing the government of favouring US firms during a period of diplomatic tension.

Originally, McKinsey, which has a long history in national economic restructurings throughout the Middle East, such as most recently for the government in Lebanon, was said to be tasked with evaluating the progress of Turkey towards its economic targets, yet after an earlier round of criticism – including complaints that the US firm would be privy to state secrets – the finance minister said in statement that McKinsey would provide international best-practice analysis only, and ‘have no executive function or authority.”

Founded in Istanbul in 1995, McKinsey's Turkey office has previously advised local government departments on a range of matters, such as on local banking system reforms, the restructuring of the energy and telecom sectors, and the overall privatisation agenda. In 2013, McKinsey was brought in by the Turkish Privatisation Administration to advise on minority state-owned Turkish Airlines’ operations and growth strategies, including potential privatisation measures.

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