Erdogan names army chief as top general, extends control to Central Bank

Ankara: President Recep Tayyip Erdogan on Tuesday promoted Turkey’s army commander to overall armed forces chief in a radical military shake-up after the outgoing top general was given the post of defence minister.

Turkey’s new government announced late on Monday the appointment of former chief of staff General Hulusi Akar as defence minister, a rare transition from military ranks to the political realm. Erdogan then appointed ground forces commander General Yasar Guler as chief of staff by presidential decree published in the official gazette.

With more than 900,000 active personnel, Turkey has the second largest force in Nato after the United States which has almost 1.5 million.

 Apparently, he [Erdogan] does think that with his new powers he can best the markets.”

 - Atilla Yesilada | Economist at GlobalSource Partners 

The announcement comes as Nato meets in Brussels amid tensions over spending.

Erdogan was sworn in Monday for a second presidential term under a controversial new system that will centralise all institutions, including the army, under the presidency. Erdogan was granted sweeping powers in the new executive presidential system, meaning he can directly appoint top military figures.

Under the new decree, Erdogan will decide on the promotion of top army officers including colonels, brigadier generals, admirals and generals in the Turkish armed forces. The official appointment of the army officers usually takes place on August 30 every year. The term of duty for the top army general is four years.

Guler, 64, along with Akar and top commanders, had been abducted to a military base on the night of the 2016 coup.

According to the new decree, deputy chief of staff General Umit Dundar was appointed land forces commander. Dundar played a key role in thwarting the coup attempt. In a live statement to television channels on the night, he said: “That is a movement not supported by the Turkish armed forces.”

Erdogan also moved to cement his control over the economy, claiming the exclusive power to name central bank rate setters a day after naming his son-in-law to oversee economic policy.

The moves complete a years-long process that saw members of his investor-friendly A-team removed from the government one by one, increasingly rattling markets. After plunging on Monday by the most since a failed coup attempt two years ago, the Turkish lira pared its decline against the dollar so far this year to 19 per cent.

The 64-year-old Erdogan has repeatedly clashed with the central bank over borrowing costs that he is determined to keep low under almost all circumstances.

“I’d have expected Erdogan to have learned the bitter cost of messing with markets,” said Atilla Yesilada, economist at GlobalSource Partners in Istanbul. “Apparently, he does think that with his new powers he can best the markets.”

The decree, one of the first three after Turkey officially shifted its governance system to an executive presidency, was published in the Official Gazette. It didn’t include any reference to other members of the cabinet in appointing the central bank chief, who used to be named jointly by the president, prime minister and a deputy prime minister in a decree signed off by the entire cabinet.

That followed his appointment of Berat Al Bayrak, a former energy minister who entered parliament for the first time in 2015, to run a new ministry of treasury and finance, combining what used to be the two most powerful economic jobs. He’ll replace Mehmet Simsek, a former Merrill Lynch executive and the last man standing from a group of politicians who’ve been trusted by investors over the years to rein in the president’s go-for-growth instincts and keep Turkey’s $880 billion economy on a sustainable path.

Erdogan has, since defeating the coup bid, increased his influence over the armed forces, who had previously been seen as a parallel power structure that had repeatedly ousted governments.