ECONOMY

Ankara fumes over PM’s plan to move central bank to Istanbul

ANKARA – Prime Minister Recep Tayyip Erdogan’s plans to move Turkey’s central bank to Istanbul are costly, ill-conceived and could even undermine the secular republic, say businessmen and opposition politicians in the capital Ankara. Announcing the move last week, Erdogan said it would bolster Istanbul as a major international financial hub. He has not said when the plan, which also envisages moving state banks Vakif, Ziraat and Halk to Istanbul, will be implemented. A proud son of Istanbul, Turkey’s most dynamic city, Erdogan has never hidden his dislike of staid, bureaucratic Ankara. But he faces stiff resistance from an old Ankara elite already deeply distrustful of his Islamist roots and populist style. «Istanbul has enough people; it is already full. The prime minister has said in the past that, to stop migration into Istanbul, Turks should require a visa to go there. Now he wants to force 50,000 people to move there who may not even want to go,» said Sinan Aygun, head of the Ankara Chamber of Commerce. Istanbul, which straddles Europe and Asia and produces at least 20 percent of Turkey’s wealth, has for decades lured Turks in search of jobs. But chronic congestion and high prices blight living conditions for many of its 15 million inhabitants. Although the government says moving the central bank will lure more foreign investment into Turkey’s fast-growing economy, economists fear it will also waste government time and money. «This is a political decision. I see no economic rationale behind this… The central bank should be independent, and if its employees want to stay in Ankara their decision should be respected,» said Gulay Elif Girgin, an economist at Oyak Investment in Istanbul. «There are other issues which are much more urgent, such as social security reform that need the government’s attention.» One banker, speaking on condition of anonymity, said the decision could hurt Turkish financial markets if the central bank governor, Durmus Yilmaz, resigned over the issue. Yilmaz has already come out publicly against the move to Istanbul. Tale of two cities Istanbul is home to Turkey’s biggest companies and banks. The former Ottoman capital also boasts palaces and mosques that attract millions of tourists every year. But for Turks, Ankara is bound up with the memory of Mustafa Kemal Ataturk, revered founder of the modern republic who moved the capital from Istanbul to what was then a sleepy market town in the central Anatolian steppe because it was easier to defend. Since the 1920s, Ankara has ballooned into a modern metropolis of 4 million people. It is home to the president, parliament, government ministries, the powerful military General Staff, foreign embassies and Ataturk’s mausoleum. «The government’s decision reveals its intention to reduce the role of Turkey’s capital city Ankara… and to erode the basic principles of the constitution,» said Onur Oymen, a senior politician in the main opposition Republican People’s Party (CHP). The staunchly secular CHP, along with the rest of an Ankara elite that includes army generals and judges, believe Erdogan’s Justice and Development Party (AKP) is bent on ending Ataturk’s separation of state and religion, a claim Erdogan denies. «Perhaps deep down Erdogan aspires to some kind of Ottoman restoration… He now has an office in the Dolmabahce Palace (in Istanbul) where he likes to work. But he should work in Ankara, which is the capital city.» The AKP, which has a big majority in parliament and controls Ankara’s city council as well as Istanbul’s, dismisses such criticism as sour grapes. (Reuters)