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Ed Webb

Turkey's defense industry sees rise of 'the president's men' - 0 views

www.al-monitor.com/...efense-industry-escalates.html

Turkey Qatar military-industrial_complex military corruption Erdogan

shared by Ed Webb on 23 Nov 19 - Cached
  • The authoritarian normalization that continues to mark relations between Turkey’s political and military echelons since the 2016 failed coup is now affecting the policymaking process in the country's defense industry. The industry is the new favorite of President Recep Tayyip Erdogan, as the bruising financial crisis heavily hit his former favorite sector, construction.
  • Four major reasons are behind Erdogan's piqued interest in the defense industry: First, Erdogan's popular support drastically increased after Turkey’s Oct. 9 incursion into Syria, known as Operation Peace Spring. Second, the defense industry is a good tool for producing success stories to divert public attention at a time of economic crisis. Third, success in the defense realm offers political gains in foreign policy. And finally, it creates profitable export opportunities to several countries including Qatar, Pakistan, Ukraine, Uzbekistan and some African nations.
  • In December 2017, Erdogan issued a decree placing TSKGV under his auspices. Since then, however, Erdogan hasn’t quite managed to establish full control over the institution, which mainly remains under the influence of the retired generals.
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  • The third sector — the new rising stars of the defense industry — are led by the president's men. They and their companies are tied to Erdogan: Baykar Makina, owned by the family of Erdogan’s son-in-law, Selcuk Bayraktar; BMC, owned by the Ozturk family and Ethem Sancak, a member of Erdogan's Justice and Development Party (AKP) and its Executive Council; and the Tumosan unit of Albayrak Group.
  • BMC is the leading producer of buses, trucks, rail systems, Kirpi armored vehicles and Amazon mine-resistant ambush protected (MRAP) vehicles. The ambitious joint venture aspires to become Turkey’s monopoly over diesel engine production for land vehicles and jet engines. Sancak holds 25% of the venture's shares, the Ozturks hold 25.1%, and the remaining 49.9% is owned by the Qatar Armed Forces Industry Committee.
  • In 2018, BMC became Turkey's first private defense industry company to reach the Defense News “Top 100 List,” ranking No. 85, with $554.18 million in defense revenues.
  • In early 2019, Erdogan offered generous incentives to BMC, such as the opportunity to lease Turkey’s largest tank maintenance factory to produce the indigenous Altay main battle tank under a 25-year contract for only $50 million. This transfer of a tank factory in Sakarya province to BMC is still highly controversial in Turkey, with the main opposition party criticizing it at nationwide rallies because of transparency and accountability issues. Also, factory workers organized several protests against the decision.
  • a big cooperative deal in the defense industry helps strengthen Qatar’s ties with Turkey, guarantees Turkey's continued military-political shield against the Saudi-led bloc and blockade, and helps Doha diversify its defense sources.
  • BMC wants to penetrate jet engine production as well. After securing Erdogan's political backing, BMC’s TRMotor went to a joint venture with TAI to develop the jet engine for Turkey’s indigenous TFX aircraft project with the help of the UK’s Rolls-Royce. In March, however, Rolls-Royce​ announced it was withdrawing from TRMotor because of an irreconcilable difference over intellectual property caused by Qatar’s involvement with BMC.
  • BMC is trying to establish a monopoly in military diesel and jet engines, and also seeks to monopolize the raw material production field of boron mining it recently entered. 
  • Joint ventures are having a rough time. TSKGV, now under the jurisdiction of the presidential palace, is struggling to evade Erdogan’s attempts to take full charge. Meanwhile, Erdogan's favorites are rising quickly to the top.
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