Turkish president Erdogan appoints divisive aide as economic adviser

ANKARA Sat Aug 30, 2014 6:48am EDT

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ANKARA (Reuters) - Newly inaugurated Turkish president Tayyip Erdogan has appointed his close aide Yigit Bulut to be his chief economics adviser, his office said on Saturday, a move likely to alarm investors already concerned over the management of the country's finances.

Bulut, an influential but divisive figure, was a key voice in the ear of Erdogan when he was still prime minister. He appears to support his master on issues such as the existence of an "interest lobby", a shadowy group Erdogan has accused of trying to sabotage Turkey's economy through higher rates.

Bulut also made headlines earlier this year when he said that in the future Turkey would no longer need to maintain ties with Europe, and last year he accused anti-government protesters of trying to kill Erdogan through telekinesis.

Erdogan, who had held sway over politics as prime minister since 2003, was sworn in on Thursday as Turkey's first popularly-elected president, cementing his position as its most powerful leader of recent times.

He has made it clear he will wield far greater power than previous presidents, in a role that up until now has been largely ceremonial.

Although with Erdogan at the helm Turkey's economy has tripled in dollar terms, there have been signs in recent months of a slowdown, and some investors fear that fiscal policy is becoming increasingly politicized.

Markets were already showing signs of nerves on Friday amidst concerns of a possible turf war within the government over who will manage the economy.

The announcement of new Prime Minister Ahmet Davutoglu's cabinet saw the well respected team of Finance Minister Mehmet Simsek and Deputy Prime Minister Ali Babacan kept in place.

But the appointment of Numan Kurtulmus, deputy chairman in charge of economic affairs in the ruling AK Party, as a deputy premier alongside Babacan unnerved some analysts.

(Reporting by Orhan Coskun, writing by Jonny Hogg, editing by Rosalind Russell)

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