Turkey sacks head of $40bn wealth fund af­ter slow start

Bangkok Post - - WORLD - ORHAN COSKUN

Turkey has dis­missed the head of its $40 bil­lion sovereign wealth fund, of­fi­cials said yes­ter­day, al­lud­ing to im­pa­tience on the part of Pres­i­dent Re­cep Tayyip Er­do­gan over a fail­ure to launch any ma­jor in­vest­ment projects a year af­ter its found­ing.

Mehmet Bostan was re­moved as chair­man of the fund on Thurs­day, a se­nior of­fi­cial said. The head of the Borsa Is­tan­bul stock ex­change, Him­met Karadag, has been named as act­ing chair­man, the of­fi­cial added, de­clin­ing to be iden­ti­fied be­cause of the sen­si­tiv­ity of the is­sue.

The fund had so far not shown the “per­for­mance ex­pected by the pub­lic”, the of­fi­cial said, with­out elab­o­rat­ing. Reuters was not im­me­di­ately able to reach Bostan or Karadag for com­ment.

The dis­missal was con­firmed by Er­do­gan ad­viser Hat­ice Kara­han, who told Bloomberg HT tele­vi­sion the fund had ex­pe­ri­enced “de­lays” in the last year, but com­mended Bostan for his ef­forts.

“There have been de­lays. We have in­for­ma­tion that there has been no progress,” she said.

The fund was set up last year by the gov­ern­ment to de­velop and in­crease the value of Turkey’s strate­gic as­sets and pro­vide re­sources for in­vest­ment. His­tor­i­cally, sovereign wealth funds have been set up with oil pro­duc­ers such as Nor­way or Gulf states, us­ing money from en­ergy ex­ports for in­vest­ment.

Bu t Tu rke y im­ports al­most all of its en­ergy and some econ­o­mists have said the gov­ern­ment could bet­ter spend money pay­ing down a na­tional debt that runs at roughly 30% of eco­nomic out­put.

The gov­ern­ment has trans­ferred stakes worth bil­lions of dol­lars of state as­sets, in­clud­ing stakes in flag car­rier Turk­ish Air­lines, ma­jor banks and fixed-line op­er­a­tor Turk Telekom.

The gov­ern­ment has said it wanted the fund to man­age $200 bil­lion in as­sets as soon as pos­si­ble. One se­nior of­fi­cial had said the fund could be used to se­cure fi­nanc­ing for ma­jor in­fra­struc­ture projects.

Rat­ings agency Stan­dard & Poor’s has said the fund was more akin to a na­tional de­vel­op­ment bank, with its de­sign sug­gest­ing an ef­fort to cre­ate a fund­ing ve­hi­cle by lever­ag­ing up as­sets.

Un­der Er­do­gan, who sup­ports us­ing large-scale projects to bol­ster the con­struc­tion in­dus­try and do­mes­tic de­mand, Turkey has built high-speed rail­ways, sus­pen­sion bridges and un­der­sea tun­nels. Other planned megapro­jects in­clude one of the world’s big­gest air­ports in Is­tan­bul and a huge canal that would ren­der a large chunk of the city an is­land.

Some an­a­lysts and op­po­si­tion politi­cians have ex­pressed con­cern the fund would lead to greater po­lit­i­cal con­trol over state as­sets and a de­crease in out­side over­sight.

Pres­i­dent Er­do­gan: Said to be im­pa­tient

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