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Gov’t says transfer of stakes to fund a measure against attacks on economy

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Justice and Development Party (AKP) government spokesperson and Deputy Prime Minister Numan Kurtulmuş has said the government’s recent move to transfer Treasury stakes to the newly established Wealth Fund is aimed at protecting Turkey from attacks on its economy.

According to a decree in the Official Gazette on Sunday, stakes belonging to the Turkish Treasury in a number of companies including Ziraat Bank, the Turkish Petroleum Corporation (TPAO), satellite network TÜRKSAT, the Petroleum Pipeline Corporation (BOTAŞ), Borsa İstanbul (BİST), Eti Mining, Çaykur and postal service PTT were transferred by Cabinet decision to the Wealth Fund. On Monday morning, it was announced that Treasury’s 49.12 percent stake in Turkish Airlines (THY) and 51.1 percent stake in Halkbank will also be transferred to the Wealth Fund, which was established last August to finance large infrastructure projects.

Speaking to reporters following a Cabinet meeting on Monday, Kurtulmuş said: “It’s a question of more effective management of big public companies. The state should be allowed to have powerful resources. A dynamic structure is being sought that will protect it against possible attacks on its economy. We are thinking of using [state] sources effectively, and this step has been taken for that purpose.”

CHP says transfers to lead to economic crisis

The main opposition Republican People’s Party (CHP) accused the government of squandering state resources through the transfer of the state stakes in a number of big companies to the Wealth Fund and warned that the move is likely to result in an economic crisis.

CHP deputy chairperson responsible for economic affairs and party spokesperson Selin Sayek Böke recalled on Monday that the contribution made by the companies transferred to the Wealth Fund to the Turkish economy was $5 billion in 2016 and asked the government how it will compensate for this loss to the state budget.

“Will you introduce more taxes, will you increase the amounts of fines or fees? Will you increase highway tolls? Will you increase state contributions to healthcare expenditures? If you are not going to increase taxes and not create revenue through increases in prices, will you then cause a budget deficit and drag the economy into collapse?” asked Böke.

She said the Wealth Fund is not only exempt from the monitoring of the Court of Accounts but is also exempt from public tender regulations, capital market control and civil servant regulation.

“This fund is one which will be managed completely arbitrarily,” added Böke.

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