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Turkey’s ruling party proposes granting state-run Wealth Fund unlimited borrowing authority

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Members of parliament from Turkey’s ruling Justice and Development Party (AKP) have submitted a bill exempting the country’s Wealth Fund from credit limitations governing borrowing, granting it unlimited borrowing authority, Deutsche Welle Turkish service reported on Tuesday.

If passed, the bill would also allow the bailout of the İstanbul Finance Center, a large construction project that was partially acquired by the Wealth Fund after it stalled due to financial problems.

Economists who spoke to DW pointed out that the bill is aimed at allowing unlimited borrowing opportunities for public-owned corporations, which borrow via the Treasury.

“If every entity borrows on its own terms, risk premiums will go up. I have difficulty understanding what is intended by this bill,” Nevzat Saygılıoğlu from Atılım University said. “This bill means we will leave the next generations only debt and no wealth.”

Over the past few years the Turkish government transferred to the Wealth Fund some of the country’s largest public-owned corporations such as Turkish Airlines, Ziraat Bank and the Post and Telegraph Directorate (PTT) in a move that sparked public debate.

Last year the fund borrowed some € 1 billion from foreign lenders.

The fund has also been the subject of criticism regarding its transparency as it is exempted from the scrutiny of the Court of Accounts, and no details of the fund’s borrowing activities are made public.

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