Turkish Prime Minister Binali Yildirim sent a bill on creating a sovereign wealth fund to parliament after his cabinet’s approval, according to a copy of the draft obtained by Bloomberg on Aug. 2.
This was done to stabilize markets and fund infrastructure projects in the wake of a coup attempt.
The proposal allows the government to establish a wealth management company called Turkiye Varlik Yonetimi AS with a capital injection of 50 million liras ($17 million), to be financed from the state Privatization Fund. That company would create another entity, Turkiye Varlik Fonu, or Turkey Wealth Fund TVF, and other funds as it sees necessary, according to the draft.
The finances for the fund will be provided from the government’s asset sales program, cash surpluses from the state Privatization Fund and other state institutions, the draft said. Income from national and international capital markets and money markets can also be used to finance the fund, it said. Some assets from the government’s privatization program will be transferred to the fund’s portfolio, according to the draft.
The plans come as Turkey has been trying to reassure investors and calm markets after a military coup attempt in mid-July. Customs and Trade Minister Bulent Tufenkci said the economic damage from the attempt may be about 300 billion liras ($100 billion), according to Hurriyet newspaper.
On July 15 evening, Turkish authorities said a military coup attempt took place in the country. Meanwhile, a group of servicemen announced about transition of power to them.
However, the rebelling servicemen started to surrender July 16 and Turkish authorities said the coup attempt failed. Turkey’s President Recep Tayyip Erdogan said that the death toll as a result of the military coup attempt stood at 246 people excluding the coup plotters and over 2,000 people were wounded.
Erdogan declared a three-month state of emergency in Turkey on July 20.