President Recep Tayyip Erdogan has self-appointed himself chairman of Turkey’s sovereign wealth fund and got rid of all staff who had been in charge for more than two years of inaction.
Zafer Sonmez, head of the Malaysian government investment body Khazanah Nasional Bhd for Turkey and Africa, was named general manager. Treasury and Finance Minister Berat Albayrak, Erdogan’s son-in-law, will also serve on the board of directors, according to a decree published in the Official Gazette.
The reorganization comes two years after the fund was created to try to capitalize state assets and end market turmoil after a failed coup. But the fund’s objectives and strategy were never clearly defined, and the internal struggles led to the dismissal of its first top official after Erdogan publicly expressed his disappointment. The restructuring consolidates the president’s influence in another key financial institution in Turkey. Erdogan had promised in May to exert greater influence on economic policy after he was given greater executive powers after the June election.
The sovereign wealth fund has interests in assets such as Turkish Airlines, Turk Telekom, state lenders TC Ziraat Bankasi AS and Turkiye Halk Bankasi AS, state oil and pipeline companies, the national postal service, the stock exchange, the national lottery and the national rail network. Since its inception, officials have debated the fund’s objective, with some saying companies should be managed to add value in the manner of a traditional sovereign vehicle, while others have argued that their assets could be used to calm market turmoil. Others proposed a securitization of the assets and that the State take credit with that guarantee.
In the reorganization, Erdogan removed one of his own advisers, Yigit Bulut. The new board members include Rifat Hisarciklioglu, head of the Turkish chambers of commerce; Huseyin Aydin, director of the banking association and head of Ziraat; Arda Ermut, head of Turkey’s investment promotion and support agency; Erisah Arican, professor and member of the board of directors of Borsa Instanbul; and businessman Fuat Tosyali.