Economic Development Foundation Chairman Ayhan Zeytinoğlu made a statement with respect to the Turkish Sovereign Wealth Fund which had been established by law in August 2016 and became operational with the transfer of some public companies and property on 5 February 2017. IKV Chairman Zeytinoğlu indicated that Turkey is the only G20 country without a sovereign wealth fund and further expressed that such a fund would provide opportunities for Turkey’s development.

Moreover, Zeytinoğlu referred to the “Santiago Principles” which are organising at the international level the sovereign wealth funds. In that respect, he added the importance to take into consideration the criteria of good governance regarding the sovereign wealth funds enshrined in these principles. Zeytinoğlu was quoted as saying the following:

“When taking a closer look at the situation of sovereign wealth funds in the world, we can see that there has been a substantial increase in their creation on an annual basis especially since the 2000s. Since 2015, there is a total amount of approximately 7.1 trillion dollars within the scope of the sovereign wealth funds. These resources are used to fund a variety of investments, projects and financial operations both domestically and abroad. One can mention, as such, prominent sovereign wealth funds from Norway, Qatar, UAE, China, Kuwait and Singapore. Along with these funds, there are countries such as Ireland, Kazakhstan and Morocco which are transferring certain public resources such as revenues from privatisation to special funds with the objective of increasing long term investments and accelerating economic development and realising investments to strategically based companies and/or projects. As we can see from the abovementioned examples, Turkey’s approach to this issue is similar to the latter countries and that it is envisaging forging such a fund with the objective of further financing its own economic development”.

 “It is important to take into consideration the Santiago Principles regarding sovereign wealth funds”

IKV Chairman Zeytinoğlu indicated that an annual increase in GDP of 1.5% is expected in the next 10 years thanks to the creation of the sovereign wealth fund. Moreover, he underscored the need for such a fund to be governed with a market logic in order for it to be fully beneficial and provide benefits in terms of growth and development and in accordance with the principles of transparency and accountability. Within that framework, IKV Chairman Zeytinoğlu highlighted the importance of the Santiago Principles which are governing the international architecture of the sovereign wealth funds:

“If we are willing to see an annual increase by 1.5% in our growth rate the next 10 years as mentioned in the preamble to the law regarding the Turkish Sovereign Wealth Fund, it is of utmost importance that such a fund is governed effectively and in accordance with market principle, that the legal framework is well established and determined and that it pays special care to the principles of good governance. The Santiago Principles which had been determined within the framework of the “International Forum of Sovereign Wealth Funds” in 2009 are putting forth the standards of good governance with respect to the administration and auditing of the sovereign wealth funds. These principles which can also be described as the “certificate of good conduct” of the sovereign wealth funds include a total of 24 principles with respect to good governance, transparency, accountability, good practices and good procedures for healthy and long term investments. As such, we can say that the adoption of such principles is the best formula in order to erase doubts regarding these funds and provide for their effective and transparent management”.