Another historic step was taken to economically integrate the Organization of Turkish States (OTS). The Turkish Investment Fund (TIF), of which Turkey, Azerbaijan, Kazakhstan, Uzbekistan, and Kyrgyzstan are members, was officially established. With Azerbaijan’s approval of the fund’s establishment yesterday; the establishment of the Istanbul-based TIF was approved by member countries and OTS management.
ERDOĞAN: THE FUND WILL SUPPORT INVESTMENTS, THE TURKISH WORLD WILL ECONOMICALLY INTEGRATE
President Recep Tayyip Erdoğan stated that one of the most important steps taken at the Organization of Turkish States Summit in March was the Turkish Investment Fund and gave the following information about this institution that Istanbul will host:
“We reviewed our cooperation in the economy, trade, transportation, and energy fields, which are the locomotives of integration in the Turkish world. The signing of the Turkish Investment Fund’s founding agreement has been one of the concrete gains of our summit.
Thanks to the fund, support will be provided for SMEs, development projects, transportation and logistics chains, infrastructure projects, investments in the fields of agriculture and tourism, and efforts in the field of renewable energy.
Access to financing for companies in all these areas will be facilitated, and intra-regional trade will also be encouraged. I believe that the Turkish Investment Fund will also contribute to economic integration in the Turkish world.
The fund, to be established based on the principle of equal capital contribution and equal voting rights, will be hosted by Istanbul. In this way, we have also ensured the strengthening of the central role Istanbul plays in the global finance community.”
IN THE COMING PROCESS, 4 MORE COUNTRIES WILL JOIN THE FUND
The capital of the Turkish Investment Fund was initially $500 million. In this fund, 5 countries are equal shareholders. In the upcoming period, 4 more countries will be added to the number of members of TIF, which was implemented with Turkey, Azerbaijan, Kazakhstan, Uzbekistan, and Kyrgyzstan.
THERE WILL BE A ROTATING PRESIDENCY SYSTEM
Kerim Ülker from Dünya newspaper reached the details of the establishment of the Turkish Investment Fund and gave the following information:
“According to the details we found in the decree draft prepared by the Kazakhstan Ministry of National Economy, the purpose of the fund is to encourage regional economic development, expand regional trade and support economic activity. The Turkish Investment Fund will be divided into 10,000 shares.
Each share will be worth $50,000. Each of the 5 member states will invest $100 million in the fund. After the agreement comes into effect, the founding countries will pay the first installment within 90 days. It is stated that this amount is $5 million per country. The remaining shares will be collected from the countries in 3 equal installments every year. The Turkish Investment Fund to be established in Istanbul will have a president, a CEO, a board of directors, and a council.
The president will be appointed on a rotating basis by the Board of Governors. The rotation process will be determined as 4 years. The fund will operate for 20 years from its establishment, and this period can be renewed. The Board of Governors will have the authority to periodically review the adequacy of the resources and decide to grow the fund.”
THE FOUNDATION WAS LAID AT THE SUMMIT IN SAMARKAND
So how will the Turkish Investment Fund work, and which sectors and projects will it focus on? Here the fund will have a process identical to that in a public or venture capital fund.
The Turkish Investment Fund, which will have the status of an international financial institution, will encourage projects to be carried out, support SMEs, invest in sectors such as transportation and logistics chains, storage and production facilities, modernization of digital infrastructure, development projects in areas of mutual interest, industrial production, infrastructure, transportation, agriculture, information and communication technologies, green economy and tourism.
The emergence of the Turkish Investment Fund dates back to last year. The presidents and leaders of the 5 member states in the fund had raised the issue of establishing the fund at the meeting of the Organization of Turkish States held in Samarkand on November 11, 2022. The Turkish Investment Fund will make the unity of the Turkish states, which has long been our dream, stronger.
ULTIMATE GOAL: JOINT TURKISH BANK
This structure, which will further increase the power of Turkish companies against the increasing power of Russia and China in Central Asia, may enable the establishment of a joint Turkish bank in the future.
This structure, which is very rare in the world, will strongly instill and reinforce the culture of doing business together in this geography, which speaks the same language and has the same history. Joint projects will be entered into in 3rd countries and different continents, and Turkey’s experience in this regard will be shared with the Turkish geography. This unity where economic links come together will turn into a strong chain
