First step taken to establish Turkey Investment Fund

ANKARA - Anadolu Agency

AA photo

The first steps have been taken to establish an investment fund that will develop financing for Turkish small and medium scaled enterprises’ (SMEs) innovative initiatives on Feb. 15, during a joint meeting with the World Bank in Ankara. 

Deputy Prime Minister Mehmet Şimşek and Union of Chambers and Commodity Exchanges of Turkey’s (TOBB) head Rifat Hisarcıklıoğlu signed the protocol to launch the fund. 

“Turkey needs to establish a solid ecosystem to boost the digital economy. The Turkey Investment Fund will be a crucial constituent of this system,” said Şimşek. 

The initial volume of the fund will be 150 million Turkish Liras. Some 100 million liras of this will be offered by the TOBB and the remaining amount will be provided by the Treasury. The Turkey Investment Fund will invest in SMEs with the potential to develop innovative technologies, products and services that will create higher added value for the Turkish economy over the next decade. 

Şimşek also noted that the government will restructure the Turkish Development Bank in order to create new financing for innovative ideas and research and development (R&D) projects, adding that the new R&D draft regulation would likely be passed by parliament this week. 

Hisarcıklıoğlu said the new fund will create resources for venture capital funds that make initial investments in Turkish companies. 

“The Turkey Investment Fund is a new generation support model for innovative companies and the Internet economy in Turkey. We don’t want state bureaucrats to choose which enterprises will be funded. Instead, the public sector should use its resources to help develop the Internet ecosystem of the country. At the same time, venture capital funds should choose the right companies to invest in this ecosystem,” Hisarcıklıoğlu said, adding that the first steps to establish the fund were taken back in 2011. 

“Information matters a lot in today’s world … As private sector players, we are ready to do what it takes to enable the digital economy to develop and to maintain public confidence about the privacy of their personal data,” he stated. 

Johannes Zutt, the World Bank’s new Turkey country director, said information and telecommunications technologies were crucial to raising productivity. 

“Turkey became a middle-income country over a very short space of time. The country now faces some hurdles that need to be solved in order to become a member of the upper-income league,” Zutt noted. 

“The World Bank Development Report 2016: Digital Benefits,” which was launched in cooperation with the Economic Policy Research Foundation of Turkey (TEPAV), recommended two basic actions to make faster development possible in the new digital age. The report underlined the importance of making the Internet more universal, available at a lower cost, more open, and safer, in order to close the digital gap around the world. It also recommended several measures to increase the accountability of institutions, increase competitiveness, and increase the proportion of the qualified labor force.