Structure of state enterprises to be reformed

ANKARA

Treasury and Finance Minister Mehmet Şimşek announced that the first phase of the reform of state-owned enterprises (SOEs) based on transparency and in line with austerity measures has been completed.

Şimşek, who recently highlighted the need for savings in the public sector in his speech to governors, has provided important information on the need to reform SOEs.

Şimşek said the government had launched a two-pronged reform effort to increase transparency and accountability in the SOEs. Explaining that they have completed the first phase of the reform process, Şimşek emphasized that the work is in line with the austerity measures they have frequently expressed, saying, "Our stance on fiscal discipline is clear."

The minister stated that there are 19 SOEs under the control of the central government and provided information on the share of SOEs in the economy.

According to Şimşek, there are eight SOEs in the list of the 500 largest industrial companies published by the Istanbul Chamber of Industry (ISO). Noting that SOEs account for 7.4 percent of GDP and 24 percent of public investment, Mehmet Şimşek said 2 percent of public employment comes from SOEs.

Şimşek said that SOEs, which have an important place in the economy, especially in critical sectors such as energy, transportation and agriculture, are at the center of public financial management reforms. Stressing the importance of reforming SOEs, which account for 6.2 percent of the transfers to be made from the central government budget in 2024, Şimşek said they have included the study in the Medium-Term Program (MTP).

Noting that the current regulation does not fully comply with economic principles and therefore a new regulation is inevitable, Şimşek said the reform consists of two parts.

"We have completed the first phase of this reform, which we initiated to increase transparency and accountability in SOEs, and presented our work to the Economic Coordination Board [EKK]," the minister added.

Stressing that the boards of directors of SOEs will be made more professional, Şimşek pointed out that procurement procedures will be reorganized on the axis of corporate governance principles, efficiency and profitability. He added the study was conducted to ensure that SOEs comply with internationally recognized transparency standards and to strengthen their accountability.

"With this reform, we will bring our state-owned enterprises closer to world practices,” Şimşek noted.

“Our reform efforts are in line with our austerity measures. We are managing our expenditures efficiently. Our fiscal discipline will be strengthened by the efficient use of public resources. Our stance on fiscal discipline is clear. We are strengthening the harmony between monetary and fiscal policies. Our actions and decisions are reflected in the indicators. We have taken and will continue to take the necessary measures to prevent a permanent deterioration of the indicators,” he said.