A NEW TOOL FOR ECONOMIC ALLIANCE IN THE TURKIC WORLD: TURKIC INVESTMENT FUND

The Turkic Investment Fund will act as a bridge in the political and economic integration of Türkiye with the continents of Asia, Africa, and Europe

Many development and investment banks were established to ensure regional development after the World Bank, which started to gain an important place in the global financial system after World War II and became the first development bank at the global level, and this process continues at full speed today. In this context, we can show the European Bank for Reconstruction and Development in Europe, the Asian Development Bank in Asia, and the African Development Bank in Africa as examples. Such institutions, on the one hand, provide the financing opportunities needed by development for regional development, on the other hand, contribute to the economic and financial integration of the lands they represent.

After becoming a member of the World Bank, Türkiye started to become a member of such regional development and investment banks and used significant financing from these banks. Moreover, the Black Sea Economic Cooperation, which includes the Black Sea Trade and Development Bank, was established under the leadership of Türkiye.

The increasing weight of Türkiye both in bilateral economic and political relations and in multilateral economic institutions draws attention in recent years. Having a share in global trade exceeding 1%, Türkiye also increases its political and economic integration with regions such as Africa and Asia, along with its relations with the European Union. Increasing the number of ambassadors in Africa from 12 to 44 in the last 20 years, strengthening its political and commercial relations with countries in the Asian continent with the Asia Anew Initiative and finally, its developing relations with the Middle East and Gulf countries in the near geography are significant cornerstones of Türkiye’s integration with the world as a whole.

The Organization of Turkic States and the Turkic Investment Fund, which was established within this organization, should be seen as a formation that complements Türkiye’s increasing weight in the global economic and political arena. Founded jointly by Turkey, Azerbaijan, Kazakhstan, Uzbekistan, and Kyrgyzstan, the Fund has the status of an international financial institution and will fill a significant gap for Istanbul Financial Centre to become a global financial centre, since centred in Istanbul.

One of the most important pillars of the ‘Belt and Road Project’, which was announced by China in Kazakhstan in 2013 for the first time and then gradually shaped its content and stakeholders, is the middle corridor. As a result of this project, which Türkiye also supports within the framework of the win-win principle, transportation opportunities are brought to the People’s Republic of China, via the sea and railway network, over Turkmenistan and Kazakhstan, via Central Asia, before Türkiye, to the Caucasus region, and then to the Caspian Sea. The Organization of Turkic States and the Turkic Investment Fund will play a vital role in the financing and implementation of this project, which will create an important cooperation corridor between Asia, Europe, and Africa.

In summary, the Turkic Investment Fund will act as a bridge in the political and economic integration of Türkiye with the continents of Asia, Africa, and Europe, and will also be crucial in achieving the goal of making Istanbul a regional and global financial centre since it is headquartered in Istanbul.

What areas should the Turkic Investment Fund focus on from now on?

The most crucial factor is that the Turkic Investment Fund creates a project portfolio in line with the current trends in global trade and investment while providing financing for the development necessary for the economic integration of the countries it is a member of, regionally and globally.

Even though it started with a small budget of USD 500 million, it is highly likely that this amount will increase in the future. Thus, it will be the key to regional development in the upcoming period, which is included in today’s trade and investment trends. In addition, transportation and other logistics projects, especially railway, seaway and ports, all kinds of projects required by green transformation, especially energy, and projects for the digitalization of SMEs and their integration into global trade supply chains will be able to be funded over the resources of the Turkic Investment Fund.

Agriculture is another sector that will play a crucial role in the development process of the region, depending on the security of the supply of food, which became more significant following the Russia-Ukraine war. In this context, the fund will also be supporting rural development.

Finally, at the global level, service trade rather than goods trade has begun to stand out. In the upcoming period, the role of the services sector in global growth and its share in global foreign trade is expected to increase. From this point of view, supporting service sectors such as education and health, especially tourism, should be among the priorities of the Fund.

Finally, the Fund should not only provide financial resources for development projects, but also play an active role in the economic and financial integration of the countries in the region with each other and with the global economic system, and should also play a supportive role in the harmonious implementation of the economic and financial policies to be implemented.

I sincerely believe that under the leadership of Türkiye, the Fund will make significant contributions to the economic development and global integration of the region within the Organization of the Turkic World.

• Director of Economic Research and Chief Economist at DEİK, Hakkı Karataş.