Erdoğan says Turkish wealth fund to be reorganized after head dismissed

President Recep Tayyip Erdoğan said on Sept. 8 Turkey would reorganize its $40 billion sovereign wealth fund after dismissing the organization's chairman over its failure to meet targets since it was founded a year ago.

Mehmet Bostan was removed as chairman of the fund as of Sept. 7 and the head of the Borsa Istanbul stock exchange, Himmet Karadağ, was named as acting chairman, a senior official earlier told Reuters.

"The desired goals and progress were not achieved in the wealth fund," Erdoğan told reporters ahead of a foreign trip, as quoted by Reuters. 

"We need to reorganize the wealth fund and we will take that step after the Kazakhstan visit."

The president said he discussed the issue with Prime Minister Binali Yıldırım, who is responsible for the fund, and they "decided it could not go on this way."

The fund was set up last year by the government to develop and increase the value of Turkey's strategic assets and provide resources for investment. Historically, sovereign wealth funds have been set up with oil producers such as Norway or Gulf states, using money from energy exports for investment.

But Turkey imports almost all of its energy and some economists have said the government could better spend money paying down a national debt that runs at roughly 30 percent of economic output.

The government has transferred stakes worth billions of dollars of state assets, including stakes in flag carrier Turkish Airlines and fixed-line operator Türk Telekom.

Stakes in state-owned Ziraat Bank, the country's biggest lender, the Borsa Istanbul stock exchange and state-owned pipeline operator BOTAŞ have also been transferred, according to an announcement on the Official Gazette on Feb. 5.