Who really benefits from Turkey-Russia joint fund?
A Turkish construction company, which runs major operations in Russia and was the builder of Erdogan’s controversial palace, figures prominently in a deal to create a joint investment fund between the two countries.
Following President Recep Tayyip Erdogan’s March 10 visit to Moscow, which saw the signing of eight bilateral deals, Turkey’s top economic columnist Tevfik Gungor Uras penned an article headlined “We keep signing deals with Russia.” In a rather sarcastic tone, he listed an array of deals and protocols signed between the two countries in recent years, questioning how much progress was actually achieved on the ground.
According to analysts, the ruling Justice and Development Party (AKP) is scrambling for rapprochement and expanded ties with Russia as its international isolation deepens. This includes intensified efforts on military and diplomatic levels as well as in the economic field.
One of the new protocols with Moscow involves the establishment of a $1 billion joint wealth fund. To what extent it will materialize remains to be seen, but the plan has one truly intriguing aspect: financing Turkey’s Ronesans Holding. The company runs major construction operations in Russia and is also the builder of Erdogan’s lavish presidential palace, which the opposition says remains an illegal structure.
Turkey’s own sovereign wealth fund — widely seen as an attempt to create a parallel budget and provide lifesavers to pro-government businesspeople under financial strain — is still in the process of being shaped, but here it is already poised for another controversial venture. According to the deal, the joint fund between the Turkey Wealth Fund (TVF) and the Russian Direct Investment Fund (RDIF) would be created with contributions of up to $500 million by each side.
