ECONOMY er-national

Independent bodies in Turkey attached to ministries after new decree law

ISTANBUL - Hürriyet Daily News | 8/22/2011 12:00:00 AM |

Some 10 independent regulatory and supervisory authorities in Turkey will be under the supervision of respective ministers, following a recently approved decree law. Most of the bodies were established after the 2001 crisis to regulate and control financial and capital markets. Officials refused to comment on the changes

Legally independent bodies in Turkey have been taken under the supervision of the related ministers, both financially and administratively, following a new decree published in the Official Gazette on Aug. 17.

“The minister is authorized to supervise any kind of activity and operation of the dependent, relative and concerned establishments (including the bodies subject to the third chapter of Law No. 5018),” said the provision. The part in brackets implies that legally independent bodies were also taken under the supervision of the relevant ministries.

Law No. 5018 on “Public Financial Administration and Control,” published in 2003, defines the duties and responsibilities of 10 independent “regulatory and supervisory” bodies. The bodies include some financial institutions such as the capital markets and banking regulator authorities as well as media regulators.

The decree approved Wednesday defined the duties and responsibilities of the newly established European Union Ministry and thus redefined those of other ministries. The draft of the decree was prepared before the general elections on June 12, according to a recent report by daily Radikal. The administrative and financial autonomy of these bodies has thus been taken out their hands with the new decree.

“After the government took under its supervision the courts, universities and even the armed forces, there was no real need for [taking under control] these 10 independent regulatory and supervisory bodies,” veteran financial journalist Güngör Uras wrote in his Monday column in daily Milliyet.

Authorities in the independent bodies refused to comment on the new law and its implications for their institutions.

“We will not make any official statement on this issue,” press authorities of the Energy Markets Regulatory Board told the Hürriyet Daily News in a phone inquiry on Monday. Officials of the Capital Markets Board also refused to comment.

[HH]De facto relation

Meanwhile, a press representative from the Saving Deposits Insurance Fund told the Daily News they already had contacts with the ministry. “We will obey whatever the law says. There is already a regular de-facto relation with the ministry, we exchange views [with ministry officials],” he said.

The deputy prime minister and former economy minister Ali Babacan, signaled such changes months ago, Radikal reported. “The authorities of the Energy Market Regulatory Authority [or EMRA] and the Tobacco [Tobacco Products and Alcoholic Drinks Market Regulatory] Board might be reviewed. The limit has been overstepped. Some of their authorities must be transferred to the government. Many topics need political will. Certain issues, when becoming problematic, become a burden on the Energy Ministry. Thus, [the ministry] is exposed to unjust criticism,” Babacan said a couple of months before the general election.

International bodies such as the International Monetary Fund, the World Bank and the EU, have been important factors in pushing Turkey to establish its independent institutions since the country’s 2001 financial crisis.

*Erisa Dautaj Şenerdem contributed to this article from Istanbul.



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