Turkey ‘to restructure development bank in bid to escape middle-income trap’
DHA photoThe Turkish government has prepared to restructure the Development Bank in a bid to enable the country to escape from the middle-income trap and raise its financing to less developed regions, Deputy Prime Mehmet Şimşek told Anadolu Agency on Sept. 18.
“In the new period, the bank will offer long-term and low-cost financing to technological and strategic investments to enable Turkey to get out of the middle-income trap,” he said, adding that the bank equities were planned to be raised from 160 million Turkish Liras ($53.7 million) to 1 billion liras ($336 million) and the financial instruments in the hands of the bank to be diversified.
Şimşek noted that most of the development and investment banking activities were concentrated on developed regions in Turkey.
“Some 78 percent of the loans provided by all development and investment banks other than Turkey’s Development Bank were used in investments in the first and second regions, which are mainly composed of northwestern, Aegean and Central Anatolian provinces. This rate declined to 43 percent with regard to the Development Bank’s activities, while hitting 57 percent for the eastern and southeastern regions,” he said, adding that the Development Bank needed to be restructured to increase the share of the eastern and southeastern regions in the allocation of development funds.