Major public enterprises in Turkey: 2005-2013

Abstract

This paper presents an analysis of the roles and performances of the major public enterprises (MPEs) from the energy, transportation, communication and construction sectors in Turkey between 2005 and 2013. The recent governmental policy towards the PEs presents differences based on sectors. The state is intentionally quitting agriculture, service and non-strategic manufacturing businesses, passing production to private sector. On the other hand, energy, transportation, communication and construction sectors are of great importance to the state: MPEs in these sectors are growing and among the biggest corporations in Turkey. This paper analyzes all PEs in these critical sectors, especially pays more attention to energy sector PEs due to sector's rising importance over the economic development. The sectors to be quitted by the state are kept out of this study. There are common reasons assigning importance to energy, transportation, telecommunication, and energy sector MPEs. First, volatility in energy prices makes energy and transportation MPEs highly risky. Since energy sector is highly strategic and MPEs are exposed to exchange rate risk, there are problems in privatizing activities. Transportation and communication sectors are other important ones for the government, mostly because of strategic reasons: railways, airlines, coastal security services, broadcasting, governmental news agency, posting, satellite communications and cable TV systems, state TV and radio are operated by MPEs. The fraction of these MPEs contribution in GDP is increasing in the last years. Lastly, construction is a very special sector for Turkey: high growth rates are caught up by the growth in construction sector. Therefore, it is a strategic sector and government supports PEs in order to both expand the sector and also to provide low- budget housing for lower income groups.