Officially, the TWF’s main objectives are to contribute to Turkey’s economic growth by ensuring value increase of key public assets, support the development of assets suitable for participation financing, deepen capital markets through the introduction of a variety of products, attract further investments to Turkey and provide capital for new investments, support the development of strategically important industries, and participate in large-scale investments.

To start with, the TWF has nothing in common with the world’s best-known sovereign wealth funds such as Norway’s Government Pension Fund, United Arab Emirates’ Abu Dhabi Investment Authority, China Investment Corporation, Kuwait Investment Authority and Saudi Arabian Monetary Agency. Generally, sovereign wealth funds rely on the budget surpluses of their respective governments. In other words, genuine wealth funds belong to countries with current account surpluses and certain natural riches, mostly oil and gas. Turkey has none of these, struggling with both budget gaps and a chronic current account deficit.

The legislation creating the TWF was passed hastily in the summer of 2016 amid the clamor of the July 15 coup attempt, outlining ambitious objectives to support Turkey’s development. Public assets worth $160 billion were transferred to the fund, though many were skeptical over its stated goals and some even saw it as a government move to create a “parallel budget.” Looking at what the TWF has achieved thus far, one could conclude that it is next to nothing, an assessment that even the fund’s spearheads, including Erdogan, appear to share. So what went wrong?

The deal comes as another sign of the growing ties between Turkey and Russia, but how it will unfold is a curious question, for the future of the TWF itself is mired in uncertainty. Ever since its creation in 2016, the TWF has been under criticism, and even President Recep Tayyip Erdogan has admitted that it has been a failure, calling for restructuring. The main opposition, meanwhile, calls for dissolving the fund altogether.

During Russian President Vladimir Putin’s April 3 visit to Turkey, the two sides finalized an agreement on the creation of a $500 million joint investment fund , among other deals. The fund, which, according to official statements, will focus on infrastructure, health care and information technology projects, will be a joint venture between Ankara’s sovereign wealth fund, the Turkey Wealth Fund (TWF) and the Russian Direct Investment Fund.

Public assets transferred to the fund included the shares of giant entities such as public lenders Ziraat Bank and Halkbank, Turkish Airlines, Turk Telekom, PTT postal service, National Lottery, Istanbul stock exchange, pipeline operator BOTAS, oil company TPAO, satellite communications company Turksat, tea company CAYKUR and Eti Maden mining enterprise.

Erdogan had entertained high hopes for the fund. Speaking in November 2016, he described the fund as “a very belated project” and expressed confidence that the assets it would create would “increase our strength, both nationally and internationally.”

Yet the mountain brought forth a mouse. Less than a year later, in September 2017, Erdogan was grumbling that the fund had failed to progress on the “targeted and desired” course. “We have decided that things cannot go on like this,” he said. “Reorganizing the wealth fund is a must.”

By the time of this admission of failure, the TWF was already under fire from the opposition and other critics outside parliament. Atop its hasty creation, almost as a fait accompli without any public debate, the transfer of huge public assets to the fund added to the controversy. Many saw the move as a different way of plundering public resources. The appointment of figures close to Erdogan to the fund’s management fueled speculation over the fund’s purpose.

When it comes to what the fund has done with the assets, it provides the following explanation on its website: “Assessment and independent auditing work on all assets transferred to the TWF is in a process of completion. After the identification of potential development and synergy realms, five-year value creation programs have been drawn up for all assets and submitted to the prime minister’s office for the approval of the Council of Ministers. New investments, to be made simultaneously in this process, will be also outlined.”

In December, Omer Fethi Gurer, a lawmaker for the main opposition Republican People’s Party (CHP), submitted a written parliamentary question to Prime Minister Binali Yildirim, asking about the fate of the fund’s strategic plan and the investments it would finance. He also requested information about any plans to sell or mortgage assets.

The response came from Deputy Prime Minister Mehmet Simsek, who oversees the economy. Simsek said the TWF’s activities could proceed under a three-year strategic investment plan, adding that a blueprint had been submitted to the prime minister’s office for approval in April 2017.

At the time Simsek disclosed this information, the plan had been waiting for seven months without a decision, which seemed to justify criticism that the TWF was stillborn amid discrepancies between its objectives and functions.

This raised further questions about the purpose of the fund and some, like CHP deputy Cetin Osman Budak, wondered whether it could end up dissolved. In his own parliamentary question to Yildirim, Budak asked whether the government would consider scrapping the TWF, arguing that it was essentially designed as “an unchecked second Treasury” and contributed nothing to the economy. According to the lawmaker, the state of affairs was in itself a confession of the fund’s failure and no management reshuffle could make it useful for the economy, hence it should be dissolved without squandering further public funds.

Other opposition questions to Yildirim include the following: What efforts has the TWF made in line with its objectives to secure external funds, increase the value of assets in its portfolio and participate in strategic investments, and what results has it obtained? How much revenue has the fund secured through its activities thus far? How much money has the fund spent on administrative expenditures such as personnel salaries, immovable properties, furnishing and cars? How much payment has been made to members of the fund’s executive board?

While those questions still await answers, the TWF remains an entity that essentially exists only on paper, having failed to make any tangible progress on its objectives and have its strategic plan approved by the government. Some reports suggest that differences between Erdogan and the Cabinet have also contributed to the stumbling, which makes the future of the fund even more curious.