Turkish Defence Budget for 2017 Received Approval from the TGNA

The 2017 national budget allocated for the Ministry of National Defence (MoND) of Turkey and the Undersecretariat for Defence Industries (SSM) was studied at the Parliament General Council on December 10, 2016 and received the stamp of approval from the Turkish Grand National Assembly (TGNA) on December 16, 2016.

The MoND 2017 budget shows around 9% increase of some TL2,250.615 Billion compared to 2016 and amounting to TL28,702.119 Billion (around US$9.12 Billion based on the exchange rate of US$1/TL3.15 foreseen for 2o17). However a fall of over 20% in the value of the Turkish Lira (TL) during January 2016 and January 2017 (reached to around 27% as of April 11, 2o17) means that though there is a 9% increase in TL figures the US$ value of the budget has fallen considerably. According to Medium Term Programme (covering 2017-2019) disclosed in October 2016 by the Ministry of Development, the average inflation in consumer prices in 2017 is expected to reach 6.5%, while the Turkish Government has estimated an average exchange rate of US$1/TL3.15 for 2017.

Of the total MoND budget, 51.5% has been allocated for personnel expenditures, 8.8% for social security premiums, 37.4% for property/goods and service purchases (totalling TL10,734 Billion [around US$3.4 Billion]), 1.5% for current transfer expenditures and around 0.8% for capital expenditures.

Though it was criticized by many in Turkey and abroad, it is the fact that the share of the Turkish defence expenditures in Turkey’s GDP is well below the world average. According to MoND figures the share of MoND budget in GDP and consolidated national budget has been also decreasing steadily during last 1o years. According to 2017 budget figures the MoND budget constitutes around 1.16% (it was 1.2% in 2016) of Turkey’s GDP (estimating TL2.489 Trillion for 2017) and accounts for 4.4% of the consolidated national budget. The Finance Ministry estimates that budget expenses for the 2017 fiscal year will reach TL645.1 Billion, while budget income will reach TL598.3 Billion. The MoND budget had stand at around 9.4% in 1994, 7.5% in 2006 and 4.6% in 2016 of the consolidated national budget. Speaking at the TGNA on November 17, 2016 Turkish Defence Minister Fikri IŞIK, disclosed that according to NATO calculations Turkey had spent about 1.66% of its Gross Domestic Product (GDP) on defence in 2015. This is far less than was spent in the past; Turkey spent 3.45% of its GDP on defence in 2002 and about 1.71% in 2014.

The MoND budget does not include the spending of Gendarmerie General Command or Coast Guard Command, which have been affiliated under Ministry of Internal Affairs following the bloody coup attempt, carried out by Fetullahist Terrorist Organization (FETO) on July 15, 2016. In 2017 a budget of around TL9,374 Billion (TL8,276 Billion during 2016) has been allocated to the Gendarmerie General Command and TL649,7 Million (TL576,8 Million during 2016) to Coast Guard Command. The budget allocated to the SSM is TL462,8 Million, and is used only to pay the salaries and associated expenses of the SSM, as the majority of the SSM budget is met from sources transferred from the Defence Industry Support Fund (DISF).

With the addition of the budgets of the Security General Directorate (SGD, around TL23,538 Billion, a TL2.397 Billion [11,4%] increase on 2016), the Turkish National Intelligence Service (MIT, around TL1.996 Billion), the Secretariat General of the National Security Council (MGK, TL28,7 Million) and the Undersecretary for Public Order and Security (KDGM, TL17,85 Million), the total budget allocated to Turkey’s defence, security and intelligence organisations is reaching to around TL64,360 Billion (around US$20,43 Billion based on the exchange rate of US$1/TL3.15 foreseen for 2017). Thus totalling around TL64,360 Billion Turkey’s combined defence and security budget for 2017 constitutes around 3.8% of Turkey’s GDP. The share of Turkey’s combined defence and security budget in GDP was 3.7% in 2015 and 3.5% in 2016.

The majority of SSM projects are being financed from sources transferred from the DISF, an extra budgetary financial resource for defence procurement that is totally independent of the MoND budget and is one of the most important financial resources for proving long-term funding of SSM’s on-going defence and security related programmes. By November 2011 the DISF had been used by the SSM only for military purchases, but with amendments that made in the SSM act under Legislative Decree No: 661, during 2011 and 2014, the fund is now also available for financing the urgent intelligence and security related requirements of MIT and the SGD. According to SSM figures during 2006-2015 DISF revenues have reached to US$12,1 Billion, while the SSM has paid US$14,5 Billion to fund the defence projects from DISF resources. In 2015 TL4,903 Billion (TL5.479 Billion in 2014) had been allocated from the DISF resources to fund defence and aerospace programmes. According to the SSM 2016 Activity Report, issued in February 2017, in 2016 DISF revenues have reached to around TL10,731 Billion, while the SSM has spent TL9,024 Billion from DISF resources. And as of December 31, 2016 DISF has around TL8,371 Billion worth of accrued assets in Turkish Treasury awaits for remittance. 

 

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