The pace of foreign currency coming to Turkey from unknown sources for the past 14 years keeps on climbing. In the Central Bank’s "balance of payments" table these unregistered funds are shown under the item “net errors and omissions”. Turkey’s improving current-account deficit is raising questions about the sources of financing that are shrinking the gap.
Güngör Uras, an economy columnist in Milliyet newspaper, stated in his recent article that the amount of the dollar inflow whose source is unknown has been over 10 billion dollars in recent years. These inflows have been registered as net errors and omissions by the Central Bank of Turkey.
Asking where these dollars are coming from, Uras informs that in 2015, the source of 1 of the 2 dollar inflows was unknown and for 2016, it is not clearly known where1 of the 3 dollar inflows came from. Based on the information Uras gives, in 2016, dollar inflows coming from capital movements amounted to 22.3 billion dollars, while the inflow without any source information amounted to 11.0 billion dollars. Although the sources are unknown, these amounts financed the current account deficit of Turkey.
REGISTERED AS NET ERRORS AND OMISSIONS
These questionable dollar inflows have been registered as net errors and omissions by the Central Bank of Turkey. However, Güngör Uras questions, although errors can be regarded as normal, it is confusing that these errors have been gradually increasing to the same amount as the inflows from capital movements.
It is even possible to say that, as he argues, the wheels of the economy of Turkey continue spinning because of these inflows.
UNREGISTERED MONEY INCREASES EVERY ELECTION PERIOD
Money inflow from unknown origins increases in every election campaign period. With two elections squeezed in 2015, Turkey, in the first nine months of the year, had a 52 percent increase in money inflow of unknown origins compared to the same period last year, totalling $13.44 billion.
THE “AID” COMING FROM KING ABDULLAH OF SAUDI ARABIA
In a public statement, the Minister of Environment and Urban Planning, Erdoğan Bayraktar said in 2012 that “a reconstruction permit for Sevda Tepesi [İstanbul] should be issued for the King because he gave 10 billion dollars to Turkey”.
Although this amount should have been found in the balance of payments, as Korkut Boratav, an economics scholar, says, it was not registered there. The only option left was that this amount was in net errors and omissions. Given the size of these inflows, Boratav argued, they should be regarded as underground capital movements that the AKP government tries to rely on for economic stability in Turkey.
MYSTERY FUNDS AND AKP
Following the AKP's victory in the first elections it contested in November 2002 there has been a boom in mystery funds coming to Turkey. In 2002, $758 million exited Turkey but in 2003 $4.489 billion entered. The pouring in of mystery funds gained momentum in 2007, when the AKP also took over the presidency of the country. While the incoming mystery funds were $517 million in 2007, in 2008 that increased sixfold to $3 billion. The year 2011 was a record-breaker, with $9.4 billion arriving in mystery funds.
In the 11 years before the AKP, the unrecorded funds were flowing in the other direction. Between 1992 and 2002, $3.5 billion from unknown sources left Turkey.
