There's confusion about Turkiye's defense budget. I'm gonna share a post that explains the structure of the Turkiye's spending and how it exactly covers all the projects' costs.
The post is from Quora. The question is;
What is the actual defense budget of Turkiye? I see many concurring numbers among statistics between foreign sources and the Turkish ones, what is the reason behind?
The answer;
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I understand you in this. There are loads of confusion about this because most of the people who wants to know what a country spends on defense nowadays, even so called experts doing some crucial mistakes.
One of the mistakes is too look into statistics from various websites, organizations, institutions who write about defense:
- Global fire power (funded BS page, who claims to report only about quantity, but even gets this wrong by a huge margin)
- SIPRI (who collects mostly the informations from news coverage and that most of the time in English)
- Finally, some newspaper articles, again in English from established media's.
This brings us automatically to wrong conclusions, because it's like many other economic statistics out there following western centric views and missing many things about other countries, that does not run with the same principles.
The second reason is the mistake of calculating foreign defense expenditures, importing weapon systems, as the sole interpretation of the defense purchases of a country, while neglecting totally that some of these countries are also developers and producers by themselves.
Now when we talk about Turkiye, the problem and root is the same. Turkiye, unlike many western countries or other counterparts in the lists, has a “
decentralised" defense spending and is on the top also a major producer and exporter of these arms.
What does this mean I will elaborate a bit here:
The defense budget of Turkiye was voted in December of
2020 as around 138 billion liras, 18 billion dollars to that time of currency exchange, 15 billion dollars now after the fluctuation of lira.
According to the budget orientation in Turkiye, the loss of 3 billion through exchange fluctuation need to be covered from the state at the end of year.
What is the defence budget in Turkiye and the misunderstanding which these statistics referring to?
It's generally called “
Savunma bütçesi" and is a collection of departments: defense ministry, gendarmerie, coastal guard, etc.
This money is not there to buy new stuff or develop new projects, where this never ending questions here comes about
“how Turkiye will afford this or that weapon, if budget is X?”
The budget here goes for: salaries, replacement of small ammunition, repair and maintenance, restructure of buildings, organizational spendings, fuel and civilian spendings.
Then where does the money comes for new procurements?
This here is the Defense Secretariat of Turkiye
They are tasked with the tenders and organizational supervision over new projects or procurements if the Turkish army asks for any need.
But, do they have any budget? Except a small amount for their organizational structure and salaries, NO.
Why? There is a trick behind.
Because Turkiye has faced for 60 years openly or hiddenly many sanctions or restrictions from other countries, this institution is actually the superior department, but the final decision for procurement and payment is not done from them, but the
Hazine ve Maliye Bakanlığı (Treasury and Finance Ministry).
Budget: 70 billion dollars for 2021
That means, when for example an S-400 system is bought, the tender, decision is made from SSB, the contract is signed by the guys above and the money goes out of their coffer.
So what is the trick here?
The US has sanctioned the SSB with CAATSA for S-400 and took two executives of them into the travel ban list, which technically and theoretically is right in first sight, but that does not affect anything, because Turkiye proceeds actually to get stuff everywhere including the USA via the end contractor, which is the Turkish treasury.
For stopping this, they have to sanction the State, the Republic of Turkiye, which is almost impossible and really odd, except when they are at a direct war. Both sides know that, but they like that idea and save their face and day.
On one hand, the US took out Turkiye from the F-35 project and sanctioned, but at the same time delivered recently the F-110 jet fighter engines for the Turkish fighter jet project MMU. How this is happening? Well, exactly as I have explained above.
Now, cool and fine, but what about the numerous Turkish indigenous projects which are developed and produced en masses in Turkiye, how they are financed?
Here comes this institute…
A semi-state institute
Why semi? Again past bad experience. İt's a some kind NGO with their own private Fund. Called as
Türk Silahlı Kuvvetleri Güçlendirme Vakfı (Simple translated: Foundation for the strengthening of the Turkish Armed Forces)
İt's a foundation build for the Turkish Army as an NGO, where the Turkish Army and the Turkish citizens own a fund, where the largest Turkish defense companies are inside.
Who are these defense companies?
Aselsan (48. largest in the world)
TAI (53. largest in the world)
Roketsan (89. largest in the world)
Havelsan (99. largest in the world)
Aspilsan
İsbir
They combined earn a whopping amount of yearly 10 billion dollars on revenue with appr. 3–4 billions of profit.
And the state does not spend a single penny for new indigenous projects directly, but rather it's done with the profit of these companies again by these companies themselves with the superstition and permission of TGSKV. Last year they have spend even during pandemic an amount of 1,8 billion dollar into R&D.
Only when it's about a giant project such as the MMU, then the treasury steps in and funds the R&D and the TAI builds the infrastructure and organization on its own. It's a kind of sharing risks.
But TGSKV does not end here. I told above that Turkish citizens also own this foundation right? How? Well, there are numerous taxes in Turkiye, starting from lottery to aid donations, where a part goes directly into the treasure of this foundation and they spend it back equally to these companies for whatever they want to build again. Yearly taxes reach 4–5 billion dollars.
I continue.
Turkish Presidential Department
As the name suggests, this is a secret fund, where nobody, except the national security council know how much money is inside. In past, this was given into the hand of the PM of Turkiye for top secret operations for the security of the nation, but after the change into a Presidential system, it's now in the budget of the Presidential house. This fund pays special operations, including the procurement of special equipment for these operations of the army. The national security agency was also funded in past for operations via this fund, but now they are separated from this and have their own increased annual budget.
And lastly…
Oyak
This is a fund which is owned directly from the Turkish Armed Forces.
It's the second largest fund of Turkiye, with a yearly turn of
20 billion dollars and assets worth 100 billion dollars…
It's active in 8 different strategic sectors, ranging from automobile to metallurgy, resource extracting to refining, key technologies etc.
The reason for the existence of this giant is again past bad experiences of Turkiye and that they see their security way more important than anything else. It was emphasized, that the Turkish Army, if the time comes where the state is under full attack or sanction, to use its own assets to finance himself, own the key industries to get the resources and needed materials on time and indigenously or through their foreign partners to overcome any difficulty.
It owns many stock market listed key companies and every officer inside of the army pays monthly from their salaries a certain amount of percentage to help this fund grow and become some return when they retire. That's why the officers of the Turkish army become in general the highest amount of retirement packages, more than any other sector position.
Now, does the defense figures on statistics list of SIPRI and others seem anywhere close?
Therefore, do not give any importance about these numbers and always take it a bit with salt and pepper.
Conclusion:
It's safe to assume, that the Turkish spending on defense annually amounts more than
30 billion dollars a year easily and if we take also into account that 75 % of these spendings go for indigenous Turkish products rather than to foreign countries and the cost effect ratio is at least 1/5 to any western country, the worth of the Turkish defense spendings a year reach the TOP 5 or 6 in the world.
Even when everything would go bankrupt in Turkiye, the army is never out of money or resources.
Thanks.
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I hope this will clear some confusion and help us understand more about the relationships between various state institutions.
cepr.org
