An agreement to transfer $1,200 million to the central bank from the US Federal Reserve for a special defence fund was signed with the US in Ankara on 4 October. The Turkish defence fund was established after the Kuwait crisis to finance defence projects and to compensate Turkey for its economic sacrifices during the crisis.

At present, about $1,300 million has accumulated in the fund towards the target of $3,500 million. The fund will help pay for an additional production run of 80 F-16 fighters at a complex outside Ankara by the joint-venture Turkish Aerospace Industries (TAI), under licence from the US’ General Dynamics (MEED 12:2:94). The sale of F-16s to Kuwait and of armoured personnel carriers to Saudi Arabia is also being discussed.