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APRIL 9-16, 2001 Compiled by the Washington Office of Turkish Industrialists’ and Businessmen’s Association (TUSIAD-US) CONTENTS ECONOMY MINISTER UNVEILS ECONOMIC PLAN: VIRTUE PARTY OPPOSES, COALITION LEADERS PLEDGE SUPPORT Kemal Dervis, Turkey's new economy minister unveiled Turkey’s long awaited economic program Saturday calling for privatization, banking reforms and cuts in state spending - measures aimed at overcoming the crisis that has led to mass layoffs and demonstrations nationwide. Meanwhile, in Istanbul, some 10,000 Turks protesting rising prices urged the government to resign. Demonstrations were banned in 20 provinces after clashes between police and protesters left more than 200 injured in Ankara earlier in the week. Dervis warned Saturday of ``tough times'' for the next three months, adding that ``compromises are required, but there is no need to be pessimistic.'' According to the new program, Turkey's economy is expected to shrink by 3 percent this year but grow by 5 percent in 2002. Inflation is expected to reach 57.6 percent in 2001 but drop to 16.6 percent in 2002. Cutting state spending - by 9 percent this year - was the most important part of Turkey's new fiscal policy, claimed Dervis. State banks, now burdened by some $20 billion in bad loans, must be reformed, he added. “Money-losing branches should be closed and some state bank workers should be offered retirement packages”. Dervis also announced a freeze on public hiring, except in health, education and security, and no salary raises for public sector employees beyond the inflation rate. Privatization must move forward, Dervis said. Turkey is seeking $10 billion to $12 billion from international institutions and the country's trade partners, but Dervis said it was unclear how much aid Turkey would receive. /Associated Press/ On the other hand, Lutfu Esengun, the Deputy Chairman of Virtue Party, said that his party would not support the economic program. He also claimed that the economic program prepared by Kemal Dervis would prove fruitless and it has disappointed all the sectors. /Turkish Daily News/ Premier Bulent Ecevit said on Saturday that the coalition government was backing the new economic program with determination. After holding a meeting with deputy prime ministers Devlet Bahceli, Mesut Yilmaz and Husamettin Ozkan, the coalition leaders released a press statement. Ecevit said that the legislation urged for the program would be finalized as soon as possible. “We, the prime minister and deputy prime ministers, Bahceli and Yilmaz, support the program from the heart and with determination. Besides the foreign support we expect for the program, we believe that our nation will give the most efficient support. The heavy economic and social problems, which are the accumulation of long years, can only be overcome by the solidarity and self-sacrifice of our nation…the accomplishment of the program depends on the rapid preparation and implementation of laws, which are necessary for the structural changes. Most of the laws related to the structural changes have been already achieved through the efficient initiatives of our government and the parliament.“ Ecevit claimed. /NTCMSNBC/ For full text and more information on the economic program, please visit www.hazine.gov.tr IMF AND U.S. SUPPORT THE ECONOMIC PROGRAM: LOANS TO BE DETERMINED AT THE END OF APRIL In his statement, Carlo Cottarelli, IMF Turkey Desk Chief, said they were pleased with the economic program announced by Turkish economy minister Kemal Dervis aiming at financial stability, structural reforms and the restructuring of banks. The statement said the monetary and fiscal measures in the program would make a significant contribution to re-establishing financial stability and would bring Turkey closer to a program that would receive support from the international community. Meanwhile, the U.S. embassy in Ankara issued a statement declaring the U.S. support for the economic program, along with the international community. The statement reiterated the U.S. pleasure with the statement of support released by the IMF. IMF is to provide additional loans to Turkey to increase Turkey’s reserves and to meet the new economic program’s loan requirements in addition to the Supplementary Reserve Facility (SRD), a sum of 7.5 billion dollar that it had agreed to provide in December 2000. This additional facility is expected to be in the amount of 5-6 billion dollars but the details are still being worked out by the IMF team in Turkey that is due to depart on Wednesday. Turkish economy minister Kemal Dervis is also expected to go to the U.S. on April 20 to provide detailed information on the new economic program and to renew the support of the G-7. The government expects to secure a total of 15-16 billion dollar loan facility to be provided through the IMF and the World Bank. /NTVMSNBC/ WEEK OF PRIORITY LAWS IN PARLIAMENT Natural Gas Markets Bill, containing 19 articles and envisaging to remove the state monopoly over natural gas market; Civil Aviation Bill that will leave ticket pricing up to the airlines themselves; and Nationalization Bill, envisaging to simplify nationalization, are expected to be enacted this week, the Anatolia news agency reported. Should these bills be passed, Parliament will have managed to pass five 'priority laws' in total so far. The Parliament will also review on Tuesday a bill on the restructuring of the Employment Council. This comprises the second leg of the Social Security Reform program. Besides, the Agriculture and Forestry Commission will review on Thursday the bill on Game Hunting. In addition, the Justice Commission will continue its debate on the new Civil Code on Wednesday and Thursday. /Turkish Daily News/ TURKISH PARLIAMENT AMENDS BUDGET LAW; BILL ON CENTRAL BANK IS IN THE PRIME MINISTRY Turkey’s parliament passed Wednesday a law aimed at covering huge losses made by the three public banks and a dozen private banks taken over by Fund, a reform that was listed among priority measures to overhaul the crisis-hit economy, Anatolia news agency reported. The bill, which amends the budget law, allows the treasury to issue special bonds to generate sources for banking reforms. It effectively includes the debts of the public banks, estimated at about $20 billion, in the budget. The legislation also introduces a series of other technical measures to rehabilitate these banks before putting them up for sale. Economy Minister Kemal Dervis had listed several other legal amendments to reform the ailing banking sector and speed up privatization, which are yet to be submitted to parliament by the government. /NTVMSNBC/ Besides, the bill regarding the Central Bank's full autonomy was submitted to the Prime Ministry. The bill will strengthen the power of the Bank's administration, enhance transparency, and increase supervision of the Bank's accounts. According to the bill, the Bank will be equipped with new powers in line with the EU standards. The primary aims of the Bank will be to control price stability and to determine a monetary policy in line with the inflation rate targets. /Milliyet/ GOVERNMENT UNDER PRESSURE FOR RESHUFFLE BAHCELI: NO REVISION During last week, before program’s announcement on Saturday, pressure has mounted on the government to make political reforms. Following the call for Government’s resignation by TOBB, the Turkish Union of Chambers of Commerce and Commodity Exchange; Turkish Industrialists’ and Businessmen’s Association (TUSIAD) once again voiced its plea to the government for a cabinet reshuffle in its extraordinary meeting on April 12. All speakers in the meeting asked the government to revise the Cabinet. Stressing that they were not asking for the government's resignation, Chairman of the Board of TUSIAD, Tuncay Ozilhan said, "We think a resignation by the government would lead to a turmoil in the country. However, a cabinet revision would not indicate weakness, but would be a sign of determination."/Turkiye/ Additionally, on April 10, members of TUSIAD held a series of meetings in Ankara. The delegation, headed by Tuncay Ozilhan, met with Prime Minister Bulent Ecevit, Foreign Minister Ismail Cem, State Minister Yuksel Yalova, Economy Minister Kemal Dervis, Turkish Grand National Assembly Speaker Omer Izgi and Deputy Prime Minister Mesut Yilmaz. Following the meetings, Ozilhan told reporters "We do not believe it was right to ask for the government to resign now. However, to ensure confidence in the program, a revision should be undertaken in the cabinet." The delegation also met with a number of foreign countries' ambassadors and charge d'affaires during a lunch. /Turkiye/ However, the call for a cabinet reshuffle could not receive support among the government leaders where the coalition members, Motherland Party (ANAP) and Democratic Left Party (DSP) showed feeble support to a reshuffle but the third partner, the Nationalist Movement Party (MHP) expressed a negative response to the idea. At the end, as a response to these demands, coalition partner, MHP leader and deputy Prime Minister Devlet Bahceli said a cabinet reshuffle was out of the question. In this respect, coalition partners held a summit and agreed on rejecting revision in the Cabinet. Moreover, in his address to DSP party group in the parliament, Prime Minister Ecevit criticized TOBB’s request for the government’s resignation. Ecevit said, "For the time being, I do not believe searching for new government models will be beneficial for the country.” /NTVMSNBC-Turkiye/ TELEKOM PRIVATIZATION In his announcement on Saturday, Economy Minister Dervis said that Turkish Telecom would be fully privatized, but foreign strategic investor would not be able to get more than a 49% stake, Dervis claimed. /NTVMSNBC/ TUSIAD REPORT: BANKS SHOULD BE ALLOWED TO SWAP DOLLAR DENOMINATED BONDS Turkish Industrialists’ and Businessmen’s Association (TUSIAD) proposed that banks should be allowed to swap dollar denominated or dollar pegged bonds. In TUSIAD’s report prepared by its Banking Working Group, it is suggested that a 12 to 18 month transitional period should be allowed whereby banks could have a swap capability enabling them to fund the Turkish lira assets and not to increase their foreign exchange liabilities. The report entitled “Solutions for The Banking Sector in Turkey following the November and February Crises” underscored that in an environment where there was serious uncertainty about the IMF financial support in terms of timing and amount, a macro structure that would put banks in a stable framework was a must. Among the measures proposed in the report was a facility to the of 5 billion dollars to be obtained from abroad should be added to the capital of state banks, which could then sell this facility to private banks at market rates. FOREIGN MINISTERS SUMMIT IN SKOPJE Foreign Minister Ismail Cem attended the Southeastern Europe countries’ foreign ministers summit organized by the US initiatives in Skopje on April 12. Cem met here with the US Secretary of State Colin Powell and Greek Foreign Minister George Papandreou. The recent developments along the line of Macedonia-Kosovo border were discussed during the summit. /Cumhuriyet/ CALL ON BUSH In a letter to the US President George W. Bush, eleven US Senators asked the US Administration to support Turkey in her struggle to restore a stable economy and become a full EU member. Pointing out Turkey's strategic importance, the letter stated that assisting Turkey in her political and economic reform efforts would be compatible with the US interests. /Turkiye/ HUMAN RIGHTS BOARD ESTABLISHED A decree with the force of law on establishing a Human Rights Board attached to the Prime Ministry was passed by the Turkish Grand National Assembly (TGNA). Several committees will be established to investigate alleged human rights violations. /Sabah/ TRADESMEN CLASH WITH POLICE; LABOUR PLATFORM PROTESTS END PEACEFULLY Tens of thousands of protesters took to the streets of Istanbul and other Turkish cities on Saturday, as Turkey announces its new Economic Program, to protest the government’s handling of the economic crisis, resulting in increasing unemployment. The meeting ended peacefully without any violence or resistance to the police. On the other hand, the official demonstration by the Ankara Union of Chambers of Tradesmen and Artisans had turned into a violent mass riot on April 11. At least 202 people, including 137 police officers were wounded during the clashes. Ankara Governor Yahya Gur prohibited any demonstrations in Ankara for a month period. Interior Minister Sadettin Tantan denounced the violence and said illegal terrorist groups might have infiltrated the demonstration. There were also anti-government demonstrations in Izmir, Istanbul and Konya on the same day. Upon these widespread tradesman demonstrations protesting the government all over Turkey, the government had taken certain measures to protect the economic conditions of the tradesmen. /Cumhuriyet/Turkish Daily News/ $19.5 BILLION SAVINGS BY THE ARMED FORCES The Office of the Chief of the General Staff announced its decision to postpone 32 weapons procurement projects, totaling $19.5 billion. The announcement said, "The Turkish Armed Forces (TSK) is aware that countries lacking a strong armed forces as a deterrent do not have a chance to survive. Similarly, economically weak countries cannot have strong armed forces. The TSK will continue its efforts to modernize its defense systems and increase its strength while having to minimize its capabilities and economize in its budget." State Minister for Economics Kemal Dervis visited the Office of the General Staff last week to thank for their declaration to save $19.5 billion in defense expenditures. /Turkiye-Milliyet/ ECONOMIC AND SOCIAL COUNCIL LAW ENACTED The Economic and Social Council, formed to create economic and social policies and to ensure social consensus and cooperation, was activated. The Prime Minister, the Deputy Prime Ministers, nine Ministers, three bureaucrats and representatives from seven non-governmental organizations will have positions in the Council. The objectives of the Council are as follows; ensuring participation of non governmental segments of the society in the formation of the government policies; preparing opinions on related draft laws, development plans etc. The Council will convene upon a written request of one third of its members or at the invitation of the Prime Minister once every three months. /Star/ WORLD BANK'S REPORT The World Bank foresees that Turkish economy will leap in 2002. A report entitled "The Finance of Global Development" by the Bank said international financial transfers play an important role in the economies of the developing countries. Regarding the crisis in Turkey the report said, "This year, Turkey's output is expected to shrink, but the economy will boom in 2002. The implementation of new policies, an increase in its competitive power, and securing the confidence of investors in Turkey will result in a leap in the Turkish economy”. /Milliyet/ ATTEMPTS OF ARMENIAN AND GREEK LOBBIES 10 US House Representatives presented a bill to the Congress, on behalf of the Armenian and Greek lobbies, asking for greater sensitivity over Turkish demands to islands in the Aegean. The bill reminds the US that it is also a party to the Lausanne and Paris Treaties, which determined the borders in the Aegean Sea, and argues that the Turkish government demands islands in the Aegean, which belong to Greece according to the above-mentioned agreements. /Cumhuriyet/ PAPANDREOU'S VISIT TO ANKARA ENDS ON HIGH NOTE The two-day working visit to Ankara by the Greek Foreign Minister George Papandreou ended Friday on a high note with concrete results obtained on various projects, although no headway was reported on sensitive political issues concerning the Aegean. A commitment by the two countries to adhere to the Ottawa Convention on land mines featured among the highlights of the visit by the Greek Foreign Minister. On the other hand following items were agreed upon: 1.The road connecting Istanbul and Greece will be turned into a highway. 2.Youth camps will be established on the border between Turkey, Greece and Bulgaria. 3.Turkish contractors will undertake some construction projects in Greece for the 2004 Olympic games. 4.Greece will extend the scope of the day-passes it issues to Turkish visitors to Greece. 5. Both sides will cooperate on the transportation of Central Asian, Azeri or Egyptian natural gas to Europe through their territories. /Turkish News/ MARYLAND HOUSE APPROVES ARMENIAN BILL In the US Maryland House of Representatives has approved a so-called Armenian resolution. The resolution will mark April 24 as a day to commemorate the so-called "Armenian genocide". 78 of 141 representatives voted in favor of the resolution. The greatest support for the Armenian lobby in Maryland came from the Greek lobby. US Secretary of State Colin Powell had sent a letter to Maryland's House of Representatives asking them not to pass the resolution. /Turkish Daily News/ |
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