Turkey unveils reforms, asks for public sacrifice
Turkey's Economy Minister Kemal Dervis Saturday, Aprilo 14, announced long-awaited reforms to overcome an economic crisis, urging a disgruntled public to make sacrifices, but labor and business attacked the program as insufficient.
The program's main aims were cutting public spending by nine percent, decreasing the state's debt burden, restructuring its weak banking system and accelerating privatization, including the long-delayed sale of Turkish Telekom.
"This is not a stability program. We will tighten our belts, but we must also go for restructuring along with stability. We need to change Turkey's economic system," Dervis, flanked by top bureaucrats told a news conference.
As Dervis made his remarks, thousands of people took to the streets across Turkey to protest the government's handling of the crisis that led to increasing prices and layoffs in the latest of a series of occasionally violent demonstrations.
Some 30,000 demonstrators, most of them public service workers, called in Istanbul on the government to resign at a peaceful protest under heavy police guard. Similar rallies in 26 other cities also ended peacefully.
But in the town of Gaziantep in the southeast of the country shops were looted by demonstrators. Five activists were arrested at Batman and a total of 112 people were held by police at Corum in the north of the country, the Anatolia news agency reported.
The reforms also came under heavy fire from leading trade unions for failing to address more urgent problems faced by the public such as falling purchasing power, unemployment and income distribution.
"This program does not bring any contribution to laborers and is far from resolving the country's problems," Bayram Meral, the head of Turkey's biggest trade union Turk-Is, told Anatolia.
Under the new program, Turkey has now revised its year-end inflation targets to 52.5 percent in consumer prices and 57.6 percent in wholesale prices, Dervis explained. He added that the increase in retail prices should be brought down to 20 percent and for wholesale prices to 16 percent in 2002. He also predicted a negative growth of -3.0 percent in 2001, but said Turkey would be able to achieve a growth of five percent at the end of 2002.
But Dervis gave no details of much-needed foreign aid, pinned at $10 to $12 billion, saying talks were still continuing with international financial organizations. "I hope a decision will be reached on this issue next week. There are some positive developments, but foreign creditors are waiting to see the details of the program," he added.
Dervis, who was brought in to lead the economic recovery efforts, appealed to the public to be patient and to support the program. "We are going through a very difficult period. We will not be able to improve in two or three months. Everyone must make sacrifices, but there is no reason for us to lose hope," he added.
Turkish Prime Minister Bulent Ecevit promptly pledged the government's full support to the program, and asked for public backing for the reforms. "The coalition supports the program with sincerity and determination. The heavy economic and social problems, which have accumulated over the years can be overcome only though public solidarity and sacrifice," Ecevit said.
The head of the Ankara trade chamber, Sinan Aygun, meanwhile, countered that the lack of any urgent measures only meant the continuation of the financial turmoil. A foreign banker based in Istanbul, who did not want to give his name, described the program as a disaster, saying that the lack of any announcement on foreign aid was "worrying".
Ankara was forced to abandon a currency peg and float the lira on February 22 to contain a serious liquidity squeeze, triggered by fears of political instability after a fierce row at the top echelons of the state.
The move, which broke the backbone of an ambitious IMF-backed disinflation program, has resulted in the lira falling some 47 percent against the dollar, price hikes on basic goods and rising inflation. — (AFP, Ankara)
By Hande Culpan
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)