Foreign aid needed for Turkey's new economic program

Published March 7th, 2001 - 02:00 GMT

Turkey needs foreign aid for success of its new economic program, being drawn up following a serious crisis and flotation of the lira, according to newly appointed Economy Minister Kemal Dervis. 

 

"Foreign aid is absolutely necessary for this new program to work," he told a news conference in Ankara on Tuesday, March 6. "We will explain this to the international monetary institutions, the banks and friendly countries," he added, without giving figures. 

 

Dervis, appointed state minister for the economy last week when he was the World Bank's vice president for poverty reduction and economic management, stressed that the program would be Turkey's "national program" and "not (that) of the International Monetary Fund or of another international institution." 

 

"Certainly, we will ask for the backing of the IMF and the World Bank, but the economic strategy must above all be supported by the people," Dervis said, asking for the support of "all Turks." 

 

A political clash fueled a run on the lira, which forced the government to abandon a currency peg on February 22 and watch the lira plunge around 30 percent against the dollar, wrecking an ambitious anti-inflation drive. 

 

Turkey is struggling to put its economy back on track after it cut the currency loose, breaching a three-year economic reform program backed by a four-billion dollar loan from the IMF. 

 

Dervis said the fight against inflation, which hit 39 percent in 2000, would be carried out with "determination" despite a flurry of price rises after the depreciation of the lira. 

 

The financial crisis would force Turkey to revise its inflation target of 12 percent for 2001 up to 25 percent following the devaluation, authorities have said. 

 

Dervis goes to the United States on Wednesday for a three-day stay to submit his resignation from his post at the World Bank, where he had worked since 1978, and to meet business circles and representatives of the monetary institutions. 

 

"There are subjects on which we have not reached agreement with these organizations, we will discuss them," he said without elaborating. — (AFP, Ankara) 

 

© Agence France Presse 2001

© 2001 Mena Report (www.menareport.com)

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