The IMF and World Bank have agreed to extend $10 billion to support the rocky Turkish economy, IMF managing director Horst Koehler announced here Friday, April 27.
The IMF executive board had met the previous day to discuss Turkey's economic reform program, he told a news conference before weekend meetings of the International Monetary Fund and World Bank.
"The board expressed strong support for the program and commended the Turkish authorities for their efforts in implementing the program's measures," Koehler said.
"Although final details of the program still need to be resolved, the IMF stands ready to support Turkey on its way to economic recovery," the IMF chief added. "Additional financing from the Fund and the World Bank in support of the program would be in the order of $10 billion."
Turkey abandoned a crawling peg between the Turkish lira and the dollar on February 22 in the face of an exodus of funds following a widespread loss of confidence in the government's economic management.
Financial crises, the depreciation of the currency, and the resulting price pressures, broke the basis of the previous IMF-agreed anti-inflation program. But the IMF said it was confident in the new plan.
"There is no absolute certainty but there is a high possibility that this program works," Koehler said. "I think the Turks have come to a difficult, painful process of recognizing reality," he said.
Koehler said he backed Turkey's decision to float the currency. "This will help pave the way for getting out of this crisis with growth," he said. The IMF chief said he was "not amused" by some commentators' criticisms of the Turkish people. "The Turkish people are solid people, hard working, renowned for paying back loans, debt: this should also count," he said.
Turkish Economy Minister Kemal Dervis had drawn up a far-reaching program of economic reform, with a commitment to restructure the banking sector, which was the core problem, Koehler said. "This program is also based on a clear commitment on action to combat corruption and to make this society, the political process, more transparent, to de-politicize the economy," he added.
"There is no absolute certainty but a high probability that it works. And in any case it deserves the support of the international community."
World Bank president James Wolfensohn said earlier that he had seen the reform package and that he supported it.
"I have looked at that program very carefully. I think it is necessarily tough and a very good program and we would support it," he added.
Details of the IMF and World Bank aid were not provided. The Anatolia news agency quoted Dervis as saying in Washington on Thursday that of the total, $8.5 billion would be provided by the IMF and $1.5 billion by the World Bank. That report pushed the Turkish stock market up 13.5 percent. —(AFP)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)