IMF mission begins 10-day Turkish visit

Published June 3rd, 2001 - 02:00 GMT

An IMF mission began talks in Ankara Friday, June 1, on Turkey's progress in implanting an austerity program, one day after a top minister resigned for apparently criticizing part of the plan. 


The IMF delegation has around 10 days to check progress in implementing structural reforms to haul the economy out of a financial crisis, which seized Turkey in February, Anatolia news agency said. 


The International Monetary Fund agreed on May 15 to an eight-billion-dollar fund package for Turkey. The IMF panel led by Finn official Juha Kahkonen is to decide whether to approve payment of a first tranche of $1.6 billion (€1.9 billion) this month. 


The Turkish lira has lost around 40 percent of its value against the dollar since the country floated the currency on February 22 after Ankara was forced to abandon an IMF-backed anti-inflation plan. 


Turkish Privatization Minister Yuksel Yalova resigned on Thursday after comments he made about the IMF austerity program sent panic through the stock market. Yalova had come out against what he described as the "rushed" drafting of a law liberalizing Turkey's tobacco industry ― which he was in charge of ― as a key part of the IMF reforms. 


His comments triggered a sudden five-percent plunge in the Istanbul stock market on Thursday. The market later recovered and finally closed slightly higher. "I was misunderstood and my remarks were misinterpreted. I have resigned," Yalova told the NTV television news channel. On Friday, the stock exchange welcomed his resignation, climbing 3.6-percent by midday to 11,276 points. 


Turkish Economy Minister Kemal Dervis, at whom Yalova directed his comments, said late Thursday in Rome that the resignation did not represent yet another government crisis, and that he would not interrupt his visit. "The situation was bad this morning, but now there is no more problem," Dervis had said in a reference to the stock market bounce.  


Yalova, who represents a major tobacco-growing region in parliament, had challenged the economy minister, who brokered the IMF accord, to defend its terms in person. "May those who signed the commitments take responsibility for presenting the project to parliament. The tobacco question is delicate and we must not rush things." 


Dervis had called earlier for the reform measures to be pushed through as quickly as possible. Turkish and foreign analysts said the affair would encourage ministers to hold their tongues and toe the government's line, but that more dissent lay below the surface and could eventually lead to a cabinet shake-up. 


"This resignation is not bad, on the contrary it is a positive sign for the future," said Kentbank director of capital markets Tevfik Eraslan. "Now the ministers will have to hold their tongues and the government will speak with one voice, which is essential to instilling confidence." 


Sociologist Ahmet Insel from Galatasaray University said: "This shows once again the political elite's resistance to change." And Abdurrahmane Arriman, secretary general of YASED, an association of foreign investors, said that enduring resistance to provisions in the austerity plan would probably force the government to replace some other ministers. 


Finally, a European banker remarked: "These kinds of crises will be repeated until there is political change in the government. The men who brought on the crisis are charged with implementing the reforms." 


And the government, he warned, faces more unpopular decisions this month, including one concerning adjustments of public sector salaries. ― (AFP, Ankara) 


© Agence France Presse 2001

© 2001 Mena Report (

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