Turkey said on Monday, April 7, it was proposing that 439,000 public sector workers take a pay freeze for the first half of 2001 amid an economic crisis which is producing raging inflation.
State Minister Mehmet Kececiler said the government was offering a pay freeze for the first six months of 2001 and a one-off payment of 600 million lira, or some $525 at current exchange rates, in February 2002 as compensation.
Monthly wholesale price inflation hit 14.4 percent in April alone, compounding the erosion on wages from a 10.1 percent increase recorded in March, right after crisis forced Turkey to float the lira, which has fallen around 40 percent in value.
Kececiler said the offer would cost Turkey 1,500 trillion lira ($1.31 billion) at a time when the government prepares to tighten its belt and squeeze through hefty domestic debt service over the remainder of the year. The present erosion of purchasing power for public sector workers comes after a year in which their pay was tied to inflation targets that the government never met.
Turkey has promised the IMF a tight 2001 budget and a range of reforms in return for $10 billion in promised new lending to help it out of crisis. Turkey aims to have started to rein in inflation by the end of 2001 and is offering the workers pay rises loosely tied to price rises from the second half of 2001 onwards.
Public workers would receive an 18 percent rise in the second half of 2001 and 10 percent rises in each of the two halves of 2002. If inflation is higher than the salary increases over those periods, the government will make up 80 percent of the difference between the two, Kececiler said.
He said the Turk-Is union, the country's largest and representing over 400,000 public sector workers, had backed off a demand for raises of five percent over inflation in the second half of 2001 but still wanted them for both halves of 2002.
"We absolutely cannot give them five percent in the third and fourth six-month periods (of the proposed deal). A country that's going backward does not give these percentages. They need to forget about it," Kececiler said.
Turk-Is head Bayram Meral on Monday said he would consider adjusting a demand for a pay raise of 30 percent in the first half of 2001 to 25 percent, but renewed warnings that recalcitrance in talks would breed violence. "If it's not settled at the table, it's going to be settled in the streets," he said.
Turkish law sharply restricts the right of most public and private sector workers to strike and Kececiler reminded labor leaders that their options are limited. "If there's no collective agreement, then there's a strike. Most of the public sector workers do not have the right to strike," he said.
Labor unions are also demanding the government swiftly pass a work assurance law aimed at ensuring consultation between employers and labor groups over job cuts and improving safety standards at work.
The work assurance law is one of 15 laws included in the government's economic reform program drawn up by Minister for Economy Kemal Dervis in March to woo international lenders. — (Reuters, Ankara)
By Orhan Coskun
© Reuters 2001
© 2001 Mena Report (www.menareport.com)