Prime Minister Bulent Ecevit said on Monday, May 21, Turkey's financial reforms would inevitably involve some social suffering and the country must be allowed to settle down before elections could be considered.
Ecevit, in words directed to foreign investors, said he believed his three-party coalition could remain in office until its term expired in 2004. But when asked about speculation of early elections to underpin reforms, he replied: "It's a bit too early for the time being. Reforms have to settle down a bit before we can have elections."
He acknowledged that the strict monetary measures under a new $10 billion International Monetary Fund (IMF) rescue package would cause some hardship ― a hardship that analysts feel may reflect further on the government at an election and ultimately on new Economy Minister Kemal Dervis.
Trade Unions are pressing for higher wages to compensate for inflation. Unemployment is growing and prices have soared since a February financial crisis that scuppered an IMF-backed anti-inflation program and slashed the value of the lira by over 40 percent.
The government predicts a three percent contraction in the economy over 2001 but a return to growth in the second half of the year. Some analysts, however, fear the contractions could be far more severe.
Asked about Dervis's performance since he was recalled from a World Bank career and put in charge of the economy, Ecevit told Reuters: "Thus far he has been quite successful... On the whole people appreciate it."
Dervis has made no definitive statement about a possible venture into politics, though his popularity is currently very high. But he has made it clear he is uneasy about carrying out his job without the bedrock of electoral approval.
He embarks this week on a campaign to promote and explain his reforms throughout Turkey, insisting this does not constitute an election campaign. Dervis sees himself as a child of the center-left, a territory that Ecevit's Democratic Left Party (DSP) occupied successfully with over 20 percent of the vote at May, 1999, elections.
Recent opinion polls, however, suggest that the DSP and the second biggest party in the coalition, the rightist Nationalist Action Party (MHP), would fail to gain the 10 percent electoral vote necessary for parliamentary representation.
A vast array of legislation, from a banking law to privatization, has been passed by parliament under IMF auspices. The current political constellation, however, appears frozen while it is implemented.
Ecevit, 76 later this month, denied accusations that the nationalist wing of his coalition was a source of instability and resistance to reform. "(Foreign investors) should have no doubts about stability," he said. "There are sound relations between the leaders of the three political parties."
Foreign investors appear for the moment to be keeping a distance from Turkey. Their return to the markets may be some gauge of the success of Turkey in implementing its reforms this year. ― (Reuters, Ankara)
By Ralph Boulton
© Reuters 2001
© 2001 Mena Report (www.menareport.com)