In the wake of a dispute between the International Monetary Fund (IMF) and Turkish officials concerning the rate of privatization and economic reforms, Prime Minister Bulent Ecevit has agreed to make changes in the management of Turkish Telekom. The IMF claims that the board chosen to manage Turkish Telekom until its privatization have been appointed on the basis of political reasons rather than their ability to run a private enterprise.
The decision came following the IMF’s cancellation of a meeting last week, where a $1.5 billion loan to relieve Turkey of its financial turmoil was to be discussed. In addition, the World Bank followed its footsteps and delayed the extension of a $1.7 billion loan, reported AFP news gency on Tuesday, July 10.
Ecevit denied the IMF’s claims and stated that the decision to cancel the promised loans severely affects investors confidence in the country. Nonetheless, in order to prevent the deterioration of Turkey’s ties with the IMF, he has agreed to re-assemble the Telekom management and make the necessary changes. In additon, he pledged to speed up procedures to reform the ailing banking sector—another key condition to obtaining the IMF loans.
The recent decision to delay the release of the IMF and World Bank loans has led to a continued depreciation of the Turkish currency, which has lost approximately 47 percent of its value against the dollar since February. A second financial crisis in three months took place in February, forcing the governement to abandon its pegged currency policy, which was the key decision in a previous deal between Turkey and the IMF. — (MENA Report)
© 2001 Mena Report (www.menareport.com)
