Turkey expects to receive between 3.5 and four billion dollars from the IMF by the end of June to calm financial markets, Economy Minister Kemal Dervis said in Washington Saturday, April 28.
The funds were the first tranche of a $10-billion support package announced Friday by the IMF and World Bank to support rapid, deep reform to the battered Turkish economy, he said.
"We expect by the end of June a first disbursement of 3.5 to four billion dollars, which should calm the markets," Dervis told a news conference at the Turkish embassy in Washington.
The rest of the funds would be spread over the year, he added.
The International Monetary Fund is to provide eight billion dollars and the World Bank two billion dollars, the minister said. But Turkey must begin to implement key reforms before the international assistance package is presented for final approval by the IMF board in mid-May, Dervis said.
"It is very important that we adopt new legislation on the banking system and the privatization of telecommunications before that date," the minister said. His economic plan aims to cut Turkish public spending by nine percent, scale back the state's debt burden, restructure the fragile banking system and speed up privatization.
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 and forced Turkey back into the Fund's arms.
The first IMF plan, agreed in December last year, was worth more than $11 billion, including seven billion dollars in emergency aid. But it failed to protect Turkey from economic turmoil.
Strong support from the Group of Seven industrial nations and other European countries had helped to unlock the latest aid package, said the minister, who was here for weekend meetings of IMF and World Bank policymakers.
Dervis said he had met with IMF representatives from Britain, Canada, France, Germany, Italy and the United States. "If we do not put this money to good use, we will not be able to get such credits again," he warned.
Turkish people were ready to support the deep-rooted reforms contained in the reform package, Dervis said. Asked why this package would work where previous international rescue attempts had failed, Dervis cited the deep extent of the new package's reforms and the scale of popular support.
"I think this package perhaps has the additional dimension that the structural reforms are very strong and very much upfront," the economy minister said. "I think the intensity of the structural reforms and their depth is, I would say, stronger than in the past," he added. "I do believe also that the popular support for a radical change and for a much more competitive and open economy is very strong in Turkey."
The reforms enjoyed political and public support, the economy minister told reporters. "We have to keep up our efforts of course and we have to make sure by explaining things and by asking for popular support that this degree of confidence remains," he added. "We believe that we can do this in the coming months."
Reports of the impending package pushed the Turkish stock market up 13.5 percent on Friday. — (AFP, Washington)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)