Turkey's parliament passed a law on Saturday, May 12, to privatize Turk Telekom, a step demanded by the IMF in return for some $10 billion in new international lending for the crisis-racked country.
The Telekom law sparked bitter wrangling between Economy Minister Kemal Dervis, who drafted the plan to win new loans, and the Nationalist Action Party (MHP) wing of the coalition government.
The law passed on Saturday reduces powers of the MHP-controlled Communications Ministry over Telekom and a telecommunications sector that will be liberalized once more than half of the company is privatized.
Its passage follows that of a banking reform law on Friday and means Turkey has now completed the bulk of its pledges to the IMF in return for approval of the $10 billion in new IMF and World Bank loans.
Turkey needs the money to restore international confidence and help with the rehabilitation of a wobbly banking system that collapsed into crisis in late February.
Parliament held an unusual Saturday sitting to debate the Telekom law, which Dervis wants ready before the IMF meets to approve the lending on May 15.
Opposition deputies criticized the government for bowing to the demands of international lenders, but Prime Minister Bulent Ecevit's government has a large majority in the 550-seat assembly.
The law sets no timetable or method for the sale of the company, giving that authority to a tender commission.
But the law reserves a "golden share" for the Turkish state to allay military fears over the sale of what they see as a strategic asset. It also limits any foreign ownership of Telekom to a maximum of 45 percent.
Research carried out in 1998 by investment bankers Goldman Sachs put a $10 billion estimated price tag on the company. But falling world demand for such share offers threatens to reduce interest in a sale Turkey has been planning since the early 1990s.
Communications Minister Enis Oksuz on Friday called for a re-evaluation of the company's value. — (Reuters, Ankara)
© Reuters 2001
© 2001 Mena Report (www.menareport.com)