Turkey's economy minister Kemal Dervis said on Monday, April 23, his country's crisis-ridden economy was paying the price of "unbridled" global financial deregulation. "Turkey, like many other emerging countries, is paying the economic and social price of this unbridled (international financial) deregulation," Dervis told the French daily Liberation in an interview.
He said the international community should urgently set up stricter rules on transparency and prudential standards for banks and speculators. "It is always the same thing that happens. As soon as they think that their profits will drop, there is a flight of speculative capital," he said. "That just makes the crisis worse."
Dervis, a former World Bank vice-president, recently unveiled a new reform program aimed at revitalizing Turkey's economy which has been embroiled in crisis since early in the year. The new program became necessary after Ankara was forced to abandon a currency peg and float the lira on February 22 to contain a serious liquidity squeeze, triggered by fears of political instability after a fierce row at the top ecehelons of the state over ways to fight corruption.
The crisis was the second in four months. At the centre of instability has been delay over reform of the banking system and over deregulation. Flotation of the currency, which broke the backbone of an ambitious IMF-backed disinflation program, resulted in the lira falling some 47 percent against the dollar, price hikes on basic goods and rising inflation. Dervis hopes through the programme to win international confidence to win billions of dollars of international aid.
The Dervis plan aims to cut public spending by nine percent, decrease the state's debt burden, restructure its weak banking system and speed up privatization. —(AFP)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)