Turkish government rows over IMF reforms

Published May 13th, 2001 - 02:00 GMT

Prime Minister Bulent Ecevit said on Saturday, May 12, Turkey's efforts to win $10 billion in crisis loans were too important to be distracted by reports of government rows over the reforms the IMF has demanded. 


The 75-year-old prime minister's comments followed newspaper reports that the nationalist wing of his coalition had clashed with Economy Minister Kemal Dervis over the reams of reform legislation that must be pushed through parliament. 


"At this time I find it worrying to go into arguments about the government," Anatolian news agency quoted Ecevit as saying. "We are going through a critical period. We have the chance to straighten the economy. To make the most of that chance I don't want to contribute to this kind of debate." 


Turkey has promised the IMF it will pass a swathe of deep-reaching reform legislation drawn up by Dervis before the Fund meets on May 15 to approve $10 billion in new IMF and World Bank lending to help Turkey pull itself out of economic crisis. 


Turkey needs the money to ease investor concern over a swelling domestic debt burden. The country has been trying to rehabilitate a banking sector that has collapsed into crisis twice in the last six months. 


All three large-circulation dailies with close links to the establishment reported a bust-up between Devlet Bahceli, leader of the Nationalist Action Party (MHP) wing of the government, and Dervis over telecommunications sector liberalization. 


"With Bahceli and Dervis facing off, the government shook to the biggest earthquake in its two years of life," wrote the newspaper Sabah of coalition rowing on Thursday and Friday. 

Central to the row was an IMF demand that powers be given to a board to regulate a liberalized telecommunications sector at the expense of the MHP-controlled Communications Ministry. 


While details of the reported argument behind closed doors in Ankara varied, most papers said that Bahceli had asked whether Dervis, a former World Bank bureaucrat called in from the United States to draft Turkey's recovery plan, was loyal to Turkey or to the international lenders in Washington. 


"We gave you a job to persuade the IMF, now you are doing the opposite and trying to persuade us of the IMF's views. Who do you represent, the IMF or the government?" the big-circulation daily Hurriyet quoted Bahceli as saying before storming out of the meeting. 

It said Prime Minister Bulent Ecevit had rushed after the nationalist leader and persuaded him to return. 


The newspaper Milliyet called the row an "MHP rebellion against Dervis". Most newspapers said Bahceli had later called an emergency meeting of MHP party aides at which withdrawal from the coalition was rejected as too damaging for the country. 


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. It passed a banking reform law late on Friday. 


Turkey needs the new IMF lending, its third such agreement in a year and a half, to help it restore order to a banking sector in chaos, whose rehabilitation analysts say could cost as much as $40 billion in new domestic debt. — (Reuters, Istanbul) 


By Steve Bryant 


© Reuters 2001

© 2001 Mena Report (www.menareport.com)

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