A senior monetary official in Turkey said urgent legislation on the privatization of state-owned banks is needed to secure World Bank loans, the Anatolian News Agency said at the end of last week.
Treasury Undersecretary Selcuk Demiralp said legislation allowing the commercialization and privatization of state banks was necessary for a World Bank review of releasing loans to Turkey.
Demiralp called on parliament, which returns from summer recess on October 1, to act quickly. Turkey’s president had vetoed the government decree on the privatization of some state-owned banks.
"Technically the decree with the power of law is essential for utilization of the World Bank's financial sector adjustment loans [FSAL]," Demiralp told Anatolian News Agency.
President Ahmet Necdet Sezer vetoed the decree on grounds that some of its provisions contradict the Constitution, and the government must decide whether to press it in the same form or send it to Parliament. Ministers worry that sending the bill to parliament would delay the World Bank loans. Demiralp said Turkey had expected the World Bank to review the bill at a Nov. 27 meeting and urged that there should not be any delays because until the legislation is in place, Turkey cannot use a $1.5 billion FSAL.
Demiralp, who attended the World Bank and International Monetary Fund meeting in Prague said international lending groups and investors are “eagerly waiting Turkey’s 2001 budget.” "The government must send the budget bill to parliament by Oct. 17. Markets are expecting measures to be incorporated in the budget, before they take any steps,” Demiralp said. Demiralp played down a shortfall of $US2 billion in sell-off proceeds from the failure to sell off Turk Telekom. He said the shortfall would not cripple public finances. But he urged the telecom tender commission, headed by Privatization Administration (OIB) President Ugur Bayar, to detail the bidding system as soon as possible so that markets could relax.
But an understanding over the issue seems to be out of reach. Bayar criticized plans to sell off 29 percent instead of 34 percent of the fixed-line monopoly. State Minister Recep Onal said ministers agreed to raise the strategic sale to 29 percent from an earlier 20 percent because it was not appealing to foreign investors. Telecom sale and current account deficits have emerged as Turkey's two main economic issues that are being strongly questioned by international circles as well.
"Everyone appreciates the decisions Turkey has made so far and the economic program it has been applying. But what lies ahead is a matter of curiosity," Demiralp said. –(Albawaba-MEBG)
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