Turkey set to unveil economic reforms

By Batuk Gathani

BRUSSELS, APRIL 7. Turkey's economic and fiscal nightmare may be coming to end as the Minister of Economic Affairs, Mr. Kemal Dervis, hopes to announce next week ``good news'' to resolve the country's financial crisis.

This year, the Turkish stock market lost more than half its value. The currency lost 44 per cent against the U.S. dollar since it was floated on February 22. Business confidence is at its lowest ebb. Recently, when a trader threw his empty cash register at the Prime Minister, Mr. Bulent Ecevit, to show that he had no takings, the incident echoed the depressed sentiment in the Turkish market.

Mr. Dervis's optimism is fuelled by prospects of the government reaching a deal with the IMF and the World Bank over a proposed reform programme. Mr. Dervis returned empty-handed last week from an abortive fund raising mission to Washington, Berlin and Paris. Commentators say the root cause of the current malaise could be attributed to the widening chasm of divide and personality clash between the President and the Prime Minister. This has plunged Turkey into severe economic crisis with immediate loss of less than half a million jobs.

Mr. Dervis is working on economic reforms to boost domestic and international confidence in the economy and to ensure that the beleaguered and battered financial institutions are working. The reforms will focus on the inefficient and weak banking system and profligate public sector. The ailing public sector banks would be reorganized along commercial lines. The burden of taxes cannot be raised further as it is politically not acceptable and economically not viable. Instead, the government will embark on privatisation with new vigour and dedication to ensure that the public sector's share in national economy is drastically reduced. Investors could be provided with new incentives to create more jobs.

Turkey has a high unemployment rate and an equally large number of workers are underemployed. Over four million workers have in recent years migrated to European countries and the government's dependence on their remittances has been increasing.

In February, the Governor of the Bank of Turkey, Mr. Gazi Ercel, resigned in a pique and most Turks then felt the wrong man stepped down. There is also growing disenchantment with the leadership of the 76-year-old Mr. Ecevit, who has consistently blamed ``ministers and officials'' for the crisis. In February, the President and the Prime Minister met for the first time since Mr. Ecevit stormed out of a meeting of the national security council after being accused of tolerating corruption and adopting a ``casual'' attitude to the economic reform process.

As politicians dither, the economy is in free fall. Foreign tourists are heading for Turkey to benefit from the devalued currency. The country may attract some 12 million tourists this year or almost 20 per cent more than last year when it earned nearly $ 10 billion in tourist revenue.

The military is yet to respond to the present crisis. The military, which has staged three military coups in post-war years, regards itself the sole custodian of the Turkey's constitution and strong legacy of `kamalist' secular heritage.

The army has often suspected the President, Mr. Sezer, of hobnobbing with religious fundamentalists since he opposed the recent military-inspired decree to sack thousands of Islamic fundamentalist civil servants and inviting pro-Islamic journalists at the republic day reception.

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