For current reports go to EASY FINDER

Update No: 057

The Turks are having a tough time of it right now. The economy contracted by 5.5% in 2001, according to IMF estimates. A financial crisis in the early months of the year saw the currency, the lira, devalued by over one half against the dollar and over 600,000 jobs lost in the manufacturing sector alone. 
The world community has been highly charitable with Turkey, the reward no doubt for its fierce pro-Western stance in a region replete with anti-Americanism. As a member of NATO and a candidate for EU membership it has aligned itself decisively with the West.
It has consequently been supported through its troubles by lavish international support. The IMF, for instance, has extended it a loan of US$15.7bn, the largest in its current portfolio. But this is all of doubtful advantage.
The Argentinian debacle is serving to remind foreign investors and others of the extreme and precarious indebtedness of the Turks. At the time of Argentine's default in December it had a foreign debt of US$132bn, 46% of GDP. Turkey's foreign debt is US$115bn, 58% of GDP. If one figures in this year's likely contraction of GDP of 8% and the new IMF loans, the debt load mounts to an awesome 70% of GDP. That does not include domestic debt that the Finance Ministry estimates at 80% of GDP.
There is a huge difference between Turkey and Argentina. Turkey is too pivotal to the West's geopolitical concerns to allow it to go down the tubes. Everything will be done to prevent it going bankrupt.
When Premier Bulent Ecevit made an official visit to the US in mid-January, with a full panoply of ministers, including the key figure of Kemal Dervis, Economy Minister, he naturally got the red carpet treatment and plenty of emollient flattery. The IMF Managing Director Horst Koehler no less said that his board would convene in February to offer support to Turkey. Another default on the scale of Argentina is just unthinkable right now.
The country's economic woes are putting off a lot of foreign investors nonetheless. With the Turkish economy shrinking a whole series of deals concerning natural gas, 93% of which consumed in Turkey is imported, are on hold, including gas supplies from Turkmenistan, Egypt, Azerbaijan and Iran. 
The Turks are in an invidious position in the present world crisis as the only Muslim country in NATO. The government is no friend of terrorists, indeed has been accused of being over-harsh in its methods to combat them when they are Kurds. The capture of the Kurdish leader Ocalan two years ago and his subsequent call from prison to his followers for them to desist from violence has helped to defuse the problem. But militants on the ground might have other ideas in the wake of 11th September.
The anger in the street against the bombing in Afghanistan is real enough; so is the frustration of the Islamicists at the closure of their political party, Virtue, at the hands of the Constitutional Court, the fourth closure of such a party in 32 years. The generals behind it are determined to keep Turkey a secular state, but the prohibition of any religious party is not necessarily the best way to do it.

« Top

BANKING

HSBC announces completion of Demirbank legal merger

The legal merger procedure between the Turkish subsidiary of HSBC and Demirbank has now been finalised. The statement by HSBC Bank A.S. read that the legal title of the new bank is HSBC Bank A.S., with US$250m paid-in capital and US$1.6bn in asset size, IntelliNews New Agency reported.

Diesel trade with northern Iraq to resume

Diesel oil trade from northern Iraq will resume on 7th January, Anatolia News Agency has reported. 
A statement from the Sirnak Governorship said on 2nd January that diesel oil trade from Northern Iraq was suspended on 18th September 2001 due to diesel oil shortage in the region. 
The statement noted that the trade would be resumed on 7th January, adding that the trade would be limited with 100 lorries a day at first stage.

Turkish parliament approves agreement to transport Azeri gas to Turkey

Parliament General Council approved the agreement signed between Turkey and Azerbaijan to transport 6.6bn cu.m. of natural gas from Azerbaijan to Turkey annually, Anatolia News Agency has reported. 
If there is excess natural gas in Turkey after the transfer, Turkey will be able to sell this excess gas to third countries. If any disagreements occur between Turkey and Azerbaijan, they will attempt to use diplomatic channels to resolve the issue. If the disagreement persists, the issue will be taken to special arbitration.

« Top

FINANCIAL NEWS

IMF director meets premier, notes "promising" economic developments

Prime Minister Bulent Ecevit who made an official visit to the United States, met on 15th January with International Monetary Fund (IMF) Managing Director Horst Koehler, Anatolia News Agency has reported. 
State Minister for Economy Kemal Dervis; State Minister Tunca Toskay; Foreign Minister Ismail Cem; Faruk Logoglu, the Turkish Ambassador to the United States; Treasury Undersecretary Faik Oztrak; Central Bank Governor Sureyya Serdengecti; Foreign Trade Undersecretary, Kursat Tuzmen, and some foreign affairs bureaucrats attended the meeting at the Blair House. 
IMF Managing Director Horst Koehler said that the IMF Board would convene at the end of January or in February to support Turkey. 
Responding to questions from journalists following his meeting with Prime Minister Bulent Ecevit, Koehler said that Turkey had recorded important progress in its reform, reconstruction and investment policies. He said that the progress in Turkey would continue to increase. Noting that interest rates had been reducing, inflation had been decreasing and economy had been increasing in Turkey, Koehler said that all those developments were promising. Koehler said that Prime Minister Ecevit and the coalition government had been working in harmony in order to implement correct policies. He said that Prime Minister Ecevit had confirmed that they would continue to implement the reform policy.

« Top

FOREIGN ECONOMIC RELATIONS

Turkey, Tajikistan sign economic protocol, urge to strengthen cooperation

Turkey and Tajikistan signed on 25th December the final protocol at the end of the Joint Economic Commission (JEC) meeting held in Ankara. State Minister Faruk Bal and Tajik Economy and Trade Minister Hakim H. Soliyev, signed the protocol on behalf of the two countries, Anatolia News Agency has reported. 
Speaking at the ceremony, Bal said that they agreed to increase the trade volume between Turkey and Tajikistan to a level which would reflect the real potential of the two countries. Bal expressed pleasure that the JEC meeting was held in a friendly atmosphere and said that they decided to improve the cooperation between public and private sectors of the two countries and organize reciprocal trade promotion campaigns to reach that target. They also agreed to ensure that the Turkish-Tajik Business Council will work efficiently, Bal noted... 
Soliyev said that Turkey and his country could have an efficient cooperation in aluminium and ready-made cloth sectors. Soliyev said that both the public and the private sector in Tajikistan were ready to cooperate with Turkey. 
Contacts between Turkish and Tajik businessmen would gain momentum following their meeting with Turkish businessmen in Istanbul, Soliyev noted. Soliyev stated that the unilateral relationship should be turned into multilateral relationship and that the current conditions in Turkey were appropriate to further improve commercial relations. 
Turkey and Tajikistan had significant potential, Soliyev said. But, he noted, the two countries could not make use so far of their potential efficiently. Soliyev pointed out that the two countries should fulfil their potential efficiently. Bilateral relations were gradually developing, Soliyev said, adding that the visits paid by the presidents of the two countries were important in that respect.

« Top

FOREIGN LOANS

IMF confirm reports on additional loan

International Monetary Fund (IMF) sources in Washington DS confirmed on 27th December the news stories that the IMF management was planning to release an additional loan worth of US$2bn to Turkey. 
IMF sources told Anatolia News Agency correspondent that IMF administration headed by Managing Director, Horst Kohler, was working on providing US$1bn to support Turkey's new stand-by deal each in 2003 and 2004. 
However, the sources said, the support planned to be extended to Turkey in 2003 and 2004 had not been discussed yet by the Executive Board, the decision- making body of IMF. 
International financial circles said that the possibility of the Executive Board approving the additional loans to Turkey in 2003 and 2004 was very high if Kohler made such a proposal to the board. 
Within the framework of the three-year stand-by deal expected to come into force in January 2002, the IMF will provide additional source of US$10bn to Turkey in 2002. More than US$4bn that Turkey will be extended within the terms of this year's arrangements will be added to that US$10bn in 2002. 
If the IMF extends US$2bn to Turkey after 2002, the amount of new stand-by deal with Turkey planned to terminate at the end of 2004 will exceed US$16bn.

« Top

« Top