Turkey turning its back on IMF, face to World Bank
Posted by meb at October 30th, 2008
Turkey will move closer to the World Bank and distance itself from the International Monetary Fund (IMF) in its program priorities concerning economic growth, employment, education and competition, the Anatolia news agency has reported.
Economy bureaucrats say Turkey will place greater emphasis on fiscal discipline and development projects. In the process, technical and financial cooperation with the World Bank will move to the top of the country’s agenda, Anatolia reported.
Government officials stress that Turkey is already working on the post-program review with the IMF and that it will maintain regular dialogue with the fund as infrastructure for the work concerning a potential precautionary standby arrangement already exists. Talks with top IMF officials will continue during Finance Minister Mehmet Şimşek’s visit to Brazil as well as during the G-20 summit of prime ministers and presidents in Washington, which Prime Minister Recep Tayyip Erdoğan is scheduled to attend.
Financial rule takes place of IMF peg
Instead of the peg set by the IMF, Turkey will implement a financial peg rule according to which it will determine its own fiscal discipline. Turkey does not seek to implement a restrictive economic program with the IMF, arguing that the current conditions do not resemble post-2001 crisis conditions. Turkey will purse its own fiscal discipline program, which it calls the “Financial Rule,” but will not dispense with employment and competition-boosting measures. The IMF, on the other hand, advises that the economy be narrowed down and expenditures restricted while incentives for the private sector are minimized.
The set of rules on fiscal discipline which intend to increase Turkey’s financial credibility in 2009 is expected to be signed into law later under the name “Institutional Financial Responsibility.” Officials note that Turkey’s implementation of fiscal discipline rules will increase its credibility, boosting investor confidence in the country’s economy. They indicate that imposing a rule for balancing expenditures with incomes will provide an institutional guarantee.
WB vice president to arrive in Turkey
World Bank Vice President for Europe and Central Asia Shigeo Katsu will soon visit Turkey and conduct talks as part of the Country Cooperation Strategy. This strategy contains elements which will help Turkey increase its production potential, boost its competitiveness and conduct significant structural transformations in its economy.
Katsu is expected to go to Gaziantep over the weekend, accompanied by Şimşek, to visit the Southeastern Anatolia Project (GAP) and other projects supported by the bank.
The World Bank annually provides the most significant program loan to Turkey. Officials note that the provision of such large sums to Turkey is due to its past performance on projects and programs. Turkey previously obtained a $6.2 billion loan from the World Bank and plans to secure another $2.7 billion for the current year.
source: Today’s Zaman
Related posts:
