WEF in Turkey tries to diagnose global crisis
Posted by meb at October 31st, 2008
The World Economic Forum (WEF) opened a regional meeting in Turkey on Thursday, which organizers hope will shape solutions to the global economic crisis.
The three-day meeting, which ends on Saturday, will also focus on business opportunities that might arise from the crisis, energy and resources security, Central Asia’s role in the world and Turkey’s position as a bridge among Europe, Asia and the Middle East.
Speaking on the opening day of the WEF meeting on Europe and Central Asia 2008, Professor Klaus Schwab, the founder and executive chairman of the WEF, articulated that the regional meeting’s main task as to try to comprehend what caused the crisis and then work towards a collective solution. Responding to a question posed by Today’s Zaman about the diverse panels discussing a wide range of topics and concrete solutions that could be drawn from these sessions, Schwab said: “We are still in the area of understanding [what the crisis is and what caused it].
We are living in a very interdependent and complex world where everything is connected. When you split [the connections], you will see many facets of the problem. We have to look into each facet in each session. How can we integrate at the end? I think it will be left to each participant to draw their own conclusion.”
The WEF brings together political and business leaders as well as academics, nongovernmental organizations and media to work towards collective solutions as “all are stakeholders in a global society,” Schwab noted.
Jean Lemierre, senior advisor to the chairman of the BNP Paribas Group, praised regional political and business leaders for their rapid response to the crisis and believed that the WEF would assist them in developing further rapid responses.
One point of consensus amongst participants at the conference seems to be that the post-crisis world will be quite different from what it is now and that there may well be new relationships emerging between government and business in that world. Schwab underlined this fact, stating that there would likely be a need to “redefine the relationship between the real economy and the financial economy,” taking into account the social implications of these relationships.
“We are really looking at options of how to get the global economy’s engine started once the crisis eases,” said Borge Brende, managing director of the WEF and the former Norwegian minister of trade and industry.
Afghan President Hamid Karzai and Pakistani Prime Minister Yousuf Raza Gilani are among leaders expected to attend the İstanbul meeting of the WEF, which is based in Geneva. Turkish Prime Minister Recep Tayyip Erdoğan was scheduled to give a keynote address late on Thursday.
Thomas Mirow, the president of the European Bank for Reconstruction and Development (EBRD), was also at the meeting. He told Associated Press Television News in London earlier this week that the bank could not provide major funding to countries on the same scale as loans from the International Monetary Fund (IMF).
“What we can and will do is sustain our engagement in these countries, meaning supporting banks running into trouble, helping our corporate clients who may be in need of a credit line, for instance for foreign trade,” Mirow said. “So we will stick to our engagement; we will improve our engagement and by this contribute to stabilization.”
The first session of the day, titled “EBRD Investment Priorities in Turkey,” featured both Mirow and Mehmet Şimşek, the Turkish economy minister.
Addressing questions as to whether or not Turkey would be looking at additional IMF stand-by agreements, Minister Şimşek replied, “As the public sector, we are at a point where we don’t need the sources of the IMF, but we have a constructive attitude towards a precautionary stand-by agreement, which will be like a peg.”
“The quality and the scope of the insurance that we will get is very important in terms of turning this constructive attitude into a program. In such an environment, Turkey will of course need some flexibility. If we can overcome the differences, a precautionary stand-by agreement can be on the agenda, but to this end, there are only talks on the technical level. In this context, a constructive dialogue is still going on, but I don’t have so much to state right now,” said Şimşek.
“Apart from it the dialog which existed on the technical level about the stand-by agreement, we cannot talk about an actual declaration right now. But discussions on the technical level will continue in the future as well.”
The EBRD has recently announced that it will provide $600 million in EBRD investments in Turkey, the second largest economy in the EBRD’s area of concern, by 2010. They will focus on five key areas of growth; micro and small medium-sized enterprises, agribusiness, municipal environmental services, energy and energy efficiency, and privatization. The announcement also noted that the bank would be focusing on areas “outside main metropolitan centers, in areas where economic reforms are less advanced.”
Owned by 61 countries and two intergovernmental organizations, the EBRD is presently the single largest lender in the area it serves, and developing the Turkish economy forms part of its mandate to strengthen private sectors in emerging markets. Turkey applied to be a recipient of EBRD funds in April 2008.
Unlike IMF loans, the majority of EBRD funds are much smaller in scale and directed towards the private sector, and loans come with few general country requirements other than those associated with its charter mandate of fostering the “transition towards open market-oriented economies and to promote private and entrepreneurial initiative in the Central and Eastern European countries that are committed to and applying the principles of multiparty democracy, pluralism and market economics.”
source: Today’s Zaman
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