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Turkey Defends Economic Reform
ANKARA, April 15 (News Agencies) - Turkey's ambitious reform plan to overhaul its crisis-hit economy received an optimistic welcome on Sunday, but observers questioned whether the government will be determined enough to follow through on the changes.
While Turkey's leading newspapers ran jubilant headlines, columnists applauded the long-awaited economic program for aiming to introduce structural reforms that will significantly change the stagnant and revenue losing public sector.
"The program brings hardship in the short run, but a strong economy in the medium and long run. If it proves successful, it will change the track Turkey is on," editorialist Gungor Mengi wrote in the mass-circulation Sabah daily.
The program, announced by Turkey's Economy Minister Kemal Dervis on Saturday, aims principally to increase revenues by cutting public spending by nine percent, decreasing the state's debt burden, restructuring its weak banking system and accelerating privatization.
But more importantly, the reforms pledge state transparency and accountability, an end to political intervention in the economy, a relentless struggle against corruption and an efficient economic management.
If put into action, the steps would radically change Turkey's economic outlook, putting an end to political meddling in the sector.
But program realization depends largely on the degree of determination the political leadership will show to ensure the reforms break the state's grip.
"The whole task falls on politicians and the parliament. The scenario is very optimistic, but the performance and roles of the stage manager and the actors are also very important," Zafer Caglayan, the head of the Ankara chamber of industrialists, said.
Just minutes after Dervis announced the program, Prime Minister Bulent Ecevit announced the government's full support for the plan and promised to push through a series of essential bills.
"The government is facing a tough test now," Murat Yetkin said in the liberal Radikal newspaper.
"The coalition leaders have promised to carry out reforms that will, in a way, put them in a tight spot at the next elections. It seems very brave, but will they be able to resist pressure from their grassroots and adopt them?" he asked.
Others noted that the three-party coalition does not have much option but to back the program to stay alive.
"The ruling parties have to support the program with all their might because they do not have the right or the strength to bring in a new economy wizard and have another chance to improve the system," Mengi said.
The Ecevit government, itself rocked by corruption allegations, has come under increasing pressure to resign over the financial turmoil as thousands of workers and tradesmen took to the streets to protest the worsening economy in mass demonstrations, some of which turned violent.
Yet, ambitious reforms have been promised before in several much-touted programs introduced by previous governments that were bungled midway, leading to the continuation of corrupt practices and, thus, an increased burden on taxpayers.
But in remarks published in the mass-circulation Hurriyet daily, Ecevit expressed strong intent to radically change the current order.
"We have the necessary determination. We have made a realistic evaluation of how to act to prevent a repeat of the same handicaps, discrepancies," he said.
The new program became necessary after Ankara was forced to abandon a currency peg and float the lira on February 22nd to contain a serious liquidity squeeze, triggered by fears of political instability after a fierce row at the top echelons of the state over ways to fight corruption.
The move, which broke the backbone of an ambitious IMF-backed disinflation program, resulted in the lira falling some 47% against the dollar, price hikes on basic goods and rising inflation.
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