ECONOMY SETTLES IN ALONG WITH FOREIGN POLICY

 

After a rather prolonged negotiation period with the IMF, the Government has finally made arrangements for a $11.3 billion debt repayment relaxation in the next two years and received a $500 million loan disbursal from the Fund. This arrangement is a great relief for the Treasury about debt servicing in the next few years. As usual, the Disinformation Mechanism presented the IMF facilities as proof of Turkey’s coming round to Washington’s line about sending Turkish soldiers to Iraq, but the reality was somewhat different. When Ankara, bursting with foreign exchange reserves and deposits, threatened the IMF that it would repay its debts to the Fund before they are mature and thus get rid of the standby arrangements immediately, Washington had second thoughts about pressing Turkey too much for the price of these arrangements lest it lost its last leverage on Turkey. As for Turkish troop shipments to Iraq it will hang in the balance as long as Washington refrains from satisfying Ankara in every field especially about massive Turkish economic existence in the Gulf and its political and military assurances. About the reasons for the precariousness of the Turkish troop shipment to Iraq even in that case please see the article below.

 

Thanks to the arrangements made with the IMF on 1 August for a $11.3 billion debt servicing facility to Turkey in 2004 and 2005 ($4,3 billion next year and $6.8 billion in 2005) in addition to the immediate disbursal of nearly $500 million, the Turkish economy was running excellently last week.

The compound interest rates fell by 3-4 points to 42%. It was a major achievement for the AKP rule as they were 72% when the general elections were held on 3 November 2002. The dollar tended to stabilise at TL1.4 million with the Central Bank’s strenuous efforts to prevent the over appreciation of the Turkish currency, though the downtrend is still continuing because of the people’s backing down from the dolarization of the country when Kemal Dervis was in charge of the Treasury before the elections. The inflation rate dropped to 25.6% for wholesale and 27.4% for consumer prices (from 45.9% and 41.3% respectively in July 2002). Exports increased with a record level of 34% on last year, promising to pass $40 billion and foreign trade exceeding the $100 billion limit this year. The Treasury Minister, Ali Babacan, announced that thanks to the arrangements made with the IMF they could further lower the interest repayment rates and it would result in reducing Turkey’s debt repayment ratio (the rate of total debts to the GDP). This rate would drop from 92% at the end of 2001 to 69.6% at the end of this year. They would thus almost live up to the EU’s standards of 60%. He said their calculations did not include the American initiative of according Turkey a $1 billion grant or $8.5 billion loans. They would send a team to Washington on 18 August to discuss this matter with the American Government, but they regarded it as an additional facility if it ever came, he stressed. The debt turnover ratio would fall from 96% now to 77% with these arrangements with the IMF, said Babacan. In other words Turkey now has to borrow TL96 in order to repay TL100 debt. It will be quite a relaxation for the Budget to reduce the turnover ratio to TL77 in the coming months, according to the Treasury Minister’s explanations.

Troop shipment to Iraq is a wish, but should not be taken for granted

The Turkish Government’s exclusion of the American financial facility from its economic calculations is enough to show how precarious it is for Turkey to send big peace keeping forces to Iraq, no matter how much it wishes to normalize ailing relations with the United States.

The key in this regard is unanimity in the State organs – Parliament, Government, Presidency, the Military and off course the feelings of the people. Needless to say the unwise Hill Billy attack in Suleymaniye on Turkish special forces does not help the formation of this unanimity and constitutes an enormous deterrent for the politicians in Parliament, especially  given the fact that there will be nationwide local elections in Turkey in April 2004. If the unanimity of the State organs can be worked out the Government can overcome this difficulty in Parliament and the efforts now are focused on achieving this unity for troop shipments to Iraq. In addition to the Prime Minister’s and the Chief of the TGS’s routine weekly visits to the President, Foreign Minister Abdullah Gul was also in Cankaya last Thursday (7^th) in an attempt to persuade him about the Government’s Iraq and Cyprus policies.

Not only is the Government working hard on paving the way for troop shipments to Iraq, it is also focusing attention on improving the other legs of Turkish diplomacy such as EU accession, strategic relations with Moscow, formation of a kind of a free trade area with neighbouring countries and the Eurasia cooperation around the newly independent Turkic states. Last week Ankara helped considerably for the peaceful transfer of power in Azebaijan from President Haydar Aliyev to his son Ilham Aliyev amidst rumours that the President had died in the military hospital in Ankara where he had been receiving treatment for weeks. He was finally sent to the United States for a heart transplantation and the rumours of his death were rebutted by the Americans as well.      

TAF (Turkish Armed Forces) carry out risk surveys in Iraq

Back to the key issue of Turkish troop shipments to Iraq, in addition to the Government’s efforts to make arrangements with Washington that this should not be a simple peacekeeping force, but a force to restore stability and economic recovery of the entire Iraqi people, TAF carried out risk calculations for the Turkish troops to serve in Iraq.

The first findings of these surveys show that the Barzani and Talabani forces are dead against the presence of Turkish forces in Iraq, but that they can do nothing without the United States. That is why their objections to it, indeed threats of fighting against the Turkish forces in Iraq, are not taken seriously by Ankara. Besides, the weaker Kurdish tribes in the region are in favour of the Turkish military existence in Iraq, as are the other factions such as the Turkomans, Arabs, Assyrians etc in northern Iraq.

“The fanatical Saddamists’ guerrilla tactics may create serious threats to the lives of the Turkish soldiers,” warns military surveys. “Apart from this threat there is no anti-Turkish feelings or tendencies among the Sunni Arabs in Iraq. By rendering social services for the local people, Turkey, contrary to the American occupation forces, may even become popular among all walks of the Iraqi people excluding certain fanatical quarters”, according to initial surveys made by the military.  

Considering that the Turkish forces may be stationed in the “Sunni triangle” which is a nightmare for the American soldiers, Ankara is in close touch with the leading personalities and families, as well as the tribes and religious communities and sects of the Iraqi people about deployment of Turkish soldiers. Preparations are already well underway to send Turkish soldiers to Iraq as soon as the legal formalities are completed with the approval of the Turkish parliament. They will go there with massive portable kitchens to cater for 40-50 thousand people. Fully equipped and adequately staffed big field hospitals, highway and construction machinery such as graders, bulldozers, tractors are also among the facilities the Turkish soldiers will have along with them in Iraq.

The British forces in the south around Basra were in serious trouble last Saturday (9^th) with the local people rebelling against the lack of fuel and power. The big transformers the Brits had taken to the region to ease the power shortage problems were out of work having been overheated under the hellish August sun of this region. The exasperated local people were stoning the British soldiers who were trying not to repeat the American forces’ mistakes in the north such as firing on and killing scores of innocent civilian people.  

Ankara is ensuring London and Washington under these conditions that Turkey can set in motion the electricity and water grids of Baghdad within a month or so and help the normalisation of life in the country. The most important factor for such an achievement is naturally the elimination of the fanatics’ undermining and the cooperation of the civilian people. Steps are being taken to achieve this. Barzani and Talabani are being neutralised and made passive. The PKK will either surrender to Turkey under the recent legislation of a partial amnesty or will be crushed through Turkish-American cooperation. The Turkish forces will be neither under the Polish nor any other command, but will enjoy full autonomy under a Turkish commander within the general economic and political governance of Iraq in which Turkey and the Turkomans will have a say.

When these points come to life as facts it will not be too difficult for the Turkish Government to achieve the unanimity of the State for extracting a legal resolution from parliament about force deployment abroad on the grounds that Turkey’s long- term strategic interests demand such an action rather than saying to Washington at this critical point of its history, “paddle your own canoe.”  uras@ada.net.tr – August 10^th, 2003