TURKPULSE No:34..........APRIL 19th,  2001    

THE FINANCIAL CRISIS KEEPS ON EVOLVING – from bad to worse?

The financial crisis that erupted last November ballooned into an economic crisis in February mostly because of externally guided intensive efforts. Fortunately, the efforts for the furtherance of the crisis into a political one, which is inevitably bound to turn into a constitutional crisis under the existing composition of Parliament today, have so far remained abortive. It is mostly because these scenarios are déjà vu three times in the near future in Turkey. The whole adventure is far from being settled with the announcement of the new economic program last Saturday. The rulers of Turkey now realise that they will not be able to get away with another mistake.  That is why they are exceedingly careful about taking the necessary measures not only in the economy, but also in all domains.  

The severe crisis that has been going on for the last 5-6 months in Turkey is heading for the final stage with the announcement last week by the Economy Minister, Kemal Dervis, of the new economic program. It will either end up in a success story by overcoming this artificially created crisis that has evolved from bad to worse, or break down with another false step, the inevitable result being a constitutional crisis, that is to say interregnum, ie a military takeover. In Turkish “interregnum” is “ara rejim” (interim government) and the poet Prime Minister of Turkey, Bulent Ecevit, has already rhymed it into “ara rejim, kara rejim” (Interregnum, black-regnum).

A bird’s eye view of the course and stages of this crisis is enough to understand what it is all about, who is behind it (too obvious a question that will not be directly dwelt upon here) and what to expect for the future.

Will the crisis be able to avert worsening into a constitutional crisis?

After a surprisingly successful performance of the IMF’s 3-year disinflation program for Turkey in the first three quarters of last year, it suddenly met with a severe financial crisis on (the first) Black Wednesday last November. The reason was that a medium-size Turkish bank, Demirbank, bought billions of dollars worth of treasury bonds but failed to pay for them when overnight loans were denied. The greedy owners and managers of Demirbank did deserve a lesson for their speculative move, which was far above their financial capacity of $400 million paid-up capital, but this lesson eventually turned out to be a big financial crisis for the whole country.

To cut a long story short, this financial crisis could have been nipped in the bud if the Central Bank had bought back its own bonds at a reasonable price, at the suffering of Demirbank, which lost two billion dollar in two weeks. The IMF, however, did not permit this and the Central Bank Governor, Gazi Ercel, was a perfect tool, thus causing Turkish bonds to plummet in value and their interest rates to rocket sky high in international markets. That is why and how the second stage of the crisis started on the second Black Wednesday, February 21st, 2001, and in the end the Government was forced to let the foreign exchange rates float at the IMF’s insistence. The Government was most reluctant to do so because it meant killing the successfully operating 3-year disinflation program, but had no choice but to give in to the IMF’s demands. “We have suspended the disinflation program because while the surgery was going on another disease was discovered and we had to deal with it first,” said Deputy PM Mesut Yilmaz to voice the Government’s excuse for this development concerning the Turkish banking system.

This step about floating the exchange rates, however, resulted in carrying the financial and economic crisis into the political arena with the tough economic and social measures it involved against working people and industry. As the Disinformation Mechanism was also unleashed against the Ecevit Government it became quite obvious that the external engineers of the crisis were following a covert plan to evolve it from financial into economic, from economic into political and then a constitutional crisis. “Conspiracy theory” or not, that is how most Turks and especially the Government quarters felt. The former American Ambassador to Ankara, Mark Parris, dismissed this feeling of the Turks as a figment of imagination and advised them to stop imagining “fictive enemies”.   

Nevertheless, in the 52 days that passed between the discarding of the 3-year program and the announcement of the new one last Saturday (14th), Turkey passed through very critical days with severe economic uncertainty pushing up the inflation and interest rates, as well as the value of the dollar, while street demonstrations were rocking the stability of the country. The methods the CIA had used against Allande to bring Pinochet to power in Chile 30 years ago, such as women banging pots and pans in the streets and the media augmenting it with deafening loud speakers, were very much at work in Turkey during this period. The cash register that was thrown out on Ecevit’s road by a so-called craftsman was shown on all TV stations hundreds of times at every occasion. PM Ecevit once remarked, “They are still throwing the cash register.”  

These attempts to topple the government and statements about an interregnum in Turkey finally came up with the National Security Council. The top brass joined hands with the civilian government to announce their firm loyalty to parliamentary democracy. Even so, certain side forces of the Disinformation Mechanism such as the Union of Chambers that was instrumental in bringing Tansu Ciller to the top of the DYP and then making her the Prime Minister in 1993 was again at work.  When the Chairman of the Union of Chambers, Fuat Miras, made a desperate last effort on Monday (9th), in order to gain over the military to topple the government with street agitations, he was taught a good lesson.  He had not suggested a direct military intervention, but was mumbling about unseating the Ecevit Government through the “28 February process” with the cooperation of the military and Turkish private enterprise. The top commander, General Kivrikoglu, who was preparing to go to Beijing for more important national questions, only advised him patience in this critical period.

What will be the next stage in the evolving crisis?

By all indications, the danger of a political and consequently constitutional crisis has been categorically averted. Under these conditions, the following developments may be expected in the political scene in Turkey on the following days.

In short, the crisis in Turkey evolving from bad to worse since last November took a sharp turn for the better with the announcement of the economic program last week, though it has other stages to pass in the following days.

Turkey’s half a century experience that went through three military takeovers was instrumental in avoiding the recurrence of the déjà vu scenarios this time. PM Ecevit’s impeccable honesty proved stronger than these media campaigns and it was a good lesson for potential Turkish rulers who will eventually succeed the aging Ecevit. There is reason to believe that the days ahead will bring economic and political stability to Turkey if only the important steps in the offing in international relations do not induce some external powers to resort to more desperate actions against this country. uras@ada.net.tr - April 19th, 2001                

 

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