8 - 14 March 2001
Issue No.524
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Al-Ahram Weekly On-line 8 - 14 March 2001 Issue No.524 |
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Will newcomer save the day?
In a desperate attempt to stave off economic collapse, Turkey's fragile tripartite coalition government last week handed control of the country's economy to Kemal Dervis, a 52-year-old economist who has worked with the World Bank in Washington for the last 23 years.
Yet Prime Minister Bulent Ecevit has refused to accept responsibility for the economic crisis, which has led to the disintegration of a 14-month-old IMF-backed economic stabilisation programme, a 25-per cent devaluation of the Turkish Lira and the resignations of the three leading economic bureaucrats. "Things will only get worse if I resign," Ecevit said.
The crisis erupted on 19 February when, at a meeting of the National Security Council, President Ahmet Necdet Sezer accused Ecevit's government of blocking corruption investigations. Privately, sources close to Sezer said that his main target was not Ecevit himself but Mesut Yilmaz, leader of the Motherland Party (ANAP), the junior partner in the coalition, and Husamettin Ozkan, the deputy chairman of Ecevit's Democratic Left Party (DSP).
Yilmaz has frequently been accused of blocking probes into the commercial activities of ANAP members, particularly his brother Turgut Yilmaz. Ozkan, whose control of access to the ailing 75-year-old Ecevit has reduced the latter effectively to a shadow prime minister, has been accused of authorising loans from state banks in return for kickbacks and political favours. Not surprisingly, Ozkan reacted angrily to Sezer's accusations, prompting Ecevit to storm out of the meeting and make an immediate announcement on live television that there was a serious crisis in the state.
The inevitable result was the collapse of the last vestiges of foreign and domestic investor confidence. The stock market plummeted and the Central Bank spent more than $5 billion, almost a quarter of its total reserves, in a vain attempt to prop up the Turkish Lira. On 21 February the government threw in the towel, abandoning its 14-month economic programme and allowing the Turkish Lira to float freely. In exasperation, the two leading economic bureaucrats, the highly respected Central Bank Governor Gazi Ercel and Treasury Under-Secretary Selcuk Demiralp resigned.
After his appointment last Friday as economics minister, Dervis was hailed as a potential saviour by the Turkish media. But doubts remain both about his knowledge of the Turkish economy and his ability to tackle endemic corruption. Although he was born in Turkey -- the son of the owner of a pharmaceuticals factory -- Dervis was mainly educated abroad, at the London School of Economics and Princeton. In the 1970s he served briefly as an economics adviser to Ecevit. He worked at the World Bank from 1978, most recently as Vice-President for Poverty Reduction and Economic Management.
Dervis has never made any secret of his admiration for Ecevit; and there is little doubt that this was the main reason that Ozkan invited him back from Washington. No one questions Dervis's personal integrity. But, as an outsider, he has no political base within the bureaucracy and will be heavily dependent on his sponsors, particularly Ozkan and Ecevit.
"No one has any doubt that Ecevit is personally scrupulously honest," said a leading member of the National Action Party (MHP), the second largest coalition partner. "But the same cannot be said of the people around him. It is hard to believe that Ecevit doesn't know what they are up to; and, if he doesn't, then that in itself is damning evidence of how isolated he has become."
The third resignation came on Saturday when Zekeriya Temizel, the chairman of the Banking Regulatory and Supervisory Board (BRSD), the watchdog body that oversees Turkish banks, quit after the BRSD was made accountable to Dervis. Temizel complained that without any autonomy it would be impossible for the BRSD to clean up the banking sector.
There is no doubt, however, that the problem of corruption goes much deeper than the financial sector. A recent survey by the Turkish Economics and Social Studies Foundation (TESEV) found that a quarter of all those stopped by traffic police ended up paying a bribe. In Turkish Customs the problem is even worse.
"We have to bribe the guard at the gate to get our goods into the yard at Customs before we can make shipments," complained one exporter. "There is a typewritten list of how much we have to bribe each official."
Even the ruthlessly honest Interior Minister Sadettin Tantan, who has launched what often looks like a virtual one-man crusade against corruption, admits that the problem is endemic in the Turkish system.
"We have to clean everything from the bureaucracy to parliament," he said last week. "Unless we can cleanse the system of corruption then it is meaningless to talk about economic growth, and the vast majority of our people will remain mired in poverty."
Inevitably, it will again be the long-suffering Turkish public which pays the real price for the crisis triggered by Ecevit's outburst. The economic stabilisation programme had more than halved annual inflation from nearly 70 per cent to just over 30 per cent. But, following devaluation, prices are expected to rise by at least 10 to 15 per cent this month alone, and annual inflation is forecast to exceed 50 per cent by year-end.
Last Thursday, Zekeriya Beyaz, professor of theology at Istanbul's Marmara University, tried to reassure pious Turks worried about the expense of buying a sheep to sacrifice during the Muslim festival of Eid Al-Adha. "The main purpose of the sacrifice is to help the poor," he said. "Sacrificing a chicken will do."
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