Calamity: Turkey launches urgent appeal for aid

The Turkish authorities have launched an urgent appeal for international support for the country’s collapsing economy. With half a million jobs lost in just 40 days, and the collapse of the Turkish Lira, with a devaluation of 75% in the same period of time, Turkey is near to financial ruin. The reflex consequences of this situation are civil unrest, with massive riots in the streets as the threat of a military putsch arises. Kemal Dervis, the Turkish Finance Minister, appealed to the IMF, the World Bank the USA and even historic arch-enemies of Turkey, Greece, to help, the latter to use its influence within the European Union. Turkey needs 25 billion USD immediately to survive the crisis, but the real needs could be much higher. As an example of the extreme crisis the country is in, the gap to be filled in the state budget – just by the banking sector – is 13 billion USD. The reaction from the IMF is to offer 6.25 billion USD immediately and a further 4.75 bn. USD later. The question is, when, and even then, there will be a gap of 2 bn. USD. After three decades of corruption, the Turkish Banking sector needs urgent revision. Unrealistic interest rates are practised on small traders who try to survive by taking out loans. With inflation soaring, these traders experience increasing difficulty in paying back their loans and have to pass on the cost of financing to the end-user. Basic food costs and a rise in fuel prices of 20% in a few weeks have left the average Turkish family close to bankruptcy. The result, apart from the riots, is a daily increase in criminality, violence and suicide. There are no less than 80 banking institutions in Turkey, many of them with political connections, therefore dubious financial practices go unpunished, while an elite clique grows richer by the minute and the rest of the population slides into increasing poverty. According to Bulent Aliriza, of the Washington-based Centre for Strategic and International Studies, “each political party in the government has a certain state bank in its hands and they manage this bank in such a way as to please their electorate. It is a way to strengthen their political bases. The politicians will resist any attempt to break this power”, he stated. As Turkey embarks on a privatisation programme, enormous unexpected deficits are being discovered in its state-owned companies. An example of this is the 110 million USD gap in the accounts of Turkish Airlines, the state flagship air carrier. A recent attempt to privatise the company was called off by the Minister of Transport and Communications, Enis Oksuz. It seems Turkey has a long way to go before Europe opens its doors. While there is such a high degree of social injustice and corruption, the vicious circle will go on turning. Until there is a real redistribution of wealth in Turkey, the country’s basic problems will perpetuate themselves. Unfortunately, this is a question which does not only affect Turkey.


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