Turkey's Economy Feverish. Will Americans Bail It Out?

A painful blow has been dealt on Turkey's economy, which anyhow has been feverish for years.

The Turkish stock market literally crashed after the Turkish parliament on Saturday refused to give a green light to deployment in the country of an American 62,000-strong military grouping, which was to have spearheaded forces in northern Iraq. The economic activity index fell by more than 10 per cent, while the Turkish lira depreciated by 5 per cent.

Properly speaking, it was not the decision of the Turkish parliament, which called in question a US military operation in northern Iraq, that brought about dramatic changes on the stock market in Turkey. Clouds over that country's economy deepened following comments made in the wake of the voting in the Turkish parliament by the White House.

Ari Fleischer, an official spokesman for the American administration, said that "since Turkey is reviewing its position on what it could do, we are also reassessing our capabilities and alternatives." These words were at once perceived in Ankara in one sense only - Turkey should not count on a 30 million dollar package of credits promised it as a compensation for taking part in an anti-Iraqi campaign.

More fuel to the fire was added by Richard Boucher, press-secretary of the State Department, who said that Turkey would lose direct American aid amounting to 6 billion dollars for billeting and maintenance on its territory of American troops which were to have fought against Iraq "from the northern front." For several weeks now the shares of Turkish companies have been bought and sold with an eye to Turkey getting heavy dollar injections from the US. But hopes on which the Turkish business placed its forecasts did not materialise. What has happened to the Turkish market can be compared to the well-known medical "withdrawal syndrome" when a patient's condition deteriorates drastically as soon as he stops taking the prescribed medicine or only learns of the danger of losing this drug.

The Turkish government is moving quickly to cushion the blow to the country's economy. Prime Minister Abdullah Gul has already announced that his cabinet is taking efforts to gain a 16 billion dollar credit long promised by the International Monetary Fund to carry out a government plan of overcoming the economic crisis. Gul spoke in particular about plans for a prompt privatisation of one of the state concerns in order to meet the IMF terms advanced in exchange for the credit.

The IMF has already commented favourably on the Turkish premier's plans. But will Turkey succeed in the final analysis in negotiations with the IMF where first fiddle is played by the US?

Meanwhile, for three weeks now, 40 American transport ships have been waiting off Turkish shores, having on board servicemen of the 4th infantry division of the US army, unable to start landing and preparing for an operation in northern Iraq. It is not clear yet if the government of Turkey will once again submit to parliament the question about deployment of American forces on its territory.

The US, on the other hand, is sure that even without permission to use bases on Turkey's territory, an American military operation against Iraq "will have a militarily successful outcome." According to Ari Fleischer, a decision on the advisability of conducting a military campaign against Iraq will be taken by Bush "regardless of the course chosen by Turkey." Meanwhile, analysts believe that if Turkey gives the go-ahead after all to deployment of American troops on its territory and gets the promised 30 billion dollars, its economy will all the same suffer from a war in Iraq. Would it not be better to take no part in a US-British gamble which is doubtful in all its aspects? Of two evils one chooses the lesser. That was perhaps the guiding principle used by Turkish legislators. And their decision cannot but be applauded by their voters even if they have to tighten their belts.

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Author`s name: Editorial Team