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Tuesday, 15 May, 2001, 16:55 GMT 17:55 UK
IMF set to approve $10bn for Turkey
Turkish flag and Istanbul skyline
Turkey has promised economic change to the IMF
Turkey hopes to receive about $15.7bn from the International Monetary Fund and World Bank by the end of the year to bolster its economy, said Turkey's central bank chief on Tuesday.

Central bank governor Sureyya Serdengect's statement came ahead of an IMF executive board meeting which is expected to give final approval to a joint IMF-World Bank package of $10bn.

The IMF is thought to have accepted Turkish promises to restructure its economy, including new legislation to privatise Turk Telecom.

Turkey's economy minister, Kemal Dervis, has added substance to his commitments to the IMF by saying he would resign if the government failed to implement his economic policies.

Economy Minister Kemal Dervis
Dervis: "I would resign, I would not stay"
"I would resign, I would not stay," Mr Dervis said in an interview with the Financial Times newspaper on Tuesday.

Turkey needs the international loans to rescue itself from a financial crisis sparked by a political spat in February between the President and the Prime Minister.

As a result, the Turkish Lira has plunged more than 40%, interest rates have soared, some 500,000 people have lost their jobs and there have been fears the country could default on its debts.

Bail-out deal

Turkey will receive $8bn from the IMF plus another $2bn from the World Bank, in addition to about $6bn already promised under a previous bail-out plan.

The loans are conditional on the strict implementation of the economic plan drawn up by Mr Dervis, which was submitted in a "letter of intent" to the IMF.


There is nothing to worry about. These laws will pass and be implemented.

Prime Minister Bulent Ecevit
The Prime Minister Bulent Ecevit has tried to downplay fears that Mr Dervis would resign if the government did not support him.

"There is nothing to worry about," Mr Ecevit said on Turkish television on Tuesday, adding, "These laws will pass and be implemented."

Mr Dervis, a former vice-president of the World Bank, was appointed by the Prime Minister to steer the economy out of the crisis.

Economic policies

Turkey has enacted a series of laws to qualify for the IMF bail-out.

On Saturday, two key pieces of legislation were passed by the parliament to privatise Turk Telekom and restructure the banking sector.

Protestors oppose the economic reforms required by the IMF
Workers oppose the IMF plans after half a million job losses
Many believe the troubled banking sector is the root cause of the crisis. The state has taken over 13 failing private banks since 1999.

If Turkey fails to satisfy the IMF, it may not receive any more loans from the international lender.

Mr Dervis has conceded that the third bail-out in two years for Turkey was reluctantly agreed to by the international community and is unlikely to be repeated.

The IMF-inspired economic programme has been strongly opposed by trade unions and some politicians for its harsh public spending cuts and accelerated privatisation.

See also:

13 May 01 | Europe
27 Apr 01 | Business
27 Apr 01 | Business
02 Mar 01 | Business
28 Feb 01 | Business
22 Feb 01 | Business
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