Turkey on Friday, March 2, brought a respected World Bank official and named a new central bank head to pilot the battered economy out of the latest crisis sparked by a forced devaluation of the lira last week.
A political clash last week fuelled a run on the lira, which forced the government to abandon a currency peg and watch the lira plunge around 30 percent against the dollar, wrecking an ambitious anti-inflation drive.
"A decree on the appointment of Kemal Dervis as state minister (in charge of the economy) has been prepared and submitted to cabinet members to be signed," Ecevit told reporters after a six-hour meeting with his coalition partners and senior officials.
"Mr Dervis has rich knowledge and extensive experience on economic issues and international economic relations. I believe he will be successful in his work in Turkey," Ecevit added with Dervis standing by his side.
He said that the approval of Dervis' appointment was also deemed favorable by President Ahmet Necdet Sezer, who has to sign the government decree.
In brief comments to the press, the new economy minister said he was happy to be of use to Turkey "with God's permission". "I hope I will prove beneficial to the country. We have a lot of work to do," said Dervis, the World Bank's vice president for poverty reduction and economic management.
To help Dervis on his mission, Ecevit also announced a new name to head the central bank, Sureyya Serdengecti, who has been working at the bank since 1980 and has been deputy governor since 1998. Serdengecti's appointment follows the resignation of the previous governor, Gazi Ercel, who left after the flotation of the lira.
The appointments were generally well received by the markets, which have only recently stabilized after last week's cash crunch. "The arrival of Dervis brings hope. Turkey needed a trustworthy name after this crisis," Tevfik Eraslan, head of capital markets at Kentbank, told AFP. "He could help Turkey attract credits, but foreign investors will wait a little longer to see the government's new program," he added.
Dervis, 52, replaces Recep Onal as Turkey struggles to put its economy back on track after cutting its currency loose in breach of its three-year economic program backed by a four billion dollar loan from the International Monetary Fund. Onal will remain in the cabinet, but will have different responsibilities, the prime minister said.
No name has yet been determined to take over the treasury, but the deputy undersecretary, Ferhat Emil, will act as a caretaker post-holder as the previous head, Selcuk Demiralp, resigned a few days after Ercel left the central bank, Ecevit said.
The abandonment of Ankara's pegged currency regime has led to the inevitable revision of macro-economic targets and its anti-inflation policy in the IMF program, due to prospective rising prices and additional budget burdens.
In comments to the liberal Milliyet daily, Deputy Prime Minister Mesut Yilmaz said that the government was now set to double its 2001 inflation forecast from 12 percent to 20-25 percent. "It is difficult to talk about inflation when the exchange and interest rates are not clear," Yilmaz told the newspaper. "But taking into account the situation today, we can say inflation could be pinned at around 20-25 percent in the new program," he said.
Ecevit revealed that the government would continue working on the new program along with Dervis and senior officials during the Muslim sacrifice holiday, from Saturday to March 11. "The program is of course ready, but we will work on it anew," he said. — (AFP, Ankara)
by Hande Culpan
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
